Why electrical losses are so often disputed
Electrical damage leaves little visible evidence. A motor that stops after a storm might have been struck by a surge, or it might simply have reached the end of its life. Insurers therefore look hard at cause, because many policies cover sudden accidental damage but exclude gradual deterioration, wear and tear, and failures arising from poor maintenance.
Cover can sit in several places: a property policy with an electrical damage extension, a dedicated electronic equipment policy, or an engineering and machinery breakdown policy. Each defines the insured event differently, and some cap electrical losses at a sub-limit, so the first job is to identify which section actually responds.
The specialists involved
Insurers commonly appoint an engineering adjuster or a forensic electrical engineer, sometimes from the same firm that carries out statutory equipment inspections. They examine damaged components, check protective devices and look for signs of overheating, insulation breakdown or arcing.
On the policyholder's side, a public adjuster or loss assessor can coordinate the claim, but technical questions often need an independent chartered or licensed electrical engineer who can review the insurer's findings and, if needed, produce a counter-report.
How the investigation is usually run
After an incident, equipment should be isolated and made safe, but not discarded. Damaged boards, drives and components are the main evidence. The insurer's engineer may ask to remove parts for laboratory examination; agree in writing how they will be stored and returned, and photograph everything before removal.
The engineer then reconstructs the event: weather data, utility outage logs, readings from building management systems and fault logs from the equipment itself. Where many devices failed at the same moment, that pattern supports an external event such as a surge or lightning. A single failure on an older item is more likely to be challenged.
- Isolate equipment but keep every damaged part
- Ask the utility for outage or fault records for the date
- Download controller and UPS logs before they overwrite
- Record the sequence of failures with times
Documents that support the claim
Maintenance records, periodic inspection reports and test certificates for the installation are vital, as they counter the argument that the equipment was neglected. Purchase invoices, asset registers and service contracts establish age and value. Any surge protection or earthing upgrades, with their installation dates, are worth including.
Repairers' reports should describe what failed and why, in plain technical terms. A report that simply states that a board was faulty is of little help; one that identifies surge damage across several circuits, with photographs, is far more persuasive.
Putting a value on electrical damage
Where repair is technically and economically feasible, the claim is usually the repair cost including diagnosis, parts, labour and recommissioning. Where it is not, replacement with equipment of like kind and quality applies under a replacement-cost wording, or a depreciated value under an indemnity wording.
Obsolescence complicates matters. If parts are no longer available, replacement with a newer model may be unavoidable, and insurers may argue that part of the cost is betterment. Data recovery, software reinstallation and temporary hire equipment may also be covered, sometimes under separate sub-limits.
Classic arguments with the insurer
The most frequent argument is that the failure was gradual: ageing insulation, dust ingress or overheating from blocked ventilation. Another is that there was no external event at all, supported by weather data showing no lightning nearby. Policyholders, in turn, may point to utility switching, generator changeovers or internal faults that are covered as sudden and unforeseen.
Quantum disputes focus on whether a whole system needs replacing when only some components failed, the treatment of obsolete parts and depreciation on equipment that was still functioning well before the event.
- Sudden event versus gradual deterioration
- Lightning and surge evidence versus weather data
- Partial repair versus full system replacement
- Obsolescence, betterment and depreciation
- Consequential loss from downtime
When an independent expert pays its way
Low-value claims for a single appliance are rarely worth contesting with outside help. Independent support is worth weighing when production lines, data centres, lifts, refrigeration or building systems are affected, when the insurer relies on a wear-and-tear exclusion, or when downtime is generating a parallel business interruption claim.
Choose someone with genuine electrical engineering competence or the ability to bring it in. In the US, public adjusters must hold a state licence; in the UK and Ireland, ask how the loss assessor is authorised and whether they work with chartered engineers. Clarify at the outset whether the engineer's own fees are included or charged separately.
Reducing the risk of a repeat claim
Insurers frequently recommend surge protection, thermographic surveys and regular testing after a claim. Acting on those recommendations, and keeping the evidence, strengthens the position at renewal and in any future dispute about maintenance.
Organisations offering this service
- Aspray: UK network of loss assessors handling and negotiating insurance claims on behalf of policyholders, notably after fire, flood and escape-of-water damage.
- Financial Ombudsman Service: Official free dispute resolution service in the United Kingdom, handling complaints from policyholders against insurers, including disputed or rejected insurance claims.
- Chartered Institute of Loss Adjusters (CILA): Chartered UK professional body for claims and loss adjusting professionals, responsible for training, qualifications and standards across the claims profession.
- Noble Public Adjusting Group: Public adjusting firm operating nationwide across the United States, advocating for policyholders on residential and commercial property insurance claims.
External links provided for information only; check the terms directly with each organisation.
Frequently asked questions
Is a power surge covered by commercial property insurance?
Often, but not always. Some policies include an electrical damage extension, others require a separate electronic equipment or engineering policy, and many apply sub-limits or exclusions for wear and tear.
Should I throw away the damaged equipment?
No. Keep damaged parts until the insurer confirms they are no longer needed. They are the main evidence of cause.
What if the insurer says there was no lightning?
Lightning is only one possible cause. Utility faults, switching surges or internal accidental faults may still be covered depending on the wording, and an independent engineer can review the evidence.
In electrical claims, the evidence is in the damaged components and the maintenance file, so preserve both. More guides on technical claims are available on expertdassure.com.