Instead, you got a letter. Claim denied.

If that is your situation right now, know this: a denial is not the end. It is a starting point. But how you respond in the next few weeks will determine whether you recover what you are owed or walk away with nothing.

Most business owners walk away. Here is why, and here is how you don’t.

Why Most Business Owners Lose After an Insurance Denial

It is not because they are wrong. Most denied claims have legitimate merit. The problem is how business owners fight back.

Some try to handle it themselves. They call the insurer, argue over the phone, send angry emails. The insurance company has a team of professionals trained to handle exactly this reaction. Your frustration changes nothing for them. They count on it wearing you out.

Others hire a lawyer. Smart move, but incomplete. A lawyer can apply legal pressure and threaten litigation, sure. But without someone who can independently quantify the actual dollar value of your loss, the insurer’s lowball number often becomes the baseline of negotiation. You are fighting with legal muscle but no financial ammunition.

Then there are those who hire adjusters alone. A public adjuster will document your loss properly, calculate the real numbers, and negotiate with the insurer’s adjuster. But if the insurance company refuses to budge, your adjuster has no legal leverage. The claim stalls.

See the gap? One side brings the numbers but no teeth. The other brings teeth but no numbers. Insurance companies exploit that gap every single day.

What Actually Wins a Denied Claim

You win when the insurer realizes they cannot outmaneuver you on the numbers and they cannot outlast you legally. That means having adjusters who build an airtight loss assessment and lawyers who can take the fight to court if needed.

When these two disciplines sit under the same roof, something changes:

The adjuster’s documentation feeds directly into the legal strategy.

Also, the lawyer’s understanding of policy language informs how the claim is prepared from day one.

There is no gap for the insurer to exploit, or miscommunication between two separate firms. Also, there are no delays while one team waits on the other.

Insurance companies have both lawyers and adjusters working on their side of every claim. They function as a single unit.

If you are splitting yours across two separate firms, or worse, missing one entirely, you are playing their game with half a team.

Insurance Claim Denied? Why Acting Now Matters

If your insurance claim was denied, time is not your friend. In British Columbia, you generally have two years from the date of loss to take legal action against your insurer.

That window sounds generous until you factor in the months it takes to properly document losses, negotiate, and prepare for potential litigation.

Every week you spend frustrated on the phone with your insurer is a week your case is not being built. Meanwhile, the insurance company’s team is already building theirs.

Don’t Bring Half a Team to a Full Fight

At Pythe Navis MDP, we are the only firm in British Columbia licensed as both a law firm and a public adjusting company. That is not a tagline. It is the reason our clients recover what they are owed when others cannot.

We work exclusively for policyholders. We never represent insurance companies. And we handle your claim from the initial loss assessment all the way through litigation if it comes to that.

If your business insurance claim was denied in BC, do not wait for the insurer to change its mind. They will not.

Book a free consultation and let’s get your claim where it should have been from the start.

The post How to Win a Denied Business Insurance Claim in BC, and Why Most Owners Never Do appeared first on Pythe Navis MDP.

But here’s the hard truth. Not all water damage is created equal in the eyes of your insurer.

In British Columbia, making a water damage insurance claim can get complicated fast. Some floods are covered, some aren’t, and the difference often comes down to details most homeowners never think about until it’s too late, or they never even discover.

Let’s break it down.

What Type of Policy Do You Have? 

Before anything else, you need to know what kind of coverage you’re working with.

Most BC homeowner policies are “all-risk.” That sounds great. Everything is covered unless the policy says otherwise.

Here’s the catch: Water damage is almost always excluded from all-risk policies. Then the policy lists specific water damage situations that are covered.

So even though you have an all-risk policy, your water damage insurance works more like a checklist. If your situation isn’t on the list, you’re out of luck.

Did the Water Come From Inside or Outside? 

This is the question that decides most water damage insurance claims.

The general rule: water from inside your home is more likely to be covered. Think burst pipes, overflowing toilets, leaking appliances, or a failed hot water tank. These are the “sudden and accidental” events insurers expect to pay for.

Water from outside? That’s where things get tricky.

Rainwater entering through a hole in your roof caused by a fallen tree? Probably covered, because the tree damage is the primary event.

A rainstorm that floods your property? Probably not covered. Unless you specifically purchased “overland water” coverage, you’re on your own.

If you’re unsure what your policy includes, call your broker. Explaining insurance coverage is their job.

Was It “Sudden and Accidental”? 

These three words appear in almost every water damage insurance policy. And they matter more than you think.

A pipe bursts in the middle of the night and floods your basement? That’s sudden. That’s accidental. That’s covered.

But what if a pipe has been dripping for months? What if that slow leak seeped into your walls, caused mold, and now you’re looking at $50,000 in damage?

That’s not sudden. That’s gradual. And gradual leaks are almost never covered.

The insurer will argue that your loss was only a matter of time. And they’ll be right.

Was It Just a Matter of Time? 

Insurance protects you from the unexpected. It’s not a substitute for building maintenance.

If your water damage was caused by any of the following, your claim will likely be denied:

1. Wear and tear

1. Rust or corrosion

1. Faulty workmanship

1. Rot or mold from long-term neglect

1. Foundation settling or erosion

These are predictable failures. Insurers don’t pay for predictable.

Were You Home When It Happened? 

Here’s one most people miss.

Many policies limit or void water damage coverage if your property was vacant or unoccupied for more than 30 days. Why? Because a small leak becomes a big disaster when no one is there to catch it.

Your policy might also require you to shut off the water, drain the pipes, or have someone check on the property regularly while you’re away.

Ignore these conditions and your water damage insurance claim could be denied, even if the damage itself would normally be covered.

What Now? 

Water damage claims are some of the most common and most disputed insurance claims in British Columbia. The rules are technical. The stakes are high. And insurers have teams of adjusters working to keep payouts low.

You don’t have to figure this out alone.

At Pythe Navis MDP, we’re the only firm in BC licensed as both a law firm and a public adjusting company. We know exactly how insurers think, and we know how to push back.

Contact us today for a free consultation.

The post Water Damage Insurance Claims: What’s Covered in BC (And What Isn’t) appeared first on Pythe Navis MDP.

In recent years, Canadian homeowners and property owners have faced increasing challenges navigating the insurance claims process without proper guidance, advocacy or representation.

The CPAA exists to change that.

The CPAA is a partnership of experienced firms and licensed Canadian public adjusters from Alberta, British Columbia, Ontario and beyond – united by a shared goal of ensuring Canadians are treated fairly when disaster strikes. Our mission is to:

• Educate policyholders about their rights under their property insurance policies.
• Advocate for fairness and transparency in the claims process.
• Ensure standards and qualifications for public adjusters across Canada.
• Represent the policyholder’s voice in industry and regulatory discussions.

This launch is just the beginning. Stay tuned for upcoming educational resources, policy insights, and advocacy initiatives designed to empower policyholders, support communities and engage constructively with industry regulators. For media inquiries, interviews, or to show your support, please contact us at info@cpaa-adjusters.com.

The post Announcing the Launch of the Canadian Public Adjusters Association (CPAA) appeared first on Pythe Navis MDP.

“Wow! It’s a good thing we have insurance.”

“What do we need to do? We’ve been placed in alternative accommodations.”

“We’ve been given assurances by the adjuster that they will take care of everything.”

“We’ve been advanced some money.”

“It’s a good thing we have insurance.”

Indeed it is a good thing you have insurance. However, there is a strategy being executed by the insurance company and their representative as you contemplate your circumstances and attempt to deal with the emotional impact. The strategy is largely designed to control the insurance company’s financial exposure for the loss and an insured will not be invited to participate in this.

With respect to the building the strategy initially involves having a restoration company produce specifications for repair. However, in severe losses the restoration company will likely complete the selective demolition under the guise of emergency repairs. Selective demolition is very labour intensive and consequently can be very expensive to complete. The restoration contractor may also complete repairs or complete some temporary measures to protect the house from the elements, again under the guise of emergency repairs. The insurance company’s adjuster will then request that the restoration contractor provide a quotation to complete the work outlined in the specifications and the adjuster likely circulate the repair specifications to other restoration contractors and request that they also provide a quotation.

“So far so good; things are underway.”

“Yes but the money the insurance company advanced is running low and we were told that we won’t get another advance until we complete the bulk of our Schedule of Personal Property Loss.”

“I know and we’re being pressured to find less expensive accommodations.”

The tenders should reflect the specifications for repair. If the repair specifications are weak and left open to interpretation, the quotations will probably not be competitive.

The insurance company however will generally take the lowest bid and rely upon it as the fair and reasonable representation of your loss. In severe loss situations though, the cost to repair the house could approach the cost to replace the house new. The insurance policy will define “replacement cost” essentially as the lesser of the cost to repair or the cost to replace.

“I had no idea it would be that expensive to repair our house.”

“I know and I checked the cost to construct new and it’s not significantly more than the cost to repair. We could have afforded to do it.”

“But the restoration contractor has already started the repairs. Is it too late to stop him?”

“I think so, but I’m not sure. But I know this, the cost of the selective demolition was over I0% of the repair cost and we could have used most of that towards constructing new since the cost of a total demolition would have been a fraction of that cost.”

Being emotionally traumatized and then being placed in an environment that an insured has no prior experience with can lead to undesirable results. Construction using the existing foundation only is considered new construction and it may likely be that a homeowner is in a better position of value compared to a repair even after consideration of using some of their own money. However, the further along the loss adjustment path an insured goes before they realize this, the less sense it makes financially to alter the path.

So what is the solution? The solution lies in setting objectives consistent with the extent of the loss and the intent of the insurance policy. The objectives need not be concrete initially; only that they are held open as options which can be narrowed down as information about the loss is accumulated. Further, it is obvious from the above scenario that objectives should be formulated as soon as is possible following the loss. It may be best to seek advice from a knowledgeable public adjuster. Be sure to speak with that person in terms of settlement options and potentials in terms of what you would like to see happen

The post The Importance of Setting Objectives appeared first on Pythe Navis MDP.

In Canada, the case law dealing with the recoverability of these fees is sparse. That said, the cases that have addressed this issue seem to indicate that at least in some circumstances, a portion of a public adjuster’s fees may be recoverable. The purpose of this paper is to discuss those circumstances in two contexts:

• Recoverability of a public adjuster’s fee under the insurance policy; and

• Recoverability of a public adjuster’s fee as damages in litigation.

Coverage under the Policy for Public Adjuster Fees

Insurance policies often specifically provide coverage for “professional fees” but exclude coverage for a public adjuster’s fee. An example of this standard policy wording is:

Professional Fees

We agree to extend the insurance provided to include the reasonable expenses you incur at our request to pay your accountants, auditors, architects, engineers, or other consultants or other professionals to produce and certify particulars or details or other proofs, information or evidence as may be required for the purpose of investigating or verifying the quantum of loss in the event of a claim except any expense associated with the use of lawyers, public adjusters, loss appraisers and/or loss consultants.

In those circumstances, it is clear that a public adjuster’s fees are excluded from coverage under the policy.

The issue is more complex when public adjuster’s fees are not specifically excluded. In 854965 Ontario Ltd. Dominion of Canada General Insurance Co., 2003 CanLII 42670 (ON SC), 64 OR (3d) 234 (“Dominion”), the insured’s property was damaged by fire and the policy provided coverage for payment of:

… reasonable fees payable to the insured’s auditors, accountants, lawyers, architects, engineers or other consultants, excepting the insured’s own employees, for producing and certifying particulars or details of the insured’s loss or losses in order to arrive at the loss payable under this policy in the event of a claim.

The insured filed an Interim Proof of Loss claiming payment of $20,000, which was their limit for professional fees, to be used to pay the cost of retaining a public adjuster. The insurer refused to pay the fee and the insured invoked the statutory appraisal process set out in the Ontario Insurance Act, RSO 1990, c.I.8. As in most provinces, Ontario’s statutory appraisal process can be triggered to resolve any dispute between insured and insurer regarding valuation. Notably, this process is limited to resolving a dispute on valuation and cannot decide matters of law, including whether or not there is coverage for the item in dispute. In this case, the insured sought to invoke the statutory appraisal process to quantify the value of the public adjuster’s fees. The insurer refused on the basis that this would involve a determination of mixed law and fact and was therefore unsuitable to be determined by appraisal. An application was brought and in deciding the issue, the Court held:

The policy provides indemnity coverage for certain expenses incurred by the insured in establishing its loss over and above actual physical fire loss. The enhancer endorsement lists reasonable fees payable to “other consultants” which would include a licensed adjuster…

…

The insured (applicant) entered into an agreement for professional [fees] with the NFA. The NFA has assisted the applicant with its insurance claim. The applicant would not have had to incur the fees but for the fire. The payment of the fees will be a loss to the applicant. The “professional fees” are required to be submitted to the respondent as a “loss” in a proof of loss form.

Based on the above, the court went on to find that the professional fees incurred by the public adjuster were capable of being determined by appraisal.

That decision was appealed and upheld by the Ontario Superior Court who specifically agreed that “other consultants” included a public adjuster. In affirming the decision, the Court also made it clear that even though the matter was capable of being determined by the statutory appraisal process that did not necessarily mean the insurer was ultimately liable to pay the fees:

It is to be noted that the issue at bar does not concern the liability of the insurer for the payment of the adjuster’s fees. Rather the issue concerns solely whether the determination of the value of such reasonable fees is to proceed through the appraisal process as required by s. 128 of the Insurance Act.

…

The appellant urges that the umpire in this circumstance will be required to determine questions of law or mixed questions of fact and law. We disagree. The umpire will only have to determine the reasonableness of the fees and assign a value to them. The action which has been commenced in the court will continue if necessary to determine any questions of law concerning the entitlement to recover these particular fees under the policy.

Although Dominion did not make specifically determine whether the insurer was liable for payment of the public adjuster’s, it certainly seems based on the comments in that case that where the policy provides coverage for “other consultants” under professional fees, there is a strong argument that this includes the reasonable fees of a public adjuster, subject to any other defences the insurer may have.

Recoverability of Public Adjuster Fees in Litigation

A second issue is whether absent the policy wordings, there might be recovery for public adjuster fees arising from the litigation. This issue was discussed in Mostafa v. Prudential of America General Insurance, 1999 CanLII 8721 (ON CA) (“Mostafa”). In that case, the insured’s claimed under their policy after a fire destroyed much of their home and contents. Their insurer denied the claim, alleging the insured’s were guilty of arson and fraud with respect to their claim for contents. At trial, the court found that there was coverage, but for much less than the insured’s had initially claimed. In doing so, the trial judge also found that the insurer had acted in by alleging arson / fraud and ordered the insurer to pay the costs of the action on a solicitor-client basis.

The insurer appealed the ruling on a number of grounds, all of which were dismissed. At the same time, the insured’s cross-appealed with respect to the amount of their claim and:

… to provide specifically for payment to them of the fee charged by their public adjuster.

The Court of Appeal dismissed the first part of the insured’s cross-appeal. In dealing with the public adjusting fees, the court held that [emphasis added]:

For a fee of 7%, Alex N. Sill Insurance Adjustment Company (Canada) Ltd. undertook to assist in the calculation and presentation of the respondents’ claim for building and contents. The respondents submitted that Dyson J. should have ordered the appellant specifically to pay the amount of Sill’s fee which, we were advised, was approximately $79,000 plus interest.

For the appellant’s “bad faith” in dealing with the respondents’ claim, Dyson J. ordered the appellant to pay to the respondents their costs of the action on a solicitor and client basis. The quantification of those costs will entail the assessment of the amount payable for reasonable disbursements for services reasonably necessary to advance the respondents’ position at trial. While that assessment will undoubtedly include some reference to the Sill fee, we consider it preferable to leave to the assessment officer the calculation of the specific amount of that fee that should be assessed in the context of the respondents’ solicitor and client costs.

Based on Mostafa, it appears that where the court orders costs paid on a solicitor-client basis, the insurer will have to pay the reasonable costs of the public adjuster’s fee.

In Plester v. Wawanesa Mutual Insurance Company, 2006 CanLII 17918 (ON CA), the insured’s furniture store was damaged as a result of fire and their insurer denied the claim, also on the basis of alleged arson. The insured’s were successful during a jury trial and awarded damages, including aggravated and punitive damages at trial. Their insurer appealed and the insured’s cross-appealed on the issue of costs, including leave to appeal the refusal of the trial judge to allow the $60,040 fee of their public adjusters as a disbursement. In initially disallowing their fee, the trial judge had commented that the public adjusters were not expert witnesses and therefore were not entitled to expert witness fees, but also stated that their fee should have been included as an item of special damages. The insured’s applied to have the fee added to their special damages but the trial judge denied because that fee was not been considered by the jury and their insurer was challenging the amount being claimed. In considering the cross-appeal, the Court of Appeal stated:

Croth was not qualified as an expert witness at trial. However, the trial judge apparently overlooked the fact that Hanson was qualified at trial as an expert in building contracting and estimating. In my view, the Plesters are entitled to claim an expert witness fee for the services rendered by Hanson.

Unfortunately, the quantum of the fee for Hanson presents a problem. The National Fire Adjustment Company did not produce a detailed invoice breaking down the services rendered. Its bill of $60,040 (which includes the services of both Croth and Hanson) is based on a percentage (six percent) of the Plesters’ total recovery.

…

Hanson testified that, with traveling time, he spent two days at the site of the fire. He then spent another day or day and a half preparing his estimate. In my view, a reasonable fee for these services would be $3,000 a day or $10,500. I would allow an additional $3,000 for preparation of his evidence at trial and his attendance at trial, for a total of $13,500.

In respect of the balance of the fee claimed for the services of National Fire Adjustment, I see no error in the refusal of the trial judge to include the disbursement in the award of costs.

The decision in Plester certainly seems to indicate that where a public adjuster is qualified as an expert, at least a portion of his fee will be recoverable. It also leaves the door open as to whether the entirety of the public adjuster’s fee could have been properly claimed as consequential or special damages. Unfortunately, we do not have the benefit of written reasons from the trial judge but he does appear to have indicating that the public adjuster’s fee should have been presented to the jury as part of the claim for special damages.

Although not addressed directly in Canadian case law, a recent US case (where use of a public adjuster is much more common) may provide some guidance. In Kingshill Hospitality, Inc. v. American Economy Ins. Co., No: 5:18-cv-520, 2018 WL 6427681 (M.D. Fla. Dec. 5, 2018) (“Kinghill”), the insured sued their insurer for breach of contract relating to a fire loss, including a claim for “consequential damages” for having to retain a public adjuster. The insurer brought a motion to have that part of the claim dismissed summarily. The court agreed with the insurer, holding that [emphasis in original]:

Consequential damages… stem from losses incurred by the non-breaching party in its dealings, often with third parties, which were a proximate result of the breach, and which were reasonably foreseeable by the breaching party at the time of contracting…

Kinghill argues it pleaded a basis for consequential damages when it alleged “it had to retain the services of an insurance claims professional (Public Adjuster) to pursue its claim. Assuming that is true, the expenses of obtaining a public adjuster did not flow from American Economy’s alleged breach of contract.

Instead, Kinghill chose to incur those costs just three days after American Economy made a coverage determination. Because those costs were incurred in May – before the alleged breach occurred when American Economy partially denied coverage on June 1 – Kinghill’s public adjuster expenses cannot be categorized as consequential damages.

…

While that conclusion resolves the Motion to Strike, another of American Economy’s arguments merits a brief discussion. American Economy argues that Kinghill’s request to be compensated for the expenses of its public adjuster should be categorized as extracontractual damages that can only be recovered in a bad faith lawsuit. The Court agrees with the major premise, although it is misapplied to the facts of this case.

If an insured believes that its insurer is not attempting to settle a claim in good faith and hires a public adjuster to refute the damage estimate or coverage determination proffered by an insurer, such expenses could be considered extracontractual damages. And, under those facts, the consequential damages would be extracontractual damages that could only be recovered in a bad faith action…

But those are not the facts before the Court, Kingshill does not allege that it retained its public adjuster because American Economy acted in bad faith. Instead, it alleges it retained a public adjuster to assist it in submitting its claim.

It is unclear how Kingshill would be interpreted by a Canadian court. The case places a great deal of emphasis on when the insured hired a public adjuster, which in that case was notably before a dispute with the insurer regarding valuation or coverage arose. As a result, the court found that the public adjuster’s fees did not arise from a breach of contract since the alleged breach had not taken place at the time the public adjuster was hired. The court did state in obiter dictum find that the public adjuster had been hired to refute the damage estimate or a coverage determination; such fees would have been covered as extracontractual damages in a bad faith claim.

The ruling in Kingshill appears to create some logistical issues, such as how an insured, without the initial assistance of a public adjuster, could be expected disagree with the insurer’s assessment of valuation or coverage and then hire a public adjuster. That said, the importance placed on remoteness / proximity in recovering a public adjuster’s fee as discussed in Kinghill does make some logical sense when compared to the Canadian law on consequential pecuniary loss, at least in the context of a bad faith action. As set out in Insurance Bad Faith by Gordon G. Helicker:

In an action against the insurer pursuant to the policy the insured’s remedy is not restricted to the benefits stipulated in the policy, together with any applicable interest and costs. Rather, the insured may be able to recover for certain pecuniary losses which are consequent upon the wrongful delay or denial of the policy proceeds. The limiting factor on the recovery of such losses will be the principle of remoteness…

In these cases, however, one must be careful to differentiate between uninsured pecuniary loss which results from the insurer’s breach of contract and uninsured pecuniary loss which results from the insured event itself. The former loss may be recoverable, but the latter is not, for it would occur regardless of whether the insurer was in breach.

Conclusion

Ultimately, Canadian courts are yet to deal directly with the concept recoverability of a public adjuster’s fee. That said, there are a few principles seem to emerge from the decisions discussed above:

• Where the policy provides coverage for professional fees including “other consultants” and does not specifically exclude public adjuster’s fees, there is a strong argument those fees should be covered.

• Where the insurer is ordered to pay costs on a solicitor-client basis, this likely includes the reasonable fees of a public adjuster.

• Where a public adjuster is properly qualified as an expert witness, at least a portion of their fees can be recoverable as a disbursement.

• Where the need for a public adjuster arises from the insurer’s alleged breach of contract, there is an argument that fee should be recoverable as special damages in a subsequent litigation.

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