Dear Members,
We would like to provide you with a further update on the progress following the fire at Churchdown Club.
What have we been doing?
Although it may appear that little has changed, a significant amount of work has been taking place behind the scenes.
Since the incident, the Committee has been working continuously with a range of organisations and professionals, including:
- Gloucestershire Fire and Rescue Service
- The Forensic Fire Investigator
- The Loss Adjuster
- Our Insurance Broker
- Insurance Representatives
- Other specialist advisers involved in the claims process
These meetings and discussions have been essential in progressing both the fire investigation and the insurance claim.
What are the next steps?
Our insurance claim has not yet been formally accepted, as the insurer continues to complete its investigations.
Both the insurer and Gloucestershire Fire and Rescue Service have requested a substantial amount of compliance documentation. We are pleased to report that Churchdown Club has always treated compliance as a non-negotiable responsibility and has been able to provide all requested documentation promptly.
The documents supplied include:
- Fire Risk Assessment
- Churchdown Club Fire Safety Policy
- Churchdown Club Fire Emergency Plan
- Electrical Installation Condition Report (EICR) with no outstanding remedial actions
- Portable Appliance Testing (PAT) records
- Gas Safety Certificate
- Fire Alarm servicing records
- Fire Extinguisher servicing records
- Emergency Lighting servicing records
- Fire Door inspection records
Having provided all of the requested documentation, we see no reason why our claim should not proceed through the normal insurance process.
What is the estimated cost of the claim?
At this stage, the insurer’s initial estimate indicates that the overall claim could exceed £1 million.
This should not be taken as the final settlement value, but rather the insurer’s current working estimate.
Their assessment is based on RICS rebuilding cost guidance, which currently assumes a rebuilding cost of approximately £2,000 per square metre. With Churchdown Club Fire damaged area measuring approximately 450 square metres, this produces an estimated rebuilding cost of around £900,000 before taking into account:
- Site clearance and demolition where required
- Business interruption losses
- Fixtures and fittings
- Other associated claim costs
These figures remain subject to further assessment as the claim progresses.
What is our level of insurance?
Churchdown Club is insured for £1.4 million.
This level of cover was recommended and arranged by our insurance broker based upon the rebuilding valuation of the premises. It is important to note that this figure was not determined by the current Committee, but directly from the broker who measured the Clubs total footprint.
For comparison, until approximately two years ago the building had been insured for around £700,000, before the broker recommended increasing the sum insured to its current level.
The insurer has now indicated that they believe the Club may still be underinsured. Their current view is that the total rebuilding value of the entire premises could exceed the amount insured.
It is important to stress that this does not mean Churchdown Club is uninsured.
Rather, if the insurer concludes that the property was underinsured, they may apply the policy’s average clause. This would reduce any settlement in proportion to the level of underinsurance, before applying the additional 25% policy excess that was introduced following the special underwriting conditions relating to the Spicy Aroma tenancy.
No final decision has been made on this issue, and discussions remain ongoing.
What are we doing about this?
The Committee has formally challenged both of these issues.
Firstly, we have lodged a formal complaint with our insurance broker regarding the adequacy of the rebuilding valuation used when arranging the £1.4 million level of cover.
Secondly, once additional expert evidence has been obtained, we hope to demonstrate that the actual repair and rebuilding costs may be considerably lower than the insurer’s current estimate. If supported by evidence, this would reduce any suggestion that the Club was underinsured.
We have also submitted a formal complaint regarding the application of the additional 25% excess, as we believe there are technical issues surrounding the interpretation of the policy wording which require further review.
Why has the site not yet been cleared?
Many members have understandably asked why work has not yet begun on clearing the site.
The reason is straightforward: our insurers have instructed that no clearance or demolition work is to take place until their investigation has been completed and all structural, forensic and survey reports have been received.
This is standard practice in significant insurance claims and is necessary to preserve evidence while the investigation is ongoing.
Thank you
We appreciate that this has been an extremely difficult period for everyone connected with Churchdown Club. The Committee remains fully committed to protecting the Club’s interests, pursuing the insurance claim robustly and keeping members informed as significant developments occur.
Thank you for your continued patience, support and understanding.