Consumption and Real Estate
Who is liable for burned business by another business?
Question : Who is liable for burned business by another business?
I am LLC, My business was burned , but its my neighbours fault, fire started from his warehouse. Another 2 businesses were destroyed also. Contents of my clients were burned and 100% destroyed with my contents also. My insurance doesn’t cover that, Landlords insurance will cover only rebuild building. Any chance that the company which has first fire will cover all victims?
Another thing is: My warehouse was not sprinkled and landlord did not ask any insurance from me. Can I sue him for that or not?
business contents insurance
Best answer:
Answer by Darras
You are company with limited liability that is LLC, not insured. I do not think that company that has first fire will cover all victims even thought the first company has insurance because first company insurance will cover its property. You can consult attorney and lawyers in your state, region and they will surely provide you best law consulting for best solution.
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#2 written by Kor 1 year ago
it should be covered under the public liability insurance of the company which has first fire, if he bought such coverage in the 1st place. else, you will have to sue him or his company, assuming what you said is correct: the fire started from his premise. it does not matter whether it is deliberate or not, he is responsible because he rented/owned that place. however, if he is a private and limited company, then you may not be able to take back all your losses because of his limited liability. it is therefore important to run business with limited liability and also cover yourself with adequate insurance to transfer such business risks. it is common for companies, be it private limited or limited liability or sole proprietorship, to purchase insurance to cover stock in transit and building, regardless whether the landlord buy their own insurance.
maybe in future, you can get second opinion from other insurance agents/companies as in what is adequate for your type of business. as for now, since you had checked with your agent that your insurance does not cover, you will likely have to engage legal services.
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#3 written by Tom Z 1 year ago
Your neighbor’s insurance will pay for damages to your property and your client’s property IF you can prove that the fire was due to your neighbor’s negligence.
It is a big if because the neighbor’s insurer isn’t just going to take your word for it and voluntarily pay for your loss, your client’s loss and the loss of two other businesses. You will have to have significant evidence that establishes clear negligence on the part of your neighbor. In other words you will have to have significant facts that will hold up in court because that is where you will have to present your case.
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#4 written by mbrcatz 1 year ago
When you say it’s your neighbor’s fault, that means he caused his fire, right? He deliberately set fire to his building, right? Because if he did NOT deliberately set the fire, it’s not “his fault”.
NO WAY will his insurance cover your stuff. If it WAS deliberate, there’s an exclusion for that in his liability coverage. If it was NOT deliberate, then he’s not responsible for it.
You need to talk to your agent. Your agent SHOULD have recommended that you buy coverage for your client’s stuff, and all your property. You possibly have an errors and ommissions case against your agent.
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Whether your company is an LLC or the other company is an LLC is totally irrelevent to this situation. A Limited Liability Company (or LLC) only serves to limit the personal liability of the owners of the company to the assets of the company (this is true even though in some very rare circumstances the corporate veil can be pierced depending on extreme negligence by the officers or members of the company)
Even if the company where the fire originated had Commercial General Liability Insurance (also known as Public Liability Insurance) their policy would only pay you for your damages under the following conditions:
1) Their insured (your neighbor) caused the fire due to their negligence — an example of this would be if your neighbor’s business is a restaurant and they failed to clean the hood for over a year resulting in a buildup of grease & the fire originated in the hood — since most restaurants have their hoods steam cleaned on a regular schedule of a maximum of 3 months between cleanings this would be a clear indication of negligence and would therefore result in your neighbor being liable to you and to all parties who suffered damages. However, liability would have to be determined by his insurance company after a thorough investigation including review of the Fire Marshall’s report, documentation from your neighbor, witness statements, etc. or a court of law would have to make the determination if suit is brought against him by any of the involved parties. Conversely if your neighbor’s actions or lack of action did not cause this fire — then he would not be liable to you or anyone else for the resulting damages and his insurance company would not make any payments to you.
2) If your neighbor was found to be liable (unfortunately this would be highly unlikely — again just because a fire originated on your neighbor’s premises it does not mean that they caused the fire), then your neighbor’s policy would have to have sufficient limits of liability to be able to pay you, the landlord and all parties who suffered damages including loss of income, etc. If the limit on the policy is insufficient, then all parties would only receive a percentage of their damages.
In terms of the Additional Details you posted, sprinkler systems are usually required in some jurisdictions for new construction — older buildings are usually grandfathered in meaning that they are usually exempt from the requirement unless there is major reconstruction or remodelling of the premises. Therefore just because there were no sprinklers it would not mean that your landlord is liable. In terms of your landlord not requiring that you purchase and provide proof of coverage for your own business personal property or your clients’ contents — many landlords are beginning to include this requirement in their leases primarily as a risk management tool to protect themselves from losing tenants through exactly this type of problem. However, the fact that your landlord did not require this does not make him or her in any way liable to you.
As a business person it was solely your responsibility to purchase sufficient insurance to protect your interests and by extension the interests of your clients. While this is a very harsh lesson, you need to look at how you arrived at the decision not to adequately protect yourself against loss.
I hope this information helps to clarify the situation and wish you the best of luck.