Analyzing the Notre Dame Cathedral Disaster From an Insurance Loss Perspective
By: Michael Perlmuter, J.D. (Chief Executive Officer and General Counsel)
Alex N. Sill Company, LLC
North America’s Leading Public Adjuster and Loss Consultant
“Feu dans la charpente de Notre Dame” by LeLaisserPasserA38 is licensed under CC BY-SA 4.0
I watched along with millions of people around the world in disbelief and sadness as flames engulfed Paris’ majestic Notre Dame Cathedral.
I watched along with millions of people around the world in disbelief and sadness as flames engulfed Paris’ majesticNotre Dame Cathedral.The iconic international treasure has served as a place of Catholic worship for more than eight centuries and hosts nearly 13 million visitors of all ethnicities and religions each year.
Notre Dame (“Our Lady”) is more than just a tangible symbol of national pride for the citizens of France and a place to worship. The Gothic structure, its architecture and archives, have been home to historical treasures including documents, art and religious relics.
Thankfully, the devastating fire was ultimately controlled with no reported loss of life. As such, total disaster was averted.
With the flames now extinguished, attention has quickly turned to recovering from the loss which could prospectively be $1 billion or more and restoring this great monument to its former glory.
Why are we weighing in here?
To put a twist on the catchy slogan from Farmers Insurance, we know a thing or two about fires and specifically iconic structures of worship because we’ve seen a thing or two. We know what the stewards of the cathedral face in rebuilding, the concerns they have about how to replace the irreplaceable, what it will likely cost to rebuild and how long it will likely take. Of course, many of these concerns are similar to our clients’ concerns who have suffered similarly devastating, albeit less internationally consequential losses.
So, if you could suspend your disbelief here, I would like to walk you through what the claims process would look like if Notre Dame Cathedral was our client (they’re not; while we work with clients across the United States, we don’t adjust losses in France) and if the building was insured for such a loss (it was not directly insured)**.
The First 48 Hours Are Crucial
Once a fire is brought under control and the last flames are extinguished, we would encourage the stewards of this building (the insured) to take the following actions:
- Review and understand your insurance coverages, extensions, limitations, and exclusions;
- Determine mutually setting the scope of the damage with your insurance company adjuster;
- Document, in detail, the damage to both the structure and any contents, be it furniture, fixtures, equipment, or fine arts; and
- Initiate the negotiation process with the insurer, including, importantly, agreeing on a minimum loss threshold in order to recover a preliminary advance payment to assist in the beginning of the process of re-building, are critical to ensuring a final fair settlement under the terms of the insured’s policy.
Preparation and Presentation of the Claim
Now that we’ve walked you through the initial steps, it is important to point out that all insureds, in this case the Cathedral, must be made aware the burden of proof is on them to prove their damages.
For context on this point, understand the anatomy of an insurance claim: the insurance company will retain (and pay) two separate experts to assess the damage to your building and to your contents and then will furnish those damage estimates to a carrier-employed adjuster to make you an offer of settlement. Clearly, it is not in the financial interest of the insurance company to “overpay” any given claim.
Once that offer is made to an insured, it is incumbent upon an insured to provide countervailing experts’ reports of damages that are larger in scope and in damages in order to rebut the carriers’ reports. Without that countervailing evidence, the Cathedral would be unable to overcome the damage assessment (and burden of proof) set forth by the insurance company and therefore, unable to move the settlement offer higher.
That is precisely where the experience and skill of a reputable public claims adjuster and loss consultant comes into play. In our case, our team of former insurance company adjusters, building appraisers and contents estimators, would prepare and present the Cathedral’s claim to the insurance carrier for negotiation and advocate on their behalf.
Advice for Building Owners
The likelihood of a similar disaster whether caused by fire, wind damage, hurricane, tornado, water damage or other covered natural disaster may seem remote to most property owners (as I’m certain it did for the Catholic Diocese of Paris regarding Notre Dame). However, that should not stop you from putting a plan in place for an unlikely catastrophic occurrence.
Here’s what you can do to prepare.
- Annually review your insurance policy coverages with your agent or broker, ensuring that insured values for your structure reflect the current re-build cost and that your contents coverage (business personal property) has been updated to reflect any new machinery, furniture, fixtures, and equipment (FF &E) you might have acquired since the previous policy was written. In addition, make sure you understand the extensions to coverage that you may have to include business losses or cyber losses incurred, etc., as well as any limitations to coverage, such as co-insurance provisions and deductibles, or exclusions to coverage;
- It is recommended you keep an up to date inventory of machinery, FF & E, and other business personal property with serial numbers and photographs so working together we can more easily re-construct your inventory that has been damaged;
- Be prepared to retain a restoration contractor of your own choice, not your insurance company’s choice to do immediate remediation of the property as it is your obligation as a policyholder to mitigate your damages; and
- Pre-interview a public adjuster, such as the Sill Company which has significant nationwide experience in assisting businesses like yours in adjusting insurance loss claims to their property
And of course, if you find yourself facing a similar loss, the Sill Company is just a phone call away.
** [Author’s note: As you’ve been reading the news stories about the Notre Dame, you may have been surprised to read the Cathedral wasn’t insured as it is owned by the French state, which essentially self-insures the Cathedral and most of its contents (some artifacts were insured by a third party insurance company). However, you also may have learned there were two contracting firms involved in the renovation and restoration of the cathedral and it is quite possible the blaze may have been started/caused by those workmen. As such, the fire is still under what is known as a “cause and origin” (C & O) investigation. It has been further reported that AXA, a very large French-based international insurance company provides liability insurance for both contractors. In the event the C & O investigation concludes that one or both of the contractors did cause the blaze, we can all be on the lookout for what is known as a subrogation claim by France against the causing contractor(s)’ insurance carrier, “subrogation” meaning the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.]
Nevertheless, we are encouraging all of our clients which are incurring economic losses and which also have Business Interruption coverage with no so-called “Virus Exclusion” in their policies to make very general claims based upon the Business Interruption (or 
Today, Ohio and Massachusetts have filed very similar bills with their respective legislation. The Ohio legislation (HB 589) is focused on protecting small businesses located in Ohio, which had business interruption insurance in their current policies. It compels insurance companies to cover claims by small business owners for damages resulting from COVID-19 up to the limits of their policies. 
Finally, my advice to business policyholders who have cancelled planned events to have policies reviewed by experts for first part Event Cancellation coverage. But like all of the claims issues involving coronavirus, coverage analyses are not simple nor will they be easily accepted by the insurers.
