1st Party Insurance Recovery

The client.

A downstream oil and gas company.

The business issue.

This client experienced a nine-digit loss caused by start-up delays and business interruption insurance claims arising from a 2003 fire at one of its largest construction projects in the world – the first fully-integrated oil sands project in 25 years. This cost the company $6 billion, including the ability to produce more than 200,000 barrels of oil per day.

Key policy language issues under dispute included both “valued loss” and “actual loss sustained.” Both of these issues had material implications for valuation of the loss.

The solution.

The Claro Group assisted the client's executives and legal counsel by providing loss quantification, settlement strategy and management counsel. We also prepared an expert report for arbitration with appropriate separation from other project activities to retain privilege and acted as lead negotiator with the client during the parallel mediation process. The parties successfully achieved a settlement in mediation.

The results.

This approach enabled the client to:

• Pursue an integrated business solution for a C-level issue, incorporating financial, legal, technical and risk management expertise to produce the result.
• Achieve the desired financial and business result at a high level of efficiency and with minimal transaction costs relative to recovery.