Many problems have arisen between building owners and their tenants due to their lack of understanding of the relationship between insurance claims and business loss. From the building owners’ standpoint, they purposely do not file a claim when the plumbing pipes burst or when the drainage gets clogged, because if they were to file small claims actions often, their insurance fee would significantly increase compared to the compensation they would be getting. However, to the building tenants, such things become painful.
Let me give you a recent example. A Japanese restaurant on the third floor of a building had water that started overflowing from a sink into a jewelry store on the second floor. Obviously, the jewelry store representative went up and requested the Japanese restaurant to stop using water, but the restaurant told them they could not stop their water usage as there were many dinner customers who already had made reservations. In the end, because of the restaurant’s continual usage of water, by dinner time, much water overflowed into the jewelry store. Dirty water flowed over to the jewelry store’s office and even to the showroom and caused the rooms to be filled with bad odor, damaging the jewelry store’s high reputation.
When the property manager who was dispatched by the building owner turned off the water pipe, it was expected that the problem would be solved once the water overflowing into the jewelry store was shut off. However, dirty water started to overflow into the cell phone store right next door.
Then, when the manager shut off the pipe at the cell phone store, much more water overflowed through the pipe located in the ceiling between the first and second floor, causing a huge problem at a big gift store located on the first floor.
Whose fault was it that the drainage was clogged? It was difficult to determine the cause of the problem in order to file a claim. Determining the cause of the clog would be the starting point in determining whether the building owner or the tenant was responsible.
While they kept passing on the responsibility to each other because of the difficulty in determining whose responsibility it was, the three businessmen were greatly hindered in running their business and the inconvenience kept continuing. A portion of their businesses even had to close for a few days.
Even if the owner of the Japanese restaurant was not able to find the cause because of his lack of knowledge, the building owner could have easily found out the cause through a plumbing endoscope, given that the building owner is obviously the person responsible for maintaining the building.
Because of their concerns about insurance rates increasing, building owners have become increasingly negligent in filing claims for the sake of their business tenants. We have to recognize that this is not something that should be easily dismissed.
This has been a message from Excel Insurance Claim Mediation Company
Jung Park, PA
Excel Public Adjuster