Water Damage to Equipment due to Flood

The following is a case study published in OFS Annual report:

Flood water had entered Mr. Jackson’s clinic and his X-ray machine was allegedly damaged by water. The insurer appointed forensic services to assess the cause and extent of damage, following which an offer was made to repair certain components.

Mr. Jackson rejected the offer on the basis that it was too low and insisted that the insurer replaced the whole X-ray machine. The insurer relied on the forensic experts’ findings and maintained their stand.

Our Findings
Mr. Jackson claimed that the flood waters reached at least 1 meter in height but was unable to provide any evidence of actual flood water level. However, the water mark observed by the independent loss adjuster during their initial site visit was 11 inches from the ground level. The forensic specialist along with the machine vendor’s representative had jointly carried out tests to the X-ray machine and found that
it could be powered up and functioned normally.

Signs of corrosion were observed only to the components at the floor level that could be repaired/replaced. This implied that the water damage did not warrant replacement of the whole machine.

The technical report provided by the machine vendor’s representative was not conclusive while the forensic findings had greater bearing as
expert evidence. Based on the above, the Ombudsman upheld the insurer’s decision and offer.