An FC&S subscriber recently inquired about how a secret recipe lost in a fire could be reconstructed and if the cost to reconstruct would be covered under a property form. She sent us the following information about the loss:
“We are working a commercial fire loss on a rural supermarket/deli and meat processing business. This market/processor has been in the area for a very long time and is known for its custom-made sausages and such that are closely guarded and handed-down recipes. The recipes were lost in the fire, and the adjuster for the carrier is trying to say that these had no value when they were, in fact, the crux of the repeat business enjoyed by the business prior to the fire.
“There is coverage in the policy for valuable loss of papers. Should this not include the most valuable papers to the future success of the business? Obviously, since the paper copies were lost in the fire, this is more than just a simple reproduction of the document. How can the values be assessed on this type of item? One suggestion was to have the items re-created as best as can be recalled and invite the local regulars to a tasting in order to reassure their business base that every effort to preserve the integrity of the recipes is being taken and protect the [market/processor] from a potentially damaging and devastating loss of business.”
We told the subscriber that the recipes could be considered valuable papers, and the cost to restore the lost information on them would be covered by the valuable papers additional coverage. The recipes are necessary for a large part of the insured's business, so the information contained on the recipes would be valuable.
Exactly how one would go about re-creating a secret recipe is a good question. The taste test might not be the best idea as then customers would know the recipes have been lost (unless this is already common knowledge). But the cost for ingredients and whatever else is deemed necessary for re-creating the recipes should be covered up to the limit for the additional coverage.
We are interested in hearing how other insureds have re-created unique information. Have your insureds gone to extreme or interesting lengths to restore valuable data? If so, tell us about it in the comments section below.
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