Explosion at polypropylene plant

Incident

The explosion of a pressure vessel and ensuing fire at a polypropylene plant caused extensive damage and a 16-month outage of the entire 400,000 tonne per year facility.

Claim

The insured claimed for property damage and business interruption (BI) under their operation policy programme. Integra was onsite for over six months and project-managed a multi-disciplinary team of experts throughout the claims process. Fast investigation of causation allowed the insurers to confirm policy liability and make a payment of tens of millions of US dollars within two months of the loss. Early agreement of damage scope enabled accurate reserving and expectation management among all stakeholders.

In consultation with forensic accountants and claims preparers, we agreed a model to measure the BI loss (in accordance with the policy terms at the outset of the claim) into which the variable parameters could be input during the indemnity period. We worked with the insured’s repair contractors to mitigate the outage period by optimising schedules and using incentive programmes to expedite replacement equipment and contract works. We also mitigated BI losses by coinciding a planned annual turnaround with the forced outage.

Solution

Integra was instrumental in the amicable settlement of a claim worth hundreds of millions of dollars within 18 months of the incident and just two months after the resumption of operations. Insurers’ rights of subrogation were preserved by our adjusting team and the file was passed to subrogation counsel to advance recoveries.