Plant under water
When a small river turns into a major insurance claim, fast help is important. That’s why Funk sent an expert team straight away when Hörmann Automotive experienced flood damage.
June 2018 had a rainy start and was less than pleasant for automotive supplier Hörmann Automotive. It seemed to be a normal workday at the plant in Saarbrücken where chassis parts and ceiling systems for buses were manufactured. Workers welded, glued and riveted away. But this Friday in June was no ordinary workday – it was the start of exceptional circumstances.
What was the cause of it? Heavy rain. The constant downpour over the past few days had caused a small river at the edge of the property to grow to monstrous proportions. Neither the riverbanks nor the flood barriers in front of the gates of the buildings were able to hold back the flood. In the end the water was 1.50 metres high in several production and storage halls as well as in the building containing the offices and employee rooms. When the water receded, buildings, machinery, equipment and stock were damaged or contaminated. Operations at the entire production site had to be shut down for a long period of time. It was impossible to work normally there even weeks after the flood.
The water came and went, but the chaos stayed: the river that had burst its banks had damaged buildings, equipment, machinery and stock.
Container village with cleaning baths
‘It was important first to mobilise all available resources so that the business could get up and running again quickly.’
But there was a ray of hope: after just one phone call, help was immediately on the way. Lars Imbeck, the major claims coordinator at Funk, quickly put together a team of experts. By as early as the next day – a Saturday – Funk showed up on site with representatives from three expert offices: a clean-up company, an insurer and a chemist. The initial clean-up started on Sunday based on the chemist’s instructions. Major claims coordinator Lars Imbeck and the responsible customer advisor pulled out all the stops to keep the interruption period as short as possible. As Imbeck says, ‘It was important first to mobilise all available resources so that the business could get up and running again quickly.’ Two clean-up companies actually worked together on the job. The site soon housed a container village with cleaning baths and materials. More than 100 employees took care of clearing up the space and cleaning buildings and machinery.
Thanks to comprehensive consultancy from Funk, Hörmann Automotive had sufficient protection against flooding. The existing insurance policies covered the damage in full, which amounted to around 6.5 million euros. The expected losses due to business interruptions were feared to be much higher at first, but thanks to the quick response and immediate measures, it was possible to limit the financial losses, including for temporary measures, to 1.5 million euros. The remaining 5 million euros of the claim went towards property damage. ‘It was only thanks to the immediate and professional support and coordination from the Funk Group that we were able to avoid downtime for our customers. Otherwise they would have been forced to find other suppliers, which would have been an existential threat to our company and its approximately 150 employees,’ asserts Uwe Jung, Managing Director of Hörmann Automotive in Saarbrücken.
What this claim demonstrates
- Flooding can occur anywhere and at any time of the year.
- Not just water but also the mud and sludge left behind are a detriment to a company’s resources and capacities and lead to interruptions in production. In addition to loss of earnings, there are costs for temporary measures, such as outsourcing work in the short term.
- Insurers cap the insurance cover for damage arising from natural risks with annual limits of indemnity. This means that the agreed sum is available for all claims at all insured sites for the entire insurance year.
- Companies are therefore advised to get as high an annual limit of indemnity as possible for the cover of natural risks. This is especially true for companies with particularly high risk due to exposed locations or operating multiple sites exposed to risk. Obtaining insurance cover after a claim is often difficult.