Reference no: EM133331634

Case Study: Hotel Evergreen is located in the outskirts of a small town in BC. It is a 3-story hotel with a restaurant attached to it, also in close proximity, is a propane Refuelling station.
The restaurant was recently damaged by fire, caused from a small explosion of a propane tank at the refuelling station located next to it. The fire department and investigators determined that a leaky propane tank, was carelessly left too close to the hotel's restaurant by an employee of the refuelling station.

No one was injured, since the restaurant owned by the hotel was closed when the explosion and fire happened at 2 am in the morning.

The hotel owners had two Property insurance policies from different insurers, with different amounts of coverage for the hotel and restaurant. The value of the hotel is $2,000,000. Insurance company A covered the building for $1,000,000, and company B for $600,000 both with an 80% coinsurance clause applicable. However, the restaurant was only added during the policy term, and was valued at $200,000, but the limit of insurance on the policy was never increased.

Questions:

a) Describe how does the broker facilitate the claims process, and the part he/she plays in representing the Hotel owner.

b) Explain how would Contribution be applied in settling the claim.

c) Explain how would Coinsurance be applied in settling the claim.

d) Explain how would the insurer handle the claim, since the owner of the hotel had more than one policy covering the same building, (i.e. hotel and restaurant)

e) Explain how would the Refuelling station's insurer be involved in the claim, as a

result of the refuelling station being found liable for the damage to the restaurant.