Did You Notice the Notice in Your Pending Fire Claim Notice?

We didn't start the fire
It was always burning since the world's been turning
We didn't start the fire
No, we didn't light it, but we tried to fight it

“We Didn’t Start the Fire”
– Billy Joel

The life of a fire claim begins with the insurer receiving notice.

When it comes to fire losses, notice usually comes from the insured or an attorney for the property insurer. Notice from an attorney is either long and winding or simply a statement of the date and time for an inspection. Regardless, neither tells you anything relevant nor important about the claim.

This is an example of what many notices look like.

Please be advised that insurance carrier ZYX Insurance has retained ABC Law Firm to protect and pursue their rights arising out of the above-captioned matter, which concerns a fire at 123 Smith St. It is our understanding that your company is the manufacturer of the widget.

As a result, please allow this letter to serve as our notice to you of your company’s potential liability for this property damage, should our investigation determine that the resulting property damage was caused by a product from your company.  According, please forward this letter to your risk management department, insurance carrier, and/or insurance agent. We request that all widgets owned by this insured be preserved, and any destruction of any widget will lead to possible spoliation.

Says so much, but tells you so little, right? If you requested counsel to send a similar letter, the language above would sound great, but the real question is, will this letter protect against an adverse spoliation ruling at trial? The answer as always is, maybe.

NFPA 921 is the universal guideline for fire investigations. Recognized at the federal and state levels as the guidelines, noncompliance with its recommendations has resulted in adverse appeals and spoliation rulings. This leads me to Chapter 12 of the 2021 Edition, “Legal Considerations.” Specifically, 12.3.5.4 states claims of spoliation can be minimized when notice is given to all interested parties that an examination is going to occur. Sounds great, but what should that notice include?

12.3.5.4 states any notification should include the following:

  • Date of the incident
  • Nature of the incident
  • Location of the incident
  • Extent of the loss, damage, death, or injury to the extent known
  • The party’s potential connection to the incident
  • Next action date
  • Circumstances affecting the scene
  • Request to reply by a certain date
  • Contact information as to whom to reply
  • Identity of who is controlling the scene
  • Identity of all persons to whom notice is provided

With this new information, let’s look at the notice above again. Where does it fail and where does it succeed?

Does it tell us when the fire occurred? No. Arguably, that information might be contained in the subject line, but it isn’t in the body of the notice. Why it doesn’t is a mystery.

Does it tell us the nature of the incident and its location? Yes. There was a fire, and it happened at 123 Smith St. 

Does it tell us the extent of the loss or damages? No. Is this significant? Yes! If the loss was on the 16th floor of a building that is only accessible via crane, then telling the party being put on notice can mean the difference between a two-day examination and a four-day examination. The difference is between their experts having access to the scene and future allegations of spoliation because their experts were not present when evidence was altered or moved.

Does it tell us the party’s connection to the incident? Maybe. They manufactured a widget, and it may have resulted in property damages. But the reader is forced to make assumptions for no reason – such as whether the widget was in the suspected area of origin, whether there is evidence of the widget being a potential cause, etc. A little more information would go a long way to ensuring that a party put on notice attends the examination, instead of causing needless chaos in litigation with spoliation motions.         

Does it tell us the next date of action, when to reply by, or to whom to reply? No. When is the exam date? Next week? Next month? When do we have to tell you whether someone is attending the exam? Is the author leading the examination or as is very common, is an associate attorney working for the author the point of contact? Simple information that prevents needless communication, expense, and confusion. 

Does it tell us any circumstance affecting the scene? No. Is this a residential house fire, where basic PPE is sufficient? Was the residence the site of a suspected meth lab? A puppy mill? Were there issues with mold, bedbugs or cockroaches before the fire? Is this a commercial building where toxic materials are recycled, and hazmat equipment is mandatory? Has the local building department condemned the building? Again, simple information which prevents needless additional communication, expense and confusion.

Does it tell us who is controlling the scene? No. If the widget is integrated into a different device, who is placing us on notice, then we clearly can’t assume they control the scene. But if we need any information regarding scene conditions, other parties involved, safety considerations, etc., we have no idea whom to contact.

Does it identify all persons placed on notice? No. Wouldn’t it be great if when panel counsel for the widget manufacturer performs its conflicts check before accepting the file it knows all the other possible parties? This information would prevent newly discovered conflicts requiring waivers from clients and their legal teams or reassignment of the matter to a new firm, all of which can take weeks and delay examination and investigations. 

Panel counsel shouldn’t make an adjuster’s job more difficult but easier. The law is a precise endeavor. Therefore, precision is not the exception but the rule. Panel counsel using cookie-cutter notices lacking substantive information are neither precise nor make adjusters’ jobs easier. Take a minute to notice what is in your notice and work smarter, not harder. 

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