The operator of a large mixed-use resort and casino facility was undergoing a major $200 million expansion to its hotel, retail, and entertainment facilities when a catastrophic collapse of its parking garage halted construction.

The Recovery Challenge

Due to the different coverages provided by the builders risk policy and the operations policy, the quantification of financial damages for lost profits and soft costs was complex and the loss allocation was complicated due to coverage disputes between the operator and the insurers. Additionally, the quantification of the rebuild and repair costs was further complicated by the insurer’s claim that some of the rebuild costs were not covered by the policy and that the costs exceeded certain policy sublimits.

The MRC Solution

FACS worked with the client’s senior executives (risk manager, property manager, and construction manager) on the quantification of damages and the presentation to insurers under its builders risk and operations insurance policies.

FACS construction experts were also retained to assist with analyzing and documenting the project’s status at the time of the accident to establish when the project would have been completed just prior to the point of the structure collapse. Documentation included project schedule reviews, past project performance analyses, interviews with project personnel, and discussions of the project development plan prior to the accident.

An insurance dispute ensued for particular buckets of financial damages. Accordingly, FACS was retained as experts on the quantification of damages in the related litigation. The judge in the litigation demanded several mediation hearings while the legal discovery process ensued. FACS provided numerous financial analyses and documentation packages which clearly supported the financial impact associated with the client’s legal position pertaining to the disputed contract language.

The Result

FACS quantified damages and provided numerous analyses clearly supporting the financial impact associated with the client’s legal position pertaining to the disputed contract language. The successful interaction of the FACS team with the client’s legal team allowed the case to be settled to the client’s complete satisfaction without the need for a trial.