SMW has become tightly connected to some of the major players in the Boston restaurant scene. Amongst our restauranteur clients, several have owned and operated extremely popular restaurants – not to mention holding prominent positions within the Massachusetts Restaurant Association. So, when one of Boston’s signature restaurants suffered a major property loss a few years ago, SMW had a close-up look at the insurance process – which quickly went awry. Safe to say, the entire restaurant community took notice.
This loss started when a water main broke right by the restaurant’s location in one of Boston’s historic neighborhoods. The broken water main flooded the entire street and surrounding areas, leaving cars underwater and creating a sinkhole in the middle of the road.
At around 9pm, the restaurant owner got a call from a staff member telling him they were taking on water through the front door. This wasn’t immediately alarming, because for years they would see water come in the front door during heavy rainstorms. He said ‘OK, no problem. I’ll get a ShopVac and help clean up.’ But it soon became clear that it wasn’t because of rain – it was from a burst pipe or something similar. They had so much water coming in that they couldn’t get out the front door – water was coming down the ramp so hard they couldn’t open it.
Everybody ended up going out the back door. The water was ankle-high by then, and within 30 minutes the parking lot was full of water. The owner couldn’t even get to the restaurant – it was an island. Cars were submerged, horns were blaring and lights were flashing. By the next morning, the water was gone and mud was everywhere. Right around that time, the owner was asked: ‘Will you get a public adjuster?’
It seemed like a big enough claim to require a PA. The owner knew SMW from a previous property loss. On that claim, SMW came in, managed the claim, and helped get the restaurant back up and running in 8 days. Whenever people would talk about public adjusters, this former client made it a point to always mention SMW and the good work they did for him. He also had a strong connection to SMW family members as restaurant guests – the Swerling family members had always been valued customers.
In the words of the restaurant owner himself: “I always had that connection with the SMW team – they’re among the people who believed in me when I was 25 to 30 years old and starting out in the restaurant industry. Paul Winnick was immediately kind and gracious when I first connected with him, and I remember it was just such an incredible weight lifted to hand off those responsibilities to him.”
Paul Winnick was already a trusted confidante, so he took leadership of coordinating with the various insurance adjusters sent by the restaurant’s insurance carrier. Right away, everything with the restaurant’s carrier went sideways. After the first meeting between the adjuster and SMW, Paul received a call from the carrier stating, “We will be reserving our rights.”
Hearing that from a carrier is a major problem for any insured filing a claim for property damage. According to the insurance company’s view, the flooding in the restaurant resulted from groundwater. SMW considered this opinion to be outrageous. The flooding was from a broken water main – that’s not groundwater. This was just the first red flag SMW would see from the insurance company’s team.
In the meantime, SMW undertook coordination of the cleanup and related logistics of the property claim. Various work crews soon started projects all over the restaurant. Although Paul repeatedly advised the carrier on the necessary steps to take, the carrier remained radio silent. SMW quickly drafted an inventory list of every single damaged item and submitted the Business Interruption and Personal Property portion of the claim to the insurance company.
No response.
Then SMW’s construction experts submitted a detailed list for the Improvements and Betterments portion of the restaurant’s claim. The insurance company finally responded – but only to insist that the carrier owed nothing for any of the Improvements and Betterments portion. In short, everything SMW did was met with resistance from the carrier. Eventually, SMW had to take the last resort step of demanding Reference, a mediation option in your insurance policy that allows both sides (the insured and the insurer) to present their cases to appointed referees so that a value-based dispute can be settled.
In The Owner’s Words: The Details Of The Claims Process Going Awry
“I was horrified by the inventory process. It was incredibly daunting – not just to see everything destroyed, but to have to dig through and count it all. I wasn’t around for the Civil War, but it was like Antietam. I didn’t realize what a daunting task it was until I saw SMW doing it. Dayle Swerling Burke literally counted every single business personal property item in that restaurant. She catalogued beverage coasters and equipment, dishes and glassware – everything except the dirt from that pipe. In one moment, I realized: SMW is saving me this work.
“Early on, SMW reviewed my insurance policy and told me I had good coverage. I had questions about how things got salvaged and what could be salvaged – they did a really good job of controlling expectations. SMW also made sure I didn’t become too devastated. They took me through the initial process in the smoothest possible way. It wasn’t until we got a moving company invoice that the carrier started getting difficult.
“From there, things quickly went sideways with the insurance company. Paul had been communicating with them all along. Then I received a letter from the carrier saying they ‘reserve right of coverage.’ Suddenly I didn’t feel that good. The carrier’s language alluded to this being groundwater, which suggested a problem. It was very unnerving. Paul was all over it from the beginning. He knew it would work out for us in the end. SMW did a very good job of being confident and bringing this to an acceptable conclusion – even when the carrier was being unreasonable. Without their experience and our attorneys’ experience we would have been in big trouble.
“Quite simply, the carrier did not want to cover this loss. That was unsettling, but SMW was so sure that they (the insurer) were wrong. Right from day one, this insurance company gave incorrect advice, and ultimately the claim ended up in Reference. We tried very hard to avoid that, but ultimately this insurer failed to see that the law and policy language were both on our side.
“The insurance company had its own team of consultants, but they did everything from a desk. They tried to question the inventory SMW put together. From our standpoint, it’s important to be present and on site so you can see everything going on. And heaven help any insurance company who questions SMW’s integrity. The carrier decided not to come on site and spot check the work SMW put together. SMW won by out-preparing the claim. And integrity is a big part of it.”
The Restaurant Owner’s Takeaways
“There was just a complete lack of attention from the carrier on this claim. Yes, we were deep in COVID during the process, but so many others gave so much of their time during this claim. Everyone from SMW was there – with masks on and doing things on their own. Of course, COVID was a challenge – and it impacted everybody – that’s the tough part of it. But I think the insurance company lost sight of how to do their job.
“It’s unbelievable how the carrier handled this claim. I can’t understand any of it. My insurance agent concentrates her business in the restaurant/hospitality space. She has since removed her book of business from this insurance company. The experience was embarrassing to her because she was unable to navigate this process to a successful conclusion.
“SMW came through in such a big way. Even in the darkest hours, SMW doesn’t stop fighting. They stay on and get the insured what they deserve. It might be a long process, and it seems unfair to have to go through that sometimes. But they got us what we deserved in the end. I can’t imagine what would have happened if we had gone through this on our own.
“The outcome was better than I could have dreamed. That’s what I got – I got my dreams in the end. There has to be a level of expectation – that the insured has to put in the time to get their money back. You have to work at it. We were incredibly lucky to have SMW – and to have them connect us to attorneys for the Reference piece. The other side had terrible counsel. That easily could have been us. The reason it wasn’t was because Paul recommended a knowledgeable attorney. That was an important part of the end game. If we hadn’t started with SMW, we could not have outfitted our attorneys to win. SMW brings resources I can trust, who I can go to all the time. I just have complete confidence in every recommendation they make to me.”
What now for this restaurant?
“We just opened a new restaurant in Boston. And I have a new venture – it’s an Italian concept that’s upscale. Wherever I go, I make sure the restaurant community – and the broader business community, for that matter – knows that SMW is there for them. So many people told me I should use a public adjuster, which reflects how many businesspeople knew about this service. It also reflects that this is information businesspeople need to know about – and that they should use SMW. It’s scary when something like this happens, and when you need someone in your corner, a good PA makes all the difference.”
Do you need help dealing with a property loss? Call Swerling Milton Winnick Public Insurance Adjusters at (781) 416-1000 today.
