Case Background

A foreign pump station project was insured against erection all risks insurance and against loss of construction machinery and tools. On some day in October 2021, the temporary cofferdam of the project was destroyed by flood caused by typhoon and rainfall, and part of butterfly valves, motors, pumps and other equipment or construction machinery and tools in the pump station were washed away or damaged.
The project manager said that the cofferdam was nearly 35% damaged, which means that nearly USD 144,000.80 lost according to 35% of the cost of the cofferdam. In addition, this accident caused the failure of 6 butterfly valves that had been installed due to flooding, and the project calculated that the total loss was USD 71,218.15. In addition to other scattered electrical machines, water pumps and other equipment or construction tools, the project manager filed a loss claim of USD 233,639.40 against his insurer.

Inspection Situation

Combined with our company's site survey and analysis of its design data, wo found that the design length of the cofferdam was 100 meters, its section was a trapezoid 5 meters wide at the upper base, 33 meters wide at the bottom, and 8 meters high. Our investigation found that in this accident, the upstream part of the cofferdam was destroyed by the flood about 35 meters long, but only the about 2 meters high earth at the top was washed away.
That is to say, the damage of the cofferdam did not reach 35%, but only accounted for about 4% according to the volume of the earthwork washed away, and the corresponding cost was only USD 8,918.05. The calculation process is as follows:
Total earthwork volume of cofferdam: 100×（5+33）×8/2 = 15200 m 3
The volume of washed earth: 35×（5+12）×2/2 = 595 m3
The damage degree of cofferdam: 595 / 15200 ×100% ≈ 4%
At the same time, our company found that among the above equipment damaged or washed away, some of which were butterfly valves that had been installed according to the drawings, and their electric actuators were damaged due to flooding. Among the claims filed by the Engineer, USD 71,218.15 was mentioned for the damage to the butterfly valve. After checking the design paper, we found that the butterfly valve was about 53.6m high, which was clearly lower than the ordinary water level (that is 56.42m). If the pump station was properly put into use, the above butterfly valves would be immersed in water for at least more than half of the year, so the water damage of their electric agents would happen without the waterproof type of the electric butterfly valves.
Combined with the site survey, the damaged butterfly valve was not waterproof type, and there was no use of the waterproof butterfly valve in design drawings. Our company believed that the reason for the above butterfly valve water damage was the improper design, so the loss should not be considered.
As for the total loss of USD 23,906.33 for other water pumps and other equipment, we believed that we could accept the loss after collecting and checking the value materials.

Solution

Finally, the total amount of loss approved by our company for this case was USD 32,824.38 (USD 8,918.05 + USD 23,906.33), which was lower than the deductible of this policy of USD 50,000.00, and the insurance company did not need to pay compensation.

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