Our client’s furniture showroom was located in an area hit by a mini tornado. The volume of rain overran the local drains and water entered their premises from doors at the front and rear of the building flooding about 5000 sq ft of showroom. The staff did their best to clear out excess water that evening and we attended the next morning to inspect the damage. We reported the incident to insurers and arranged loss adjusters to attend. As many premises in the locality had also been flooded, we loaned the client water removal equipment to continue the clear up. We agreed with the loss adjuster that the water damaged goods would be sold at a discounted price by the client and that the difference between the retail price and the discounted price would be made up under the business interruption claim. We progress chased the claim through clear up and settlement of all aspects of the material damage claim other than the replacement carpet which by now was starting to smell. To minimise disruption to the business, it was agreed to schedule the carpet replacement to the quietest trading period of the year, goods were held back at the client’s distribution base and the carpet replacement was undertaken in 4 sections, in each case allowing for testing of the floor slab to ensure it was dry. The showroom continued to trade over the entire period of the carpet replacement, though with a reduced amount of stock on the premises. At the end of the carpet replacement, we spent several hours discussing the business interruption loss. Trading during the period of the initial flood and the 2 month period of the carpet replacement had been impaired, how much of this was due to generally impaired trading conditions in UK retail at the time was unclear. We assisted the insured in presenting the loss of gross profit claim strictly in line with the policy terms and definitions. The strict application of policy defined rate of gross profit to the reduction in turnover over the same period in the previous trading year produced a figure just short of £60,000. Our client was amazed that such a high figure was produced. We submitted our calculations to the loss adjuster with the expectation that this would be the first step in a negotiating progress which would involve the trending provisions within the policy. To the amazement of our client, the loss adjuster asked for a minor adjustment to relate the reduction in turnover to the average of the 2 previous trading years, thereby reducing the amount claimed by about £1,500. Despite our suggestion to dispute this reduction based on the policy wording, our client couldn’t agree the offer quickly enough.