Adjusters at Ground Zero

Despite impressive track records — including work on claims from many of the infamous hurricanes over the years, as well as the invasion in Kuwait and bombings in Northern Ireland — the terrorist attacks in New York impacted three Cunningham Lindsey adjusters in ways they did not expect.

The three adjusters were Richard Smith and Bob Prefontaine who are both vice presidents at Cunningham Lindsey Canada, and David Pigot, executive director of Cunningham Lindsey International. On the outside, they carry the typical bravado and confidence you might expect from such people, yet projecting a sensitivity inherent with the nature of their profession — disaster handling. Turning the topic to the events of the September 11 terrorist attacks, the tone of their voice softens, they become thoughtful in response. It is clear that this disaster has changed them.

Smith and Prefontaine have numerous clients with claims in New York. Three filed large claims as a direct result of the carnage in New York City. For the purpose of this article, Cunningham Lindsey preferred to keep the policyholders anonymous. As such, they can be described as two Canadian financial institutions and a large Canadian property manager. All of the companies in question had interests at the disaster site, such as buildings close to the World Trade Center (WTC) as well as an underground vault.

Pigot is adjusting claims relating to the New York subway and several brokers in the financial industry who operated out of floors in Buildings-One, Two and Seven of the WTC complex — all were destroyed. If you have been around the property and casualty insurance industry for a while, you may have a sense of who the claimants are. This account, however, is not about them. It’s about being an insurance adjuster at “ground zero”, and what happened the day the world changed. As with most world changing events, everyone remembers where they where when the devastating news arrived. Prefontaine, Smith and Pigot did not know what role they were about to play as the disaster unfolded.

Immediate response

The ensuing days after the WTC attacks were hectic, with priorities given to contacting policyholders and making preparations to deploy a team to the disaster site. “It was two days of frantic phone calls back and forth to secure a forensic accountant, structural engineer and other team members and then getting Tyvex suits and breathing apparatus delivered,” says Smith.

The second task was a more logistical problem — how to get to New York. There were no flights and the borders were closed, Smith explains. The claims handled by Smith and Prefontaine were partial losses. However, the commercial claims falling under Pigot were regarded as absolute losses — there was little to inspect as premises had been entirely destroyed during the collapse of the WTC. This destruction lead to some interesting challenges in the claims adjustment process.

When the twin towers collapsed, every single office was completely destroy with all the contents. “Those contents could be very valuable because they had a lot of smart floors and very extensive and expensive fit-out, as well as sophisticated technology,” Pigot says. While some policyholders kept detailed property inventories off site, others lost their documentation in the disaster.

Then there are issues with regard to leases. For example, some leases hold the provision that, “if a landlord rebuilds within three years, that they have to take back the property,” Pigot observes. “They can’t just walk away from it, having said that it doesn’t look likely that the WTC will be rebuilt in three years.”

As such, claims are also likely to be high in value, says Pigot. A floor of offices could have a value of US$25-$30 million.

According to Prefontaine, all told, it could be a long time before reliable claims numbers are available. It is likely going to be around the middle of this year before credible loss figure are tallied. Pigot and a colleague, Stuart Devine, gained access to the disaster zone with some ex-police officers on September 12. “We witnessed the carnage at first hand,” he wrote in an e-mail to colleagues. “Words cannot describe the devastation and I will not try to do so. Suffice to say that, whilst Stuart and I have both seen the aftermath of several hurricanes, earthquakes and other violence around the world, nothing could have prepared us for this disaster.”

At the frontline

While Pigot worked from his office in mid-town New York, Smith and Prefontaine were building their team in Toronto. On Sunday, both left for New York City. On arrival, they went to work, which included getting credentials at the mayor’s “Office of Emergency Management” for access to the 16-acre disaster site. The next day they suited up with helmets and full face breathing apparatus and headed to ground zero.

The disaster area had been cordoned off and it was swarming with emergency services crews and the Federal Bureau of Investigation (FBI), which checked identification of incoming workers. The first thing that struck Smith at the site was the smell. “That’s a lasting memory, the whole place had an acrid, horrible smell.” The secondary sensory observation was the physical devastation and the people. “In the debris I saw bits of (aircraft) engine and pieces of fuselage…it was very numbing.”

Prefontaine adds, “you see physical destruction, we are accustomed to that. We’ve seen broken buildings, concrete and steel. But the magnitude of this disaster was incredible.” At ground zero, the human impact of the terrorist attacks was evident on the rescue workers’ faces. They were solemn, notes Smith, yet determined to do their jobs. “I never saw a smiling face,” he recalled.

The exhaustion of the rescue workers also impacted Prefontaine. “What impressed me most was my first walk into the area of destruction. I walked among the rescue workers and was astonished to see the emotional exhaustion and physical fatigue.” New York churches had set up praying stations behind the World Financial Center, not far from a temporary morgue. There were also rest areas equipped with cots and feeding stations for the crews who were working around the clock. In some cases, notes Smith, people just lay down and slept on the ground. “There was no humor or jokes. Just a sense that there was a job that needed to be done, so let’s keep working.”

There was also optimism among the rescue workers. “There was hope that someone would be found alive, and every now and then there would be rumors,” recalls Smith. Claims on-site included damage to buildings which were on the east and west side of the WTC. “Essentially they were across the street,” comments Prefontaine, “there was a lot of debris, almost missiles launched from the towers when they collapsed. Concrete and steel were catapulted into surrounding buildings. There was also a monumental volume of dirt and dust. The force of the collapse carried it for blocks and blocks.” This resulted in dust permeating sensitive computer systems and the buildings’ duct work, and even furniture. “You couldn’t open desk draws with a substantial amount of finding dust in them,” he adds. The flying debris also smashed 900 windows in one building and 400 in another. Those windows are valued at US$1,000 a piece.

Brave face

Much of the recovery work involves repairing the facade of the buildings, including the difficult task of matching stonework. The disaster impacted eight million square feet of rental space in the buildings. Eighty tenants were affected. Claims involve both loss of rent and physical damage to the premises.

“I focused on the business at hand. But because we were so close — knowing people in the World Trade Center buildings — it was difficult,” admits Prefontaine. At the end of long days, the adjusters could but not help replaying the awful images in their minds: The aircraft debris, the dusty, acrid conditions, the shattered buildings and broken hearts of the ever determined rescue workers.

Smith recalls that there was a little girl, of perhaps eight or nine years of age, not far from the a rea cordoned off by the police. “She stood there with a leaflet in her hand that showed a picture of a missing man that said, “have you seen my Dad?” It was gut wrenching,” he adds. At the end of those first days, the adjusters went back to their hotel to face their own emotions in the privacy of their rooms. “When I went back I had time to think about, it was an extremely emotional event,” notes Prefontaine.

Yet, there were moments of hope. Scenes that played out that were not common to a city that has a reputation for a “tough-as-nails” attitude. At Grand Central Station, Smith and Prefontaine were both witness to an old man being knocked down by a younger man in his hurry to get somewhere. They helped him up and picked up his hat. They turned around to see the younger man being roughly held against the wall by 20 witnesses, who then called for the National Guard to deal with him. “The spirit of New Yorkers, and indeed of people from around the country, has not been bowed or broken,” wrote Pigot in one of his follow-up e-mails to colleagues. In a later missive, he noted that the beleaguered city was showing signs of recovery. “New Yorkers are resuming their everyday routines and are once again shopping and dining out (and being their normal brusque selves, i.e., no longer opening doors for each other!).”