Delivered an Extra $1,000,000 of Coverage and Removed Limitations Two Weeks Before a Boarding School Fire

Fire destroyed a key facility at a boarding school and KMRD Partners made a significant difference in the outcome. Two weeks before the fire, we helped the school secure a 24% decrease in costs, removal of multiple limitations, and an extra $1,000,000 of coverage.

Better plan coverage

We were able to eliminate the 72 hour waiting period and the monthly extra expense limitations and the school was able to remain operational.

More for less

We reduced the deductible from $50,000 to $10,000 and increased the extra expense limit from $500,000 to $2,000,000, at no additional cost.

24% in real savings

Our dedicated team, unique coverage negotiation process, and key coverage enhancements all worked to reduce cost 24% from the previous year.

The Issue

KMRD’s receptionist shouted around the corner with a question, “Didn’t you guys recently obtain ABC School as a new customer? They are on CNN right now. It looks like the entire campus is on fire!” Not only was the fire the most severe they ever experienced but the building that was being engulfed in flames provided heat to all of the buildings on campus including the dormitories. It was mid-November in Pennsylvania.

Apparently, the news media could not resist the potential controversy that may come from a major fire at a school. There were several helicopters on the scene quickly and news vans were dispatched to the location immediately.

Two weeks earlier, KMRD presented a detailed side-by-side analysis of the insurance program we negotiated for the school versus that which the school was currently being provided by another carrier/insurance broker. At that time, many of the coverage enhancements may have seemed trivial because the school had not experienced a loss in recent memory and certainly not one of this size.

Our Response

KMRD executed on its emergency claim procedures by alerting the entire service team, sending two representatives to the scene immediately with cameras, and sending one representative to KMRD’s offices to assist in the coordination (command center) of the effort and prepare for the next day’s meeting with school decision makers.

The school’s disaster recovery plan worked effectively. The students were evacuated immediately to the gymnasium. A team made arrangements for temporary lodging in the gymnasium and sourced items such as cots which were donated by a local municipality.
Temporary boilers were ordered to deliver heat to the dormitories so that they could return the students to their quarters as soon as the fire was extinguished. And the school appointed one voice as a point of contact for the media (at KMRD’s direction).

KMRD met with the leaders of the school the next day to discuss the following:

An outline of the key partners expected to be (the carrier and other related parties) involved in the claim.
The importance of establishing the cause and origin of the fire in the recovery of the loss. Prior to that meeting the school was already engaging a demo company to arrive that same day. They would have lost a component of coverage had they done so.
Public relations matters.
Pertinent insurance coverages applicable to this claim.
Sample policy forms obtained during the negotiation process with the carrier. This claim occurred 2 weeks after the effective date of the policy so the actual policy was not issued yet. KMRD accelerated the process by providing the carriers claims representative a copy of the sample forms as well!

KMRD was effective in reducing the anxiety level of the school leaders because they now felt comfortable they were adequately covered and they had an expert advising them on a situation. This was something they never had experienced before. There were no surprises.

The Results

After the loss, the importance of KMRD’s unique coverage negotiation process was clear. Following are some key coverage enhancements that made a significant difference.

The elimination of a 72 hour waiting period for extra expense. This played a large role because the school needed to get temporary boilers on campus to heat the dorms and other facilities.
An increase in the Extra Expense Limit from $500,000 to $2,000,000. This limit was obtained at no additional cost and was identified by KMRD as one of the most important coverages to a boarding school like this.
The elimination of a monthly extra expense limitation that would have limited the school’s coverage to $200,000 in the first month. This limit would not have been adequate to provide the funds needed to keep the school operational during the first 30 days subsequent to the fire.
Building Ordinance Coverage. The school’s facilities are historical in nature. New building ordinances contributed to increased expenses to replace the building. Prior to KMRD’s involvement, the school did not have this coverage.
Increased Debris Removal Coverage. Previously the limit was $250,000. KMRD’s program included a $5,000,000 limit.
A reduction in the deductible from $50,000 to $10,000.

Special Note: These enhancements, among others, were all included in a policy that cost 24% less than the previous year. This case history reinforces our philosophy of taking a disciplined approach to implementing the simple fundamentals of coverage. It’s an important component of our process for our clients. Insurance is often looked upon as a necessary evil and in many cases post- loss stories like this are not ones emphasizing the positives. This case history demonstrates the critical importance of the insurance industry to the protection and replacement of client assets.

As seen in this scenario, our team was able to dramatically reduce the cost of risk for this boarding school. That’s the KMRD difference.

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