Restaurant Water Loss: Examination Under Oath, Sworn Proof of Loss, and a Lien-Threatening Mitigation Vendor

The EUO is the insured's sworn testimony, not yours. You may explain the process, build a chronology and document index, organize the financial records the carrier asked for, and be present as the insured's representative. You may not answer for him, script or rehearse answers, sit beside him prompting responses, or advise withholding documents. Because his English is limited, request a qualified, neutral interpreter in writing and confirm who provides and pays for one; a family friend who summarizes or edits answers creates a record the carrier can attack. Prepare him on substance, not on words: tell the truth, say 'I do not know' when that is true, ask for a question to be repeated, and decline to guess. Object on the record to questions that seek legal conclusions or coverage opinions and reserve all rights. Track dates of every demand and response, because the carrier's own claim-handling obligations require prompt investigation and reply to communications, and a documented pattern of delay supports a later bad-faith position.

Calendar the 60-day deadline and file early, signed by the owner, so the carrier cannot argue late notice. The proof should break the loss into building, contents, mitigation, and business income, and should not concede causation. On the $10,000 seepage sublimit: it applies to constant or repeated leakage over 14 days or more. A single pipe failure that ran nine hours is a sudden discharge, not seepage, so argue the sublimit does not apply and support that with the plumber's report, the tenant's statement, the water bill, and thermostat or heating records that answer the freezing and vacancy defenses. On business income, the 72-hour waiting period means the first three days of lost earnings are not payable; model the loss from day four through the period of restoration. Document lost reservations, cancelled private events, covers, payroll, and vendor credits, and support the projection with prior-year same-month P&L, tax returns, and POS reports rather than a bare forecast. Serve the carrier a written demand for its coverage position so the reservation of rights does not drift.

Separate the vendor problem from the coverage fight. The insured hired the mitigator and owes the bill regardless of what the carrier ultimately pays, so an unpaid vendor can lien or sue the insured and, worse, may withhold the drying records and moisture readings you need to prove the loss was mitigated properly. Obtain the invoice, daily logs, equipment records, and photographs first, and request a signed lien waiver in exchange for payment. Ask the carrier in writing to release additional mitigation funds from the undisputed portion of the claim, since it has already accepted $40,000 of the same expense, and argue that reasonable emergency measures to protect the property from further damage are a duty under the policy and are not the seepage damage itself. Recommend the insured pay any genuine balance from operating funds and claim it as a covered expense, rather than letting a lien cloud the building. Do not advance or lend the insured your own money; that creates a financial interest in the claim and a conflict you cannot document away.