Claims Canada April/May 2014

www.claimscanada.ca

April/May 2014

TECH TALK

Official Journal of the Canadian Indeépendent Adjusters’ Association

Adjusters and claims managers get a crash course in the changing digital environment

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Contents A P R I L / M AY 2 0 1 4 • V O L U M E 8 • N U M B E R

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Cover Feature 12 Tech Talk Independent adjusters and claims managers got a crash course on the rapidly changing digital environment in the insurance industry and the broader economy at this year’s annual CICMA/CIAA Ontario joint conference. Presenters focused on topics ranging from ethics in social media investigations to fraud detection technology to the automobile claims settlement process.

BY CRAIG HARRIS

Spotlight

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20 Sunshine Sketches Mike Gojevic of Peninsula Adjusters embraces the rural lifestyle and supportive community atmosphere of British Columbia’s Sunshine Coast.

BY CRAIG HARRIS

Education Forum 38 Harnessing Internal Resources How the attributes of individual adjusting firms can lead to sustainable competitive advantage.

News Features 22 Condo Concerns The unclear application of deductibles poses a risk in handling condominium insurance claims.

BY RYAN EWASIUK

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28 Pilot Rescue A humble and reluctant hero saves lives after a floatplane flips over in Northern Manitoba.

BY PAUL GREENING

32 Breaking Bad How clean is “clean” when it comes to property damage and the health side effects associated with illicit meth labs?

Departments

BY KIRSTEN HOEDLMOSER

34 Whole Hog

4 First Notice

Quantifying economic damage for livestock losses, such as hog farms, presents challenges for adjusters.

40 On The Scene

BY CALA MITRA

Columns

36 Addressing E&O Exposures

10 President’s Message

How adjusters can avoid the squeeze of professional liability claims.

BY LEE AKAZAKI

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38 Education Forum

14-04-23 9:32 AM

• first notice FN B.C. unprepared for major quake: Auditor General Emergency Management BC is not prepared should a catastrophic earthquake occur in British Columbia, a new report from the province’s auditor general has concluded. Auditor General Russ Jones also found that neither the province nor EMBC has made preparing for a catastrophic earthquake a priority.

The report echoes conclusions from the Office of the Auditor General’s 1997 report on emergency management. It now says that in the past 17 years, EMBC “has not made significant progress.”

“Successive governments have decided to allocate scarce public resources to meet more immediate pressing demands, rather than to adequately prepare the province for a catastrophic earthquake that may or may not occur,” Jones said in a press release.

“EMBC’s current operating budget for emergency activities is approximately the same as it was in 2006. In addition, EMBC staff is busy with daily emergencies such as floods and fires so catastrophic earthquake planning is done as a side-of-desk activity.”

The report points to EMBC’s response to a potential tsunami in Haida Gwaii in 2012 as an example of its deficiencies.

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“EMBC’s internal report on this incident found that EMBC did not have sufficient personnel with the experience, knowledge and training to effectively respond to an earthquake and tsunami events and their standard operation procedures were inadequate,” the report says.

The organization’s mandate is also broad, and other emergencies such as floods and fires consume much of its staf f ’s time, the repor t notes.

Overall, the report includes nine recommendations for improving B.C.’s earthquake response, including that “the government develop long-term goals for catastrophic earthquake preparedness, including what it expects EMBC to achieve in the next five, 10 and 15 years.” It also suggests that EMBC report annually to the public on its level of preparedness so that British Columbia residents can assess their own vulnerability and readiness.

“EMBC appears to have taken the report quite seriously and is working to develop and implement strategies to address the deficiencies noted in this report,” the Office of the Auditor General’s statement noted. l

Water damage accounts for over half of home claims: Aviva More than half of all home insurance claims last year involved water damage, with water damage claims payouts rising 69% over 2012, Aviva Canada said in a release in late March.

“With last year’s storms, water damage reached an all time high making up 51% of all Aviva Canada property claims,” Wayne Ross, vice president of property claims for Aviva Canada said.

“The flooding in Alberta and Toronto certainly played a big part in the increase, but the general trend is upward. And as severe weather events are growing in frequency, we expect to see more situations like this in the future.”

The company paid out $190 million in water damage claims last year. Even without the Alberta and Toronto area events, water damage would still have made up 40% of all of Aviva Canada’s property claims, it noted.

Its data also showed that in 2013, the average cost of a water damage claim rose to $20,537, a 130% increase versus the $8,944 that the company experienced 10 years earlier. Even with the flooding catastrophes removed, the figures have trended higher for a number of years, the company said.

“The reasons for the upward trend are rather simple,” Ross added. “The increasing investment Canadians are putting into their basements, combined with more frequent severe weather events and an aging sewer system that is unable to deal with large amounts of water within a short time period, results in a lot of homes experiencing damage.” l www.claimscanada.ca

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• first notice FN Interest growing in usage-based auto insurance Canadian drivers are receptive to purchasing usage-based auto insurance policies, fairly in line with other global markets, according to a new survey from professional services firm Towers Watson.

More than half (56%) of drivers here said they have a “strong interest” in purchasing a UBI policy, according to the research. A majority (85%) also said they would be open to such a program, with 94% expressing interest if they were guaranteed their premiums wouldn’t rise.

Indeed, the primary concern with UBI revolved around the possibility that premiums might increase (47% of respondents), although privacy issues such as sharing of consumer data (46%) and apprehensions around using data to invalidate claims (46%) were also concerns, based on the survey.

“The Canadian UBI market has quickly developed into a rapidly changing landscape,” Robin Harbage, global lead for Towers Watson’s UBI practice and DriveAbility service offering commented.

“Until recently, UBI in Canada was limited to just a few programs, but over the past year new entrants have entered the marketplace and increased the range of products available,” he added.

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Almost half (48%) of respondents indicated they would be willing to change their driving behaviour if using UBI technology, including by sticking to the speed limit (65%), keeping a safe distance from other vehicles (45%) and driving more considerately (45%).

In terms of value-added services, 65% said they would be willing to pay for them, with vehicle theft tracking proving most interesting (with 86% expressing interest). Automated emergency calling (85%) and vehicle wellness reports (79%) were also among the services considered most appealing.

Drivers said they would be willing to pay for these ser vices, with 56% prepared to pay between $3.75 and $7.50 a month, according to the sur vey. l

UBI

IBC says weather hit P&C insurers’ results hard in 2013 A turn in the weather last year proved enough to undermine the performance of the insurance industry, Gregor Robinson, senior vice president of policy and chief economist for the Insurance Bureau of Canada (IBC), said during Swiss Re’s 29th Annual Canada Outlook Breakfast in Toronto March 27.

“For 2013, results have been down significantly from 2012.

How can we explain that? In one word: weather,” Robinson told a room full of senior insurance and reinsurance representatives.

Taking away reserve releases from prior years, he pointed out that 2013’s modest underwriting gain of $250 million becomes a loss of more than $900 million.

Overall, combined loss ratio rose to 99% from 95.4%, loss ratio was up to 68.3% from 64.9% (the result of claims growth of 8% and a 3.7% increase in premiums), return on investment fell to 3.2% from 4%, return on equity (ROE) fell to 6.6% from 10.7%, and comprehensive ROE fell to 6.2% from 10.2%.

“Despite a difficult year, MCT (minimum capital test) rose to 240.6% from 237.3%, demonstrating the continuing resiliency and capital strength of the Canadian property and casualty industry,” Robinson said.

That difficult year was led by severe weather. Canada saw $3.2 billion in insured losses from severe weather in 2013 – the lion’s share of which related to the severe flooding in southern Alberta (more than $1.7 billion) and flash flooding in and around Toronto (more than $900 million). 2013 was the costliest year for insured catastrophe losses since tracking began in 1983, Robinson said.

The record cat losses had a major impact on property lines, he noted, reporting that personal property claims grew by 31%, and the loss ratio went from 58% to 73%. For commercial property, claims grew by 31%, and the loss ratio went from 62% to 77%.

While, Canada saw astonishingly good weather, few natural catastrophe losses and generally low claims costs in 2012, that changed markedly in 2013. “It looks as though 2014 is picking up where 2013 left off,” Robinson told attendees, citing severe winter storms and record cold temperatures across the country. l www.claimscanada.ca

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• first notice FN Insurers need to tell clients about flood exclusions: EY Canadian property & casualty insurance carriers need to work with government to determine how areas at risk of flooding can be insured, and they also need to “draw policyholders’ attention to exclusions,” suggests a report on the Canadian p&c insurance industry from Ernst & Young LLP released in early April.

“Flood insurance received ample focus in 2013, and insurers need to continue to work with governments to define areas of higher risk and determine how these can be insured,” EY said in the report.

“Many insurers already use state-of-the-art technology to understand areas at risk of flooding and factor these into policy decisions. Insurers also need to draw policyholders’ attention to exclusions to make sure they understand their coverage.”

The June 2013 floods in southern Alberta “brought to light the difference between overland flooding and sewage backup,” EY stated. “Although this has been an issue in the past, it was magnified by the extent of the disaster and the number of affected customers. Claims were being denied because they were for damage caused by overland flooding, which is not a default coverage but can only be added at extra cost.”

EY added some carriers “ended up paying out these claims even though they were not covered just to avoid reputation damage.”

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Subscription inquiries (416) 442-5600 • 1-800-668-2374 Fax: (416)Indeépendent 442-2191 Official Journal of the Canadian Adjusters’ Association

www.claimscanada.ca Produced by the publishers of Canadian Underwriter magazine

A bi-monthly magazine (6x per year), Claims Canada is published by BIG Magazines LP, a div. of Glacier BIG Holdings Company Ltd. Business Information Group is located at: 80 Valleybrook Drive, Toronto, ON, M3B 2S9.

Claims Canada magazine is the Official Publication of the Canadian Independent Adjusters’ Association [CIAA] and through its editorial content and circulation brings together the ‘entire property & casualty insurance claims market nationally’ with information and insight into the profession, business and people of insurance claims and loss adjusting.

All key claims process stakeholders are reached as part of our readership community – including: both CIAA member and non-member independent claims adjusting firms; insurance and reinsurance company executive, claims management

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Meanwhile, with satellite mapping, EY added, “insurers could better use predictive modeling and maps to inform policyholders and to underwrite areas that have higher risks of flooding.”

“We’ve said it before, but especially after a tough 2013, insurers need to invest in people, processes, methodologies and technology to meet the new requirements for risk analysis, distribution oversight and information transparency,” stated Doug McPhie, partner and EY Canadian insurance leader, in a release. l

Claims Canada

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Mike Wells Account Manager • (416) 510-5122 mike@canadianunderwriter.ca

and claims adjusting personnel; corporate risk managers and loss control professionals; insurance brokers; insurance law firms; forensic engineers and accountants; appraisal, restoration, rehabilitation and collision repair professionals; Insurance Institute chapters; insurance associations, regulators and related claims market recipients.

The contents of this publication may not be reproduced or transmitted in any form, either in part or in full, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent.

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14-04-21 12:14 PM

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Message from the President La Plume du Président MARIE GALLAGHER

Early in April, I had the privilege of attending two daylong educational events put on jointly by CIAA/CICMA in Edmonton and CIAA/IIBC and CIAA/CICMA in Vancouver.

Both events were well run and the educational components extremely informative. I particularly found the seminar put on by Western Region on Asbestos and Pacific Region’s seminar on Earthquakes very interesting. There was an excellent turn out at both events and judging from the many who I observed scribbling notes throughout each of the many presentations, I am sure that everyone in attendance went away with a lot more than just the continuing education credits provided.

I am looking forward to joining our Atlantic Region members and CICMA partners at their upcoming Annual Joint Conference in Halifax, June 11 – 12.

It never ceases to amaze me how much time and effort our members put in to the organizing of these kinds of events.

For over 60 years now, CIAA members across Canada have been volunteering their time to CIAA for the benefit of our members, insurers and ultimately, the insurance industry as a whole.

It is through the combined efforts of the many volunteers within our association and those of our industry partners such as CICMA, IIC, IBC, CDL among others that we are kept informed and updated on topics of relevance within our industry. There is no doubt that each person reading this has spent some time as a volunteer in one capacity or another over the course of their career. Whether it has been serving as an executive, committee or board member within our industry, helping to organize an insurance event or fund raising for a favourite charity, our volunteers make our industry go round.

Interestingly, just prior to my travels out west, I learned that the week of April 6 – 12, designated as National Volunteer Week for 2014 was the 40th anniversary of National Volunteer Week in Canada. Who knew?!

Apparently, every three years since 1997, Statistics Canada has been conducting the Canada Survey of Giving, Volunteering and Participating. Based on the 2010 survey, we know that 13.3 million people in Canada donate their time as volunteers. Reportedly, Canada has the second largest volunteer sector in the world, slightly behind the Netherlands.

In Canada, volunteers give over 2 billion hours to 160,000 charities and not for profits. A third of all volunteers are 10 Claims Canada

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Au début d’avril, j’ai eu le privilège de participer à deux événements de formation d’une journée, conjointement organisés par l’ACEI et l’ACDSA à Edmonton, et l’ACEI et l’IIBC, ainsi que l’ACEI et l’ACDSA à Vancouver. L’organisation de ces deux événements était excellente. Les volets éducatifs étaient très informatifs. J’ai trouvé le séminaire sur l’amiante organisé par la région de l’Ouest et le séminaire sur les tremblements de terre organisé par la région du Pacifique particulièrement intéressants. Beaucoup de gens étaient présents aux deux événements. D’après le nombre de personnes que j’ai vues, en train de prendre des notes tout au long des nombreuses présentations, je suis certaine que tous les participants ont acquis bien plus que les crédits d’éducation permanente qui étaient offerts.

J’ai hâte de me joindre aux membres de la région de l’Atlantique et aux partenaires de l’ACDSA lors de la prochaine conférence annuelle conjointe qui aura lieu à Halifax, les 11 et 12 juin.

Je suis toujours étonnée du temps et des efforts que nos membres consacrent à l’organisation de ce type d’événement. Depuis maintenant plus de 60 ans, les membres de l’ACEI à l’échelle du Canada consacrent bénévolement du temps à l’Association.

Ce sont nos membres, les assureurs et, en fin de compte, toute l’industrie de l’assurance qui en bénéficient.

Grâce aux efforts combinés de plusieurs bénévoles au sein de notre association et de ceux de nos partenaires de l’industrie, comme l’ACDSA, l’IAC, le BAC et l’Association canadienne des avocats de la défense, pour n’en nommer que quelques-uns, nous sommes tenus au courant des sujets pertinents dans notre industrie. Pendant leur carrière, tous les gens qui lisent ceci ont, sans aucun doute, consacré un peu de temps à titre de bénévoles, d’une manière ou d’une autre. Qu’ils siègent comme membres exécutifs, d’un comité ou d’un conseil au sein de notre industrie, ou qu’ils aident à organiser un événement relatif à l’assurance ou une campagne de financement pour leur organisme de bienfaisance préféré, nos bénévoles assurent le bon fonctionnement de notre industrie.

Il est intéressant de noter que, juste avant mon voyage dans l’Ouest, j’ai appris que la semaine du 6 au 12 avril, désignée comme la Semaine de l’action bénévole de 2014, marquait le 40e anniversaire de cet événement au Canada. C’est incroyable!

Il semble que, depuis 1997, Statistique Canada réalise, tous les trois ans, l’Enquête nationale sur le don, le bénévolat et la participation. Selon l’Enquête de 2010, 13,3 millions de personnes au Canada font don de leur temps à titre de bénévoles. Selon certaines sources, le Canada se classe au deuxième rang mondial en ce qui a trait au secteur du bénévolat, légèrement derrière les Pays-Bas. Au Canada, les bénévoles offrent plus de 2 milliards d’heures à 160 000 organismes de bienfaisance et sans but lucratif. Un www.claimscanada.ca

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baby boomers and nearly half of all boomers volunteer, making this the most socially engaged generation. Volunteers strengthen our communities and make our country vibrant.

And volunteering is not a one way street - numerous studies actually show that volunteering increases well being and life satisfaction.

A study conducted in 2011 found that 87% of employees who volunteered with their companies reported an improved perception of the employer. More importantly, 82% felt more committed to the organization they worked for. It is things like achievement, recognition, more responsibility and personal growth that help to make us happy at work – all concepts that have to do with personal fulfillment. And the benefit to employers? The improved physical and emotional health of employees who volunteer. A win-win all around.

CIAA is extremely fortunate to have and have had such dedicated volunteers working unconditionally for the good of the entire membership and their chosen profession. It has been said that an association’s stature depends solely on the experience, wisdom and selflessness of its volunteers, and in CIAA’s case this certainly could not be truer.

Sincere thanks to all past and present CIAA volunteers and to all future volunteers, we look forward to you continuing to build on the 60 year legacy established through the vision, professionalism and passion of those that have served before you. n

tiers des bénévoles sont des baby-boomers, et près de la moitié des baby-boomers font du bénévolat. C’est donc la génération la plus engagée sur le plan social. Les bénévoles renforcent nos collectivités et rendent notre pays dynamique. En outre, le bénévolat n’est pas à sens unique. Selon plusieurs études, le bénévolat améliore le bien-être et la satisfaction de vivre.

Selon une étude réalisée en 2011, 87 % des employés qui ont fait du bénévolat avec leur entreprise ont déclaré avoir une meilleure perception de leur employeur. Plus important encore, 82 % des employés éprouvaient un degré d’engagement supérieur à l’égard de l’entreprise pour laquelle ils travaillaient. Des facteurs comme la réalisation, la reconnaissance, davantage de responsabilités et le développement individuel contribuent à nous rendre heureux au travail. Ce sont tous des concepts liés à l’épanouissement personnel. Quels en sont les avantages pour les employeurs? La meilleure santé physique et mentale des employés qui font du bénévolat. Tout le monde y gagne.

L’ACEI est très chanceuse d’avoir actuellement et d’avoir eu des bénévoles si dévoués qui travaillent avec acharnement pour le bien de l’ensemble des membres et la profession que ces derniers ont choisie. Selon certains, l’envergure d’une association dépend uniquement de l’expérience, de la sagesse et du désintéressement de ses bénévoles. Dans le cas de l’ACEI, c’est absolument vrai.

Nous souhaitons remercier sincèrement tous les bénévoles actuels et anciens de l’ACEI, ainsi que les bénévoles futurs. Nous espérons que vous continuerez à bâtir sur cet héritage de 60 ans, instauré grâce à la vision, au professionnalisme et à la passion des gens qui ont servi avant vous. n

NATIONAL EXECUTIVE 2013-2014 2011-2011 PRESIDENT Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 • Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com 1ST VICE-PRESIDENT David Porter, LL.B., FCIP, CRM Granite Claims Solutions 400 – 4370 Dominion Street Burnaby, BC V5G 4L7 Phone: (604) 659-6559 • Fax: (604) 659-6570 E-mail : david.porter@graniteclaims.com 2ND VICE-PRESIDENT Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 • Fax: (905) 896-3485 E-mail: apoon@cl-na.com SECRETARY Dara Banga, FCIP, CFEI DSB Claims Solutions Inc. 204 Main Street North, Brampton, ON L6V 1P1 Phone: (416) 400-8933 • Fax: (905) 915-4685 E-mail: dara.banga@dsbclaims.com

www.claimscanada.ca

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TREASURER Russell Fitzgerald, CIP Kernaghan Adjusters Limited 203 – 4246 97 Street N.W. Edmonton, AB T6E 5Z9 Phone: (780) 488-2371 Fax: (780) 488-0243 E-mail: rfitzgerald@kernaghan.com PAST-PRESIDENT John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca EXECUTIVE DIRECTOR Patricia M. Battle Canadian Independent Adjusters’ Association/ L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Avenue West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca

DIRECTOR James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 • Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca DIRECTOR Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 • Fax: (905) 896-3485 E-mail: apoon@cl-na.com DIRECTOR John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 • Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com DIRECTOR Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 • Fax: (416) 492-5657 E-mail: cwalker@maltmans.com

April/May 2014

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• cover story

TECH TALK Independent adjusters and claims managers got a crash course on the rapidly changing digital environment in the insurance industry and the broader economy at this year’s annual CICMA/ CIAA Ontario joint conference.

Presenters focused on topics ranging from ethics in social media investigations to fraud detection technology to the automobile claims settlement process. Keynote speaker Amber MacArthur pointed to the future of technology and the emergence of the “digital native.”

BY CRAIG HARRIS

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Three speakers tackled the topic of technology from different viewpoints.

Carol Kreiling, a vice president at Swiss Re, examined the implications of social media in claims investigations. Steven Dubenow, national manager for CKR Global, looked at the role of sophisticated analytics technology on fraud prevention. And John Kostsopoulos, president and CEO of iAutoConnect, traced the evolution of technology in auto insurance claims processing.

do we “evenWhere begin to talk about claims technology and how it has changed and impacted claims investigations?

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echnology is a double-edged sword. With the advance of computing devices and programs like tablets, smartphones and field-based software, adjusting professionals can today do their work with greater efficiency and more flexibility. Internet claims reporting forms and services get rid of much of the delays and redundancies of paperwork. Research and investigation techniques have benefited enormously from publicly available information on social media.

And yet the gains of automation can also prove illusory. Some contend that the increased caseloads of adjusters resulting from technological efficiency can lead to burn out and undue pressure on file “closure.” Keeping up with everincreasing client expectations of 24x7 service only adds to that pressure. And then there are the potential ethical issues surrounding social media, privacy and claims investigations, not to mention the threat of cyber liability (think: Heartbleed Bug).

How technology has changed the profession of claims handling was the subject of this year’s 47th annual joint CICMA/CIAA Ontario chapter conference February 4 at the Metro Convention Centre in Toronto.

“The pace of change in information technology over the past 20 years has been nothing short of dizzying,” noted Brian Maltman, Master of Ceremonies for the event and executive director of the General Insurance OmbudService (GIO). “It affects how we deal with claims, as much as it does the rest of our lives. We are now looking at cloud computing and social media. Is it good, is it bad – or is it both?”

Keynote speaker Amber MacArthur rounded out the event with a leadingedge seminar on the latest in digital advances.

Ethics and Social Media “Where do we even begin to talk about claims technology and how it has changed and impacted claims investigations?”

Kreiling asked in her lead-off presentation. “The better question may be: what hasn’t changed with claims technology? If we look at the way we report claims, the way claims are assigned by us, monitored by us, tracked by us – there is a constant evolution. Just ten years ago, the technology used then is now considered annotated, antiquated and outdated.”

Kreiling noted that adjusters and claims managers are always looking at ways to make their processes and systems work better. Social media is just one more tool to thoroughly adjudicate claims. “Any good claims investigator will include social media investigations in his or her toolkit,” she noted.

She cited one line from the movie the Social Network: the Internet is not written in pencil; it is written in ink. “That is manna from heaven for the claims investigator.“ Kreiling urged participants to keep in mind all of the available social media platforms for use – not just Facebook, Twitter and MySpace but also hi5, Instagram, Snapchat. She noted that all these forums present a vast source of information available for public viewing and online research.

“It’s incredible what people will post,” she said. “Let’s just say someone who has filed a claim for a debilitating back injury, it is perhaps not the best idea to show photographs of themselves on vacation spelunking down into a cave, or photos from their recent dance performance.”

Kreiling also explained ethical guidelines around social media usage and investigations. “Whether you are a claims adjuster, claims manager, claims investigator or claims lawyer, there are ethical rules out there that you must obey,” she noted. “For example, the CIAA’s code of ethics states that adjusters will identify themselves as an insurance adjuster in dealings with any policyholder or claimant and shall, if requested, fully identify their principals.”

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In a questionable claim, it is typically before any legal action that adjusters or investigators will get “your digital pay dirt,” according to Kreiling. “Ethically speaking, it is perfectly okay for us to view a Facebook page of a claimant on a public setting; there is nothing wrong with that.”

The usefulness of social media extends to litigation management, as well.

“Even when you have a claimant go-

that person’s next-door neighbour, who doesn’t have a lawyer, to possibly obtain some impeachable information about the claimant. There is absolutely nothing wrong with that.”

However, there are some important “don’ts” when it comes to social media and claims investigations, according to Kreiling. In both Canadian and U.S. court examples, there are consistent rules around transparency.

ample, may not ask a paralegal or investigator or anyone else to do anything else that he is not allowed to do.”

Kreiling argued that, despite the rapid advances in technology and social media, the claims investigation process still operates by tried-and-true standards.

“The bottom line here is that think of this in terms of conducting a claims investigation back in the (pre-social media) days,” she concluded. “We found out information about claimants publicly, and we didn’t use deception. The same applies to gathering social media evidence electronically – follow that claimant publicly and don’t use subterfuge.”

Fraud Detection Technology

Far from holding out fraud detection technology as the holy grail of “plug and play,” Dubenow argued that these tools should only be used in the larger context of crime prevention. ing to trial, some people think their job is done. There are lots of ways to continue to use social media technology at trial,” Kreiling noted. “If that person is represented by a lawyer, you may not send a friend request to the claimant.

But let’s say you send a friend request to 14 Claims Canada

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“What you may not do is use subterfuge to get that person to accept a friend request; the rules are pretty clear on that,” she observed. “That also goes against CIAA’s code of ethics. Also, if you can’t do it, you are not allowed to ask anyone else to do it. A lawyer, for ex-

Steven Dubenow of CKR Global, a risk mitigation and investigation services company, was the next presenter and focused on the role of technology in fraud detection and prevention. A certified polygraph examiner and forensic psycho-physiologist, Dubenow says his firm has experience in ”handling problematic front-line claims.”

“In my opinion, you can put all the technology you want in place, you can screen claims to a very high degree, but nothing will replace fraud detection better than an adjuster who is in tune and asking the right questions,” Dubenow noted. “When I sit down with good adjusters, they say things like: ‘I don’t know what it is, but I don’t like it. I can’t put my finger on it, but something doesn’t feel right.’”

He explained that “seeing the trees for the forest” is part of the job. “We are examining in very strong detail every nuance; we are looking for that little piece of information that is going to take the claim to the next level of detail and show us what has been missing.”

What can happen, however, in any claims investigation is that adjusters and fraud specialists sometimes miss the “big

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Case 1752

picture,” he noted. “This can happen to any of us, but especially to claims adjusters. The pressure on adjusters is so great and the caseload is so high, I don’t know how anyone would expect an average adjuster to detect fraud within his or her files. The average adjuster in auto physical damage is carrying 200-300 claims files; they barely have enough time to get to whatever their quota is to close files, never mind spending a half hour on each one to vet it.”

Dubenow’s observation is that “the adjusters who I think are the best at this are those who have set up some fairly basic premises and guidelines that they apply to each file. Does it make sense? Then they use that to look at the big picture. They are not focused on a red flag system or 50 things with or without a checkmark.”

In terms of fraud detection technology, Dubenow cited BAE Systems Detica and SAS as two of the leading software and analytics providers in the financial services industry. They provide predictive modeling, link analysis, neural networks and other techniques to find suspicious claims patterns in insurance companies and, in some cases, across insurance companies.

Dubenow cited Project Sideswipe as a good example of how technology can help link together hidden fraud patterns in multiple insurer data sets. This project was a large-scale investigation that resulted in more than 200 charges against 60 people for allegedly staging crashes in York Region and submitting nearly a million dollars in fraudulent insurance claims.

“These are people and criminals that are constantly probing insurers,” Dubenow noted. “Organized crime has a lot of money, a lot of resources and a lot of manpower. Despite what anyone in this industry says, they are also really, really smart.”

Far from holding out fraud detection technology as the holy grail of “plug and play,” he argued that these tools should only be used in the larger context of crime prevention.

“I don’t like anything that looks like a magic trick,” Dubenow noted. “Yes, we use technology and very complex databases to ex trapolate data and find some consisten-

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cies. But we want a human element. And that involves a well-trained analyst who is vetting the data and looking at the data as it is coming out.”

CKR Global has developed its own proprietary link analysis program, according to Dubenow. “We take large volumes of information and transfer that to a visual format,” he said. “In starting to outlay a link analysis chart, we can see

a teacher driving to work and hitting a cyclist, who the teacher claimed not to know. “(The teacher) referred to the cyclist in terms of somebody other than a stranger,” he noted. “It was something that made the adjuster uncomfortable.”

Through a link analysis chart, CKR Global used drivers’ abstracts, property registrations, real estate transactions, driver’s licenses and other information

New technology, including driverless cars and vehicles with built-in collision prevention technology like crash avoidance systems, lane change/forward crash warning, and steering wheel sensors, will have a dramatic effect on loss frequency and how claims are handled. where we need to look and what we may be missing.”

Dubenow demonstrated a real-life example of a link analysis chart that allowed an adjuster and an insurance company to spot a fraudulent file. The claim involved 16 Claims Canada

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to establish that the cyclist, who had changed his name years prior to the accident, was, in fact, the teacher’s brotherin-law.

“In this small data capture that an insured paid I think it was about $1,800 for,

we were able to bring this chart forward and say, ‘what seemed to be is not.’ Obviously based on this data, the insurer was able to deny the claim,” Dubenow said.

Hi-Tech Auto Claims John Kotsopoulos, president and CEO of iAutoConnect, then spoke about the impact of technology on the claims settlement process. He showed the evolution of auto claims processing technology – from green screens to CDs to the first bi-directional automated communication between insurers and repair shops.

New technology, including driverless cars and vehicles with built-in collision prevention technology like crash avoidance systems, lane change/forward crash warning, and steering wheel sensors, will have a dramatic effect on loss frequency and how claims are handled, he said.

“The whole idea behind this is to reduce claims count,” Kotsopoulos noted.

“The in-city collision claims count, they’re predicting over the next five to seven years, is going to go down 30%.

That’s your gravy, that’s your day-to-day.

There will be a reduction in loss frequency.”

With more sophisticated technology and more expensive parts, newer vehicles will also mean higher claims payouts for physical damage, or potentially increased claims severity.

“This is pretty high-end stuff, so how do you write the appropriate premium on it,” he observed. “Do you write a lower premium because the vehicle is now safer, or do you try to predict that this car will actually be involved in an accident or get totaled and now you’re going to pay through the roof because the technology is built into the vehicle?”

To achieve greater efficiencies in auto claims settlement, Kotsopolous explained that one key trend in the future will be managing by exception. With www.claimscanada.ca

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tools like data mining, 95% of claims could be automated through the settlement process, he noted.

“Managing by exception means only taking out those (repair) vehicles that don’t meet the insurer’s criteria,” he said.

“There is technology today that will supposedly help you do this, but to this day, it is not happening. There are some who are doing better than others, but there is still lots of room for improvement.“

Brave New World Amber MacArthur, a digital and social media specialist, gave her keynote presentation on how technology

has evolved in the broader social and economic context. One tangible way to show these changes is a “technology timeline,” she noted.

MacArthur cited the example of the “personal electronic transactor” (or computer) that weighed 44 pounds circa 1970. Then, the emergence of the first “brick” cell phone that sold for $3,995 around 1980. Circa 1990s, people were talking about the Internet as a new development; by 1999, 38 million people in the U.S. had broadband access.

Fast forward to 2014. More than 50% of the population owns smartphones (19.7 million Canadians). The new iPad

Air weighs 1 pound and its use is ubiquitous throughout the house; 69% use it in the bedroom and 42% in the kitchen.

19 million Canadians are on Facebook and 74% check it every day –the highest usage rate of any country in the world.

Today, 3-to-5 year-olds are more likely to know how to use a computer mouse than to tie their own shoes.

The explosion of mobile technology and social media has changed the pace of digital developments at a rapid clip.

Quoting famous racecar driver Mario Andretti, MacArthur told the audience: “If everything seems under control, you’re just not going fast enough.”

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Tech Tidbits • 38% of children under 2 years of age use smartphones • Fastest growing demographic on Twitter is 55-64 year-olds (up 70% since 2012) • 874 million Facebook monthly users: Canada has highest rate of daily users • Every second, two new members join LinkedIn

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“This was one of the first examples of real-time social media,” MacArthur noted. “It was something that no other company had done.”

A third rule of social media (the “C”) is to create value. MacArthur used the example of McDonald’s restaurants in Australia, which “has used technology to create value by allowing its customers

(digital) generation we all need to be prepared for.”

The warning about the coming generation of digital networkers seems particularly appropriate for an insurance sector that has been slow to change. It raises several questions.

Can the insurance industry keep up with new generations of digital natives?

SOCIAL MEDIA

“In 2010, I used to talk about the rules of engagement for social media and I would talk about the ABCs – authenticity, bravery and consistency,” she noted.

“This has changed in 2014.”

A new “A” is to adapt quickly… or fail.

MacArthur cited the example of Kodak, the camera company that did not keep up with changing technology and ultimately declared bankruptcy. According to The Economist, “Kodak sold cheap cameras and relied on customers buying lots of expensive film… That model obviously does not work with digital cameras. Still, Kodak did eventually build a hefty business out of digital cameras – but it lasted only a few years before camera phones scuppered it.”

The second rule of engagement is the “B” of be responsive. MacArthur pointed to the Super Bowl football game in New Orleans in 2013 when there was a power outage in the third quarter.

Oreo’s advertising company sent a timely tweet that went viral. “Power Out? No Problem.” read the post, which was linked to a photo of an Oreo and the tag line, “You Can Still Dunk In The Dark.”

It quickly resulted in 15,000 retweets, and added about 8,000 Twitter followers for Oreo.

“Whether you are using social media in your business or at home, chances are there is someone younger, adapting more quickly and changing all the rules.” to research and track where their food came from.” Specifically, TrackMyMacca is a free iPhone app that customers can track where feature ingredients in the actual food purchased came from. It uses a phone’s GPS, image recognition, plus the date and time, to access McDonald’s supply chain.

“The future networker is a digital native,” MacArthur concluded in her presentation. “Whether you are using social media in your business or at home, chances are there is someone younger, adapting more quickly and changing all the rules. This is the

How will the face-to-face service orientation of independent adjusters meet the expectations of mobile users who want everything to be handled via smartphone apps? Will technology lead to less human intervention in claims handling and unintended consequences? Can the sound judgment of independent adjusters be augmented or supplemented by advances in digital and social media?

These questions show that the conversation about the role of technology in claims management and insurance is ongoing and evolving. The tech talk continues.  www.claimscanada.ca

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• spotlight S

Sunshine Sketches

Mike Gojevic of Peninsula Adjusters embraces the rural lifestyle and supportive community atmosphere of British Columbia’s Sunshine Coast.

BY CRAIG HARRIS

F

or adjuster Mike Gojevic, a 23-year career in insur- some commercial, motor cargo claims; there is a lot of logance has led him across the country – and back home. ging in this area, pulp and paper mills and boating/marine.”

A native B.C. resident, Mike has worked in areas The different pace of life on the Sunshine Coast merits ranging from Red Deer, Alberta to Fort Frances, Ontario. an approach that reflects the needs of local communities Born and bred in Vancouver, he always wanted to return and businesses. “It’s a rural area, so you are dealing more to the West Coast. A chance conversation in early 2007 with with one-person construction and restoration firms,” Gothe owner of a small one-man adjusting firm in Sechelt, jevic observes. “A lot of business is done on a handshake and B.C. provided just that opportunity. a smile. It’s a different lifestyle than the mainland.”

“I had never met (Peninsula Adjusters Ltd.’s founder) Gojevic’s seven-year history as owner of Peninsula Phil Thirwal and had never been to Sechelt, but I was in- Adjusters caps an interesting career trajectory that saw terested in running my own business,” Gojevic says. “We him first get into insurance as a road adjuster with a madiscussed it, I looked at the financials (with the help of my jor insurer in 1991 in Red Deer. From there, he moved to brother) and by April 2007, I was adThunder Bay as a property specialist justing claims on the Sunshine Coast. and claims manager responsible for It’s funny – It was that fast.” a large northern swath of Ontario. A This area of B.C. is a stretch of the you think you know stint as a claims manager with anothmainland coast north of Vancouver exer major insurer in Mississauga conwhat independent tending from Howe Sound in the south vinced Mike that big-city life was not adjusters do when to Desolation Sound in the north, his calling. punctuated by deep sea inlets, coastal In fact, it was then that he decided you are a claims bays, rugged mountains and inter-conto move from working as an insurexaminer, but you nected lakes. The Sunshine Coast lies ance company employee to become along the Georgia Strait across from part of an independent adjusting firm. really don’t Vancouver Island, and has several small Mike was hired by a small adjuster in understand exactly towns including Sechelt, Powell River, Fort Frances, and quickly became imLangdale (the terminal for ferries from mersed in the life of an independent. what is involved in Horseshoe Bay) and Halfmoon Bay, “It’s funny – you think you know the role until where Mike lives and runs his business. what independent adjusters do when With a total population hoveryou are a claims examiner, but you reyou do it. ing just above 50,000, the collection ally don’t understand exactly what is of communities is an eclectic mix of involved in the role until you do it,” retirees, artisans and First Nations people, coupled with Gojevic notes. “I found it invigorating; there is a lot of freenatural resource economic mainstays of forestry, pulp and dom, but you have to be self-reliant and you are very much paper, mining and fishing. Housing prices in the area are accountable. Your paycheque depends on the work you do. often less than half than those of the Lower Mainland.

It was a big change going from insurer to independent.”

When Gojevic took over Peninsula Adjusters (formed in It was in Fort Frances that Gojevic collaborated with Phil 1994), he carried on its tradition of providing trusted, reli- Thirwal of Peninsula Adjusters on a few claims for a major able service across all lines of business. insurance company. After Phil , who was approaching re“When you’re a one-man show, you have to do every- tirement, asked him about his interest in returning to the thing,” he says. “Residential property claims form a big part West Coast, the die was cast. Mike was ready to move his of what we do here, especially water damage. We also do wife and three daughters to the Sunshine Coast.

“

“

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“Coming out to B.C., I was confident about the business, but there was a bit of worry about moving your family to a new community,” he recalls. “Almost as soon as I got here, I realized it was an excellent fit. It is a beautiful area, the people are great and the community is welcoming and supportive. It has worked out well.”

That sense of tight-knit community support was put to the test when Mike suffered a serious illness in 2012.

He was aboard an airplane en route to Las Vegas for a vacation, when he experienced difficulty breathing. It got worse and he required oxygen on the plane. Once landed, he was rushed to a Las Vegas hospital and then transported back to a Vancouver hospital. The diagnosis: pulmonary fibrosis. Tests showed that he needed a double lung transplant. www.claimscanada.ca

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Mike received the life-saving operation in February 2013, and, after a lengthy recovery, slowly started back to work in the summer of 2013. Today, a little more than one year after his surgery, he is healthy and amazed that he can go for a morning 5 km run – especially given that the process of just sitting in a chair and trying to breathe on his own was a major feat in 2012.

One thing that stands out in his mind was how the community pulled together to help him and his family when he could not work. “The community held several fundraisers to help support us through a challenging time,” says Gojevic, who adds that he has always been a major supporter of organ donation. “It was amazing the outpouring of generosity. People who didn’t know me from Adam, but were aware of the situation, helped out. It was just awe inspiring how people came together as part of the community.”

Another part of the recovery process for Gojevic was reconnecting to his insurance company customers. “I have some excellent clients – they understood the situation, had a lot of belief in me and allowed me to ease back into handling claims,” he notes.

Developing solid relationships with insurer is vital to any independent adjusting firm, according to Gojevic. “It is not just a matter of having your name out there,” he says.

“Claims managers need to be able to trust you in handling every aspect of a claim. That is even more the cases in rural areas where we have independently owned contractors.

Insurance companies rely on you even more to oversee the claim.”

Gojevic notes that in catastrophic loss situations, such as a potential earthquake, insurers rely even more on independent adjusters. He cites the recent report of the B.C. auditor general that concluded the province is not fully prepared to deal with a big earthquake.

“I have been to a lot of EQ seminars over the past several years and there is an awful lot of talk, but I don’t see as much action when it comes to preparedness,” Gojevic observes. “The practical work of getting prepared differs greatly among insurance companies.”

“From an independent standpoint, it is an opportunity for me to make sure I have a good CAT plan in place, so when that large event does occur, I will be prepared to help out the insurance companies.”

For Gojevic, the independent adjuster can fill in the gaps for insurers and provide the services they need in sometimes challenging large-scale loss events. He is confident that, despite the cyclical ups and downs of the insurance industry and fluctuating revenue levels for adjusters, there will always be a need for trusted independent claims professionals.

“When you look around at the merger and acquisition activity, you sometimes get the sense that the smaller independent is a dying breed,” Mike concludes. “However, I believe if you do your job well, you will always get the work.”

“When I am ready to retire, I want to do the same thing as my predecessor and pass the firm along to an independent adjuster looking for a great opportunity.”  April/May 2014

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Condo Concerns

The unclear application of deductibles poses a risk in handling condominium insurance claims.

BY RYAN EWASIUK

The rules for who pays what in insurance claims between condominium corporations and unit owners are clear. A condominium corporation must provide insurance on the common elements of the property (e.g., hallways and stairs) and the units against loss resulting from any peril prescribed or otherwise required by the regulations, such as fire, water escape, and lightning. Generally, the insurance that a condominium corporation maintains is deemed to be the primary, or first loss, insurance.

A unit owner’s insurance policy covers personal belongings, improvements to the unit and personal liability for bodily injury or property damage to neighbouring units. The insurance placed by the unit owner in respect of the same property is deemed to be excess insurance or applicable only if the corporation’s insur22 Claims Canada

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ance is inapplicable, inadequate or ineffective.

What is less clear, however, is whether the unit owner or the condominium corporation bears responsibility for payment of the deductible portion of an insurance claim.

Determination Flows from Statutes and By-Laws Alberta In the case Condominium Plan No 0122336 v Shivji, 2007 ABQB 572, two units were damaged because water escaped from a frozen pipe. The condominium corporation had an insurance policy in place, but the amount of the damage was below the deductible. The question posed to the Court: who was responsible for the deductible?

Justice Lee looked at the Condominium Property Act, R.S.A. 2000 c C-22 and the condominium corporation’s by-laws. He found that although the Act and the by-

laws were silent as to payment of the deductible, the unit owner was not responsible for the deductible. He reasoned that because the Act and the by-laws required the condominium corporation to insure the units and the common elements of the property against damage caused by the sudden escape of water, a covenant to insure was created in favour of the unit owner. The condominium corporation thus assumed the risk of the damage and was barred from suing the unit owners to recover the costs of repairs.

Shivji emphasizes that although condominium corporations are not insurers for the deductible, the issue of responsibility for the payment of the deductible is determined by the by-laws, rules and regulations of the condominium corporation.

Ontario In Ontario, the Condominium Act, 1998, S.O. 1998, c 19, stipulates that if a condominium corporation’s policy www.claimscanada.ca

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contains a deductible, then the portion of the loss that falls within the deductible is treated as a common expense to be paid by all unit owners. However, the Act also provides that if the owner is “at fault” (where the damage is the result of the acts or omissions of the owner), the owner is responsible for the costs of the repairs up to the deductible. The Act also permits condominium corporations to enact by-laws that extend the circumstances in which the unit owner will be found responsible for the payment of the deductible.

The responsibility of paying the deductible may be determined by the by-laws of the condominium corporation. However, Ontario courts have also looked at whether the loss occurred as a result of an “act or omission of the owner” in determining who is responsible for the deductible.

This was the case in Zafir v York Region Condominium Corp No 632, 2007 CarswellOnt 1044 (ON SCJ). In Zafir, the issue was whether the owner turning off the shut-off valve that resulted in a leak made the owner responsible for the deductible. In denying the condominium corporation from recovering the cost of the repairs from the unit owner, Justice Conway found that opening and closing the shut-off water valves was not an “act or omission” under the Act. Justice Conway reasoned that it would be inequitable for the owner to be held responsible for an act that the condominium corporation required the owner to take.

While there is no clear guidance as to who is responsible for paying the deductible, Zafir is good authority on the issue. Zafir emphasizes that the question of who pays the deductible is best answered by the by-laws, rules and regulations of the condominium corporation and by determining whether the damage was the result of an “act or omission” by the owner.

sponsible for” the loss or damage. The owner may be responsible for the loss or damage notwithstanding that the owner was not negligent.

In Strata Corporation LMS 2723 v Morrison, 2012 BCPC 0300, the unit owner was found responsible for the damage caused by a fire resulting from her tenant leaving a lit candle unattended. Justice Merrick found that although the unit owner had no control over the candle, she is responsible for what oc-

curs in the unit. As a result, Justice Merrick allowed the strata corporation to recover the deductible portion from the unit owner.

In finding the unit owner “responsible” notwithstanding that the owner was not negligent, Justice Merrick followed Mari v Strata Plan LMS 2835, 2007 BCSC 740, and Wawanesa Mutual Insurance Company v Kieran, 2007 BCSC 727.

In both cases, the Court made it clear that being responsible is not the same as

British Columbia In British Columbia, the question of the deductible is determined by looking at the Strata Property Act, SBC 1998, c 43, and the by-laws, rules and regulations of the strata corporation. Under the Act, the deductible payable under the strata corporation’s policy is a common expense to which all unit owners contribute. However, the Act also permits a strata corporation to recover the deductible portion of an insurance claim from a particular owner if the owner is “rewww.claimscanada.ca

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being negligent, and that a unit owner “responsible for” loss or damage will be required to pay the insurance deductible.

In British Columbia, a strata corporation’s by-laws, rules and regulations will generally set out who is responsible for paying the deductible portion of an insurance claim. However, it is also important to determine whether the unit owner is “responsible for” the loss or damage that gave rise to the claim, since British Columbia case law makes it clear that a unit owner “responsible” for the loss or damage will be required to reimburse the strata corporation for the deductible.

Conclusion The Courts in Alberta, Ontario and British Columbia have not provided clear guidance as to whether the condominium corporation or the unit owner will be liable for the deductible portion of an insurance claim. Some cases have allowed the condominium corporation to recover the deductible portion from the unit owner, while others have not.

Where the by-laws are silent or are unclear, the issue turns to who is liable or responsible for the loss or damage, or as in Alberta, to whom the risk is allocated.

What is clear, however, is that the determination of liability for the deductible is fact specific and heavily

dependent on the provisions of the applicable statute and the by-laws, rules and regulations of the condominium corporation. Where the by-laws clearly specify that the owner is required to reimburse the condominium corporation for the deductible portion of an insurance claim, it follows that the owner is responsible for the deductible. However, where the by-laws are silent or are unclear, the issue turns to who is liable or responsible for the loss or damage, or as in Alberta, to whom the risk is allocated.

It is incumbent upon condominium corporations and unit owners to review the by-laws, rules and regulations to determine whether it is clear who bears the responsibility of paying the deductible portion of an insurance claim.  Ryan Ewasiuk is a partner with Brownlee LLP, with over 15 years of experience on a vast array of litigation maters, including large and complex insurance claims.

Get the job. Done.

TM

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CIAA REGIONAL PRESIDENTS 2013 – 2014 NEWFOUNDLAND & LABRADOR Marcel Pitcher, CIP, CRM Crawford & Company (Canada) Inc. 96 Clyde Avenue, Suite 310 Mount Pearl, NL AlN 4S2 Phone: (709) 753-6351 Fax: (709) 753-6129 E-mail: Marcel.Pitcher@crawco.ca NOVA SCOTIA E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca NEW BRUNSWICK & PRINCE EDWARD ISLAND Luc Aucoin, BBA, FCIP Plant Hope Adjusters Ltd. 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: laucoin@planthope.com QUEBEC/AESIQ Claude Nadeau Cunningham Lindsey Canada Claims Services Ltd. 1250 Guy Street, #1000 Montreal, QC H3H 2T4 Phone: (514) 939-1570 Fax: (514) 938-5445 E-mail: cnadeau@cl-na.com ONTARIO Dorothy Lowry, FCIP Crawford & Company (Canada) Inc. 15 - 431 Bayview Drive Barrie, ON L4N 8Y2 Phone: (705) 728-5597 Fax: (705) 728-2167 E-mail: Dorothy.Lowry@crawco.ca MANITOBA Timothy W. Bromley J.P. Hamilton Adjusters Ltd. 125 Enfield Crescent Winnipeg, MB R2H 1A8 Phone: (204) 944-1057 Fax: (204) 944-1606 E-mail: tbromley@mts.net SASKATCHEWAN Cheryl Hanson Crawford & Company (Canada) Inc. 210 – 227 Primrose Drive Saskatoon, SK S7K 5E4 Phone: (306) 931-1999 Fax: (306) 931-2212 E-mail: Cheryl.Hanson@crawco.ca WESTERN Reid Townsend, CIP Canadian Claims Services Inc. 17958 - 106 Avenue Edmonton, AB T5S 1V4 Phone: (780) 443-1185 • Fax: (780) 443-1893 E-mail: rtownsend@canclaims.com PACIFIC Blair McGregor, CIP Granite Claims Solutions 400 - 4370 Dominion Street Burnaby, BC V5G 4L7 Phone: (604) 659-6558 • Fax: (604) 659-6570 E-mail: blair.mcgregor@graniteclaims.com

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National Standing Committees 2013-2014 ADVISORY David Porter, LL.B., FCIP, CRM Granite Claims Solutions 400 – 4370 Dominion Street Burnaby, BC V5G 4L7 Phone: (604) 659-6559 Fax: (604) 659-6570 E-mail: david.porter@graniteclaims.com

Laurie Walker, CIP Granite Claims Solutions 5915 Airport Road, Suite 300 Mississauga, ON L4V 1T1 Phone: (905) 740-1784 Fax: (905) 671-1889 E-mail: laurie.walker@graniteclaims.com

Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com

Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 - 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com

John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca

Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com

James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca

Jo-Ann Eccleston, CIP Aviva Canada Inc. 2206 Eglinton Ave. East Toronto, ON M1L 4S8 Phone: (416) 689-3328 Fax: 1-866-805-8585 E-mail: CONVENTION jo-ann_eccleston@avivacanada.com Matt Allan, CIP, CRM Granite Claims Solutions Bob Grouchy, BA, FCIP, CRM Suite 300, 5915 Airport Road Allianz Global Mississauga, ON L4V 1T1 1600 – 130 Adelaide Street West Ph: (905) 671-3164 • Fax: (905) 671-1889 Toronto, ON M5H 3P5 E-mail: matt.allan@graniteclaims.com Phone: (416) 915-4247

John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com Fax: (416) 849-4555 E-mail: bob.grouchy@agr.allianz.ca Craig J. Walker, CIP, FCIAA, FIFAA Paul Hicks, FCIP, CRM Maltman Group International TD Insurance 3550 Victoria Park Ave., Suite 301 2161 Yonge Street, 4th Floor Toronto, ON M2H 2N5 Toronto, ON M4S 3A6 Phone: (416) 492-4411 Phone: (416) 486-2507 Fax: (416) 492-5657 Fax: (416) 545-6022 E-mail: cwalker@maltmans.com E-mail: Paul.Hicks@tdinsurance.com CIAA NATIONAL INSURANCE INDUSTRY ADVISORY BOARD Justin MacGregor Past President Patti M. Kernaghan, FCIP, CRM Insurance Brokers Association of Canada Kernaghan Adjusters Limited Phone : (416) 859-4567 300 - 1575 West Georgia Street Vancouver, BC V6G 2V3 Mark Stewardson, FCIP Phone: 1-800-387-5677 Royal & Sun Alliance Fax: 1-800-387-5644 2225 Erin Mills Parkway, Suite 1000 E-mail: Mississauga, ON L5K 2S9 pkernaghan@kernaghan.com Phone: (905) 403-2333 Fax: (905) 403-2326 Marie C. Gallagher, FCIP, CRM E-mail: Mark.Stewardson@ Granite Claims Solutions rsagroup.ca 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Mark Weir Phone: (905) 984-8282 Intact Financial Corporation Fax: (905) 984-8290 700 University Avenue, 13th Floor E-mail: marie.gallagher@graniteclaims.com Toronto, ON M5G 0A1 Phone: (416) 341-1464 Fax: (416) 217-0562 David Porter, LL.B., FCIP, CRM E-mail: mark.weir@intact.net Granite Claims Solutions 400 – 4370 Dominion Street Beth Bull Burnaby, BC V5G 4L7 ACE INA Insurance Phone: (604) 659-6559 1400 – 25 York Street Fax: (604) 659-6570 Toronto, ON M5J 2V5 E-mail: Phone: (416) 594-3067 david.porter@graniteclaims.com Fax: (416) 368-0641 E-mail: beth.bull@acegroup.com John D. Seyler, CIP ProFormance Group Inc. Alex Walker, CIP 5080 Timberlea Blvd., Suite 214 Royal & Sun Alliance Mississauga, ON L4W 4M2 2225 Erin Mills Parkway, Suite 1000 Phone: (905) 238-4985 Mississauga, ON L5K 2S9 Fax: (905) 238-2735 Phone: (905) 412-1397 E-mail: jseyler@prospecialty.ca Fax: (905) 403-2328 E-mail: Alex.Walker@rsagroup.ca Patricia M. Battle Canadian Independent Adjusters’ CAREER RECRUITMENT PLANNING Association/L’Association Richard Swierczynski, BA, CIP Canadienne des Experts AZ Claims Services Inc. Indépendants 1500 Upper Middle Rd., Unit #3, Centennial Centre, P.O. Box 76041 5401 Eglinton Ave. West, Suite 100 Oakville, ON L6M 3G3 Etobicoke, ON M9C 5K6 Phone: (905) 825-0027 Phone: (416) 621-6222 Fax: (905) 825-5543 Toll Free: 1-877-255-5589 E-mail: Richard@azclaims.ca Fax: (416) 621-7776 COMMUNICATIONS E-mail: pbattle@ciaa-adjusters.ca Richard Swierczynski, BA, CIP James B. Eso, CIP, CIOP AZ Claims Services Inc. Crawford & Company (Canada) Inc. 1500 Upper Middle Rd., Unit #3, 539 Riverbend Drive P.O. Box 76041 Kitchener, ON N2K 3S3 Oakville, ON L6M 3G3 Phone: (519) 578-5540 Phone: (905) 825-0027 Fax: (519) 578-2868 Fax: (905) 825-5543 E-mail: Jim.Eso@crawco.ca E-mail: Richard@azclaims.ca

John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com Fred R. Plant, AIIC Plant Hope Adjusters Ltd. 85 Englehart Street Dieppe, NB E1A 8K2 Ph: (506) 853-8500 Fax: (506) 853-8501 E-mail: fplant@planthope.com John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca CONSTITUTION & RULES John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com

DESIGNATION Paul W. Greening, CLA, FCIAA Greening Aviation Claims Inc. 26C Palliser Park, Box 190 Riverhurst, SK S0H 3P0 Phone: (306) 353-2000 Fax: (306) 353-2200 E-mail: pgreening@sasktel.net E. Brian Gough, FCIP, CLA, FCIAA Marsh Adjustment Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: ebgough@marshadj.com

Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca IBC: LIAISON, LEGISLATIVE & FORMS Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca LICENSING J. Miles O. Barber, B.Comm. (Hons.), FCIP, CRM Network Adjusters Ltd. 67 Folkestone Blvd.

Winnipeg, MB R3P 0B4 Phone: (204) 897-5793 Fax: (204) 897-5797 E-mail: mbarber@mts.net MEMBERSHIP & QUALIFICATIONS Georgiana Chen, CIP ProFormance Group Inc. 1101 Kingston Rd., Suite 280 Pickering, ON L1V 1B5 Phone: (877) 539-3111 Fax: (905) 554-3776 E-mail: gchen@proadjusting.ca NOMINATING John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca

Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 Robert V. Pearson, CLA, FCIAA St. Catharines, ON L2R 3H7 Hansen Labelle Adjusters Ltd. Phone: (905) 984-8282 1328 17th Avenue N.W. Fax: (905) 984-8290 Calgary, AB T2M 0R1 E-mail: Ph: (403) 284-2211 • Fax: (403) 284-2299 marie.gallagher@graniteclaims.com E-mail: bob@hansenlabelle.ca James B. Eso, CIP, CIOP EDITORIAL Crawford & Company (Canada) Inc. Mary Charman, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 1 – 120 Mulock Dr. Phone: (519) 578-5540 Newmarket, ON L3Y 7C5 Fax: (519) 578-2868 Phone: (905) 898-0008 E-mail: Jim.Eso@crawco.ca Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca Craig J. Walker, CIP, FCIAA, FIFAA John M. Sharoun, FCIP, FCIAA, CRM Maltman Group International Crawford & Company (Canada) Inc. 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 300 – 123 Front Street West Phone: (416) 492-4411 Toronto, ON M5J 2M2 Ph: (416) 867-1188 • Fax: (416) 867-1925 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com E-mail: John.Sharoun@crawco.ca EDUCATION Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA AMG Claims Inc. 535 North River Road, Unit 3 Charlottetown, PE C1E 1J6 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca

PRIVACY James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca

EMERGENCY MEASURES Richard Van Horne Action Investigations Inc. 2 Catelina Court Dartmouth, NS B2X 3G9 Phone: (902) 462- 1222 Fax: (902) 462-3688 E-mail: richardvanhorne@actioninvestigations.ca

Keith P. Edwards, FCILA, CLA, FUEDI-ELAE CIAA Honorary Life Member c/o CIAA National Office 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca

FINANCE Russell Fitzgerald, CIP Kernaghan Adjusters Limited 203 – 4246 97 Street N.W. Edmonton, AB T6E 5Z9 Phone: (780) 488-2371 Fax: (780) 488-0243 E-mail: rfitzgerald@kernaghan.com

PROFESSIONAL PRACTICES John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca

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Get to know your CIAA Executive – Ontario Region Dorothy Lowry, FCIP Dorothy Lowry works for Crawford & Company (Canada) Inc. and is the current Present on the Executive. With 37 years of experience in the industry she is an all lines licensed adjuster and handles a variety of claims with the majority focused on casualty losses. As the President she convenes and runs the executive meetings, participates in industry functions to promote and raise awareness of the CIAA; address inquiries and concerns of CIAA members; liaise with other industry associations to bring information to our members and participates on the CIAA National Executive. This is her 10th year on the Executive. Dorothy can be reached by phone at 705-7285597 or by email at Dorothy.lowry@crawco.ca.

Maria Joshua, BA, FCIP, CRM Maria Joshua is a Director, Claims at Sedgwick Claims Management Services Canada and is the 1ST Vice President on the Executive. She has been in the industry for 28 years and on the Executive for 5 years. She has previously held the position of the Membership Chair, Insurance Institute Chair and 2nd Vice President. At Sedgwick CMS she is responsible for the Canadian Operation and providing claims handling services for all Canadian clients. In the absence of the President, as the 1st Vice President she is responsible for chairing executive meetings, attend industry functions and liaise with other industry associations. Maria can be reached by phone at 416-695-5105 or by email at maria.joshua@sedgwickcms.ca.

Kelly Stevens, Hons BA, CIP, CRM Kelly Stevens works Crawford & Company (Canada) Inc. and is the 2ND Vice President and Education Chair on the Executive. She has been in the industry for 19 years and is an Assistant Branch Manager involved with business development and is responsible for managing a team of adjusters specializing in Accident Benefit and Bodily Injury claims. As the 2nd Vice President Kelly shall act as the President’s representative at Executive meetings and industry functions in the absence of the President and 1st Vice President.

As the Education Chair she organizes an annual Spring Educational seminar for our members and has been on the Executive for 5 years. Kelly can be reached by phone at 905-206-5414 or by email at Kelly.stevens@crawco.ca.

Georgiana Chen, CIP Georgiana Chen is the Director of Marketing at ProFormance Group and is the Secretary, Editorial Chair and Convention Chair on the Executive. As the Director of Marketing Georgiana is responsible for directing overall marketing and strategic planning programs for both ProFormance Adjusting Solutions and ProFormance Specialty Claims. She has been in the industry for 19 years and on the executive for 3 years. As the Secretary, she is responsible for

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keeping proper records and minutes of the Executive Committee meetings. As the Editorial Chair she is responsible for the acquisition of suitable editorial for the Association’s magazine and as the Convention Chair, she is responsible for organizing the Ontario region’s Annual General Meeting weekend retreat. Georgiana also holds the Membership Chair position on the National Executive of the CIAA. Georgiana can be reached by phone at 905-4203111 or by email at gchen@proadjusting.ca.

Niki McConnell B.A.(Hons), CIP, CRM Niki McConnell is a Senior Adjuster at ProFormance Group and the current Treasurer and Sick & Vigil Chair on the Executive. Having been in the industry for 15 years, Niki handles a variety of claims including accident benefits and bodily injury claims along with specializing in the handling of mediations. This is Niki’s 3rd year on the Executive. As the Treasurer she has custody of the funds and securities for the Region and is responsible for keeping accurate accounts of receipts & disbursements in books belonging to the Regional Committee.

As the Sick & Vigil Chair she sends cards to members on behalf of the Association acknowledging various events such as retirement, illnesses, death etc. Niki can be reached by phone at 905-2382735 or by email at nmcconnell@proadjusting.ca.

David K. Marshall David Marshall is the Branch Manager of the Sault Ste. Marie office and a member of the Global Technical Service Division of Crawford & Company (Canada). He is responsible for managing the branch and is also an all lines licensed General Adjuster. He is the Northern Director and is responsible for the monitoring of claims activity within the northern region as well as promoting the Association to its members within that region. He has been in the industry for over 37 years and on the Executive for over 6 years. David can be reached by phone at 705-942-1300 or by email at david. marshall@crawco.ca.

Carolyn Tweedie, BA, CIP Carolyn Tweedie works for Granite Claims Solutions as a Senior Adjuster. She has 18 years of experience in the industry and is currently an all lines licensed adjuster specializing in Accident Benefits and Bodily Injury Auto claims in the London, Ontario Branch. She is the Southwestern Ontario Director and is responsible for the monitoring of claims activity within the southwestern region and to promote the Association to its members within that region. She has been on the Executive for 2 years. Carolyn can be reached at Granite Claims Solution at 519-858-8888 or by email at Carolyn.tweedie@ graniteclaims.com.

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David Cernak David Cernak, President and Operations Manager of PCA Adjusters is the current Eastern Region Director on the Executive. As President of PCA Adjusters, he works with his team of adjusters in the company’s multiple branch locations throughout the Eastern Region of Ontario. As the Eastern Region Director he is responsible for the monitoring of claims activity within the eastern region as well as promoting the Association to its members within that region. He has been in the industry for 34 years and 4 years on the Executive.

David can be reached by phone at 613-726-9556 or by email at davidc@pca-adj.com.

G. Anthony Magagna, BA, CIP, CRM, CHSO G. Anthony Magana, Partner and Executive Adjuster of Picano & Partners Claims and Risk Services and is a co-chair for Licensing on the Executive. As a Partner and Executive Adjuster at Picano & Partners, Anthony handles casualty and commercial liability claims and manages the business development portfolio and risk management services. He has been in the industry for 20 years and this is Anthony’s 1st year on the Executive. On the Executive he responsible for the monitoring of the monthly oral examinations for acquiring independent adjusting licenses. Anthony can be reached by phone at 416-894-1444 or by email at amagagna@picanoandpartners.com

Leslie J. Guerette Leslie J. Guerette is an Accident Benefit Adjuster at Cunningham Lindsay. She specializes in auto accident benefits, bodily injury claims and loss transfer claims. She is the current Central Director on the Executive and is responsible for the monitoring of claims activity within the central region as well as promoting the Association to its members within that region. She has been in the industry for 20 years and this is her 1st year on the Executive. Leslie can be reached at 705728-8398 or by email at lguerette@cl-na.com.

Trevor Cortese Trevor Cortese is the President of TC Insurance Adjusters Ltd. And PRM Claims Services managing a team of 9 staff and is involved with the handling of claims in all lines. He has been in the industry for 23 years and this is his 2nd year on the Executive holding the position of the Membership Chair. As the Membership Chair, Trevor is responsible for reviewing all incoming membership applications to ensure good standing with FSCO and makes recommendations to the Executive on such applications. Trevor can be reached by phone by 519-663-0700 or by email at tc@tcia.ca.

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Edgar Lethbridge Edgar Lethbridge is the President of Lethbridge Adjusting Ltd. Specializing in property, liability and subrogation claims. Edgar has been in the industry for over 50 years and on the Executive for 10 years. He is the Licensing Chair on the Executive responsible for the monitoring of the monthly oral examinations for acquiring independent adjusting licenses. Edgar can be reached at 905-275-4904 or by email at adjelvl@primus.ca.

Darcy Anderson, BA, FCIP Darcy Anderson is a casualty field adjuster at Crawford & Company (Canada) handling both commercial and personal lines of insurance claims and has been in the industry for 15 years. He is new to the Executive and is the Insurance Institute Chair. As the Insurance Institute Chair he acts as a liaison between the Insurance Institute and the CIAA to keep both organizations appraised of new developments and addresses concerns raised by stakeholders. Darcy can be reached at 905-898-0008 or by email at darcy.anderson@ crawco.ca.

Teresa Mitchell, FCIP, CRM, FCLA, FCIAA, FIFAA Teresa Mitchell is an all lines Senior General Adjuster specializing in medical malpractice claims in the Global Technical Services division of Crawford & Company (Canada) Inc. She is the Executive’s immediate Past President and Professional Standards Chair responsible for addressing and resolving any complaints received against either an individual member or an Ontario member firm. She has been in the industry for 29 years and has been involved with the executive for 21 years holding various positions. Teri can be reached at Crawford & Company at 705-728-5597 or by email at Teresa.Mitchell@ crawco.ca.

Richard Swierczynski, BA, CIP Richard Swierczynski is the President of AZ Claims Services Inc. He specializes in the handling of complex insurance claims relating to the trucking and transportation industry in general. He is a member of the CIAA/CICMA Joint Conference planning committee which organizes an annual conference for both CIAA and CICMA members. He is also an Ambassador for the Insurance Institute’s Career Connections program and is the current Career Recruitment Chair on the CIAA National Executive. He has been in the industry for 22 years and 14 years on the Executive. Richard can be reached by phone at 905-825-0027 or by email at richard@azclaims.ca.

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14-04-21 1:36 PM

Pilot Rescue

A humble and reluctant hero saves lives after a floatplane flips over in Northern Manitoba.

BY PAUL W. GREENING

I

t was a typical September day on the isolated northern lake where icy winds and dropping temperatures were warning of weather to come. Father, son and grandson were busy packing up their fishing camp ready to make the flight back to their home community.

While waiting patiently for the Beaver aircraft to pick them up, the winds became increasingly strong and father and

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son were becoming anxious the aircraft would be unable to land. Relief wasn’t long in coming as the float-equipped Beaver successfully touched down on the lake and effortlessly taxied over to the camp.

The pilot scampered out and greeted his passengers while tying up to the dock.

This would be a light and easy flight back.

As the lightly loaded plane taxied downwind to ensure sufficient takeoff

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distance, the pilot kicked over the water rudders and the ailerons in preparation for a 180 degree turn into the wind.

In that split second, almost too short to measure, an angry gust of wind flipped the Beaver aircraft, its pilot, passengers and cargo upside down.

The process of the impossible happening is difficult to grasp in that split second. Thankfully, the experienced pilot, who exhibited little panic, was able to instruct the passengers to successfully exit.

Exiting, in this case, led them to the fuselage and the floats – the fuselage for standing and the floats for hanging on!

The aircraft finally settled into a resting position and it became very apparent to the well-soaked foursome that the water temperature did not feel much different than the frigid blowing winds.

Drifting at the mercy of the wind, they could only hope they would be pushed to the shoreline. A sickening thud told them that was not to be as they rammed into a mid lake reef. They were stuck! The only way to get to shore now was to swim. In the confusion of the speedy exit, life pre-

servers were still underneath the capsized aircraft, and panic rose as the aircraft continued to bounce on the rocks with the wind.

Would anyone see them? How long could they hang on? Would help be able to arrive soon? The pilot realized that time

Because the pilot had followed proper company procedures, when he didn’t show up at his expected arrival time, a single float Otter was sent out to look for him and his aircraft. was not on their side as the effects of hypothermia would not take long to set in.

Suddenly, out of nowhere, a life preserver appeared on the water. Putting his fears aside and realizing that someone had to do something or they would all

succumb, the pilot clumsily put on the life preserver, inflated it and headed to shore in an awkward paddle motion.

He spotted some overturned fishing boats not too far from an old fishing cabin so he headed in that direction. He managed to reach one of them, all the while, feeling colder and less able to maneuver.

It did not take him long to realize he did not have sufficient strength to turn over the boat – he HAD to warm up before he could do any more to help his passengers.

He swam ashore to the fishing cabin.

Luckily, wood and kindling had been left inside, along with matches. The pilot was able to start a fire in the wood stove, calm himself and slowly warm his body.

He gathered his strength enough to head back out, turn over a boat and begin paddling back to his water logged passengers.

Again, the winds were working against him and blowing him right past the aircraft. Paddling back to shore, he realized it was hopeless unless he could position himself such that the winds would work with him and not against him.

Father, son and grandson were becoming painfully aware that things were not

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14-04-21 1:39 PM

going well. Hypothermia was beginning to set in and the shaking was becoming uncontrollable. Panic was growing as they hung on – the temperature seemed to be dropping rapidly.

Meanwhile, the pilot, dragging the boat, had trudged up the shoreline to find the right position to head back out.

In what seemed like an eternity to all of them, he finally succeeded in paddling the boat close enough to the aircraft to allow the passengers to climb on the

boat. Relief to be in the boat was brief, as they still had to get to shore and not one of them had much strength left to give. The adrenalin kicked in and thankfully, they made it to shore and the fishing cabin.

A proper fire was kindled in the cook stove – the pilot, in his earlier confusion, had started his fire in the oven of the cook stove, rather than the burning area.

They laughed nervously at this as they huddled together and warmth returned

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to their bodies. It was official – they were safe and alive.

Again, because the pilot had followed proper company procedures, when he didn’t show up at his expected arrival time, a single float Otter was sent out to look for him and his aircraft. The Otter pilot spotted the submerged Beaver, safely landed on the water, and managed to safely load and return the exhausted men to the home community.

At the very first meeting the adjuster had with the survivors and their family, there was a remarkable outpouring of gratitude towards the pilot. This family had previously lost two members to an icy northern lake and their feelings were heartfelt.

The family asked the adjuster to take this message to the pilot. Their gratitude was overwhelming, even for the adjuster, and it was clear they wanted to meet the pilot and bring him back to the community. They wanted to not only thank him personally, but to have a community tribute to honour his bravery.

The pilot humbly accepted the relayed thank you, but was very clear in that he did not feel he needed to return to the community to be honoured. His shy and quiet personality did not reflect the role of a “hero” and, while he appreciated the gesture, just didn’t feel comfortable at being the centre of all the fuss. Naturally, the family was very disappointed and asked the adjuster to try again – to make all attempts possible to have the pilot return to the community.

This adjuster is happy to report the family got their way. Someone had to fly up the settlement replaced equipment and personal belongings to the three passengers. After numerous discussions, he managed to convince the pilot to accompany him back to the community with the goods.

Father, son, grandson and other family members met them at the airport. Each person individually expressed their appreciation to the pilot and presented him with a small gift of religious significance.

He was an absolute hero for saving three members of their family.

You may want to call it gratitude of epic proportions, emotions and tears for their reluctant and humble hero, a Beaver pilot.  Paul W. Greening, CLA, FCIAA, is president of Greening Aviation Claims Inc.

www.claimscanada.ca

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14-04-16 3:16 PM

Breaking Bad

How clean is “clean” when it comes to property damage and the health side effects associated with illicit meth labs?

BY KIRSTEN HOEDLMOSER

The federal government estimates that between 560 and 1,400 clandestine amphetamine synthesis operations exist across Canada. These ‘labs’ can produce a variety of illicit substances in the amphetamine family including methamphetamine or ecstasy/MDMA, and have been discovered both in urban and rural settings. While insurers and adjusters have become more aware of residential marijuana ‘grow ops,’ little attention, so far, has been paid to meth labs.

In July 2013, Ontario Police discovered and seized $40-million worth of methamphetamines (meth) in three separate labs. The health effects of the drug on its users are generally well understood and a large portion of the general public is already aware of the damaging impact of meth use.

One aspect of meth production often overlooked, however, is the property damage caused by these clandestine operations and the potential harm to the health of individuals who occupy a former meth lab.

These concerns are very real. Short-term health problems attributable to exposure to the latent products of chemical synthesis have been well-documented and include headaches, nausea, respiratory difficulties, skin irritations and burns. Severe health problems in infants and children exposed to even trace amounts of chemical residues are well documented. Children are especially vulnerable to these impacts due to their frequent hand-to-mouth behaviour.

While long-term effects are not yet well understood, studies suggest that chemicals within meth and within the precursor chemicals used to synthesize such drugs may cause cancer in humans.

Synthesizing, or ‘cooking’, meth involves combining many precursor chemicals including acetone, insecticides, and pseudoephedrine. The specific chemicals used vary according to the cooking method. Regardless of the method used, the act of cooking meth releases potentially toxic chemicals that can migrate far beyond the immediate cook32 Claims Canada

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ing area within a building, contaminating walls, carpet, curtains, furniture, plumbing, ducting, and the air itself. A property used as a lab can essentially be considered a hazardous waste site, with impacts even extending outdoors if chemicals or by-products were dumped on the surrounding ground surfaces.

Within the building, porous materials such as fabrics and carpet can easily be removed during remediation of a meth lab. But how does a building owner know that the non-porous surfaces have been adequately cleaned? How does the future occupant know that they won’t be breathing toxic air within the building or come into contact with residual surface contaminants? Cleaning and remediation procedures for the restoration of properties used as meth labs are relatively consistent between guideline documents; however, the acceptable post-remediation clearance limit for residual meth surface concentrations vary widely amongst current standards.

Within Canada, few guidelines exist for the remediation of buildings used for the synthesis of illegal substances. Unfortunately, this leaves both environmental consultants and remediation contractors in a regulatory void where the application of inappropriate or inadequate remediation and clearance standards can have significant impacts on human health. Though the Canadian National Collaborating Centre for Environmental Health has produced a set of remediation guidelines derived from instructions and regulations within the United States, Australia, and New Zealand, there are no quantitative limits definitively stating acceptable post-remediation conditions.

In the absence of defined clearance criteria, we may look to American state legislature, as well as further abroad, for guidance in these matters. In The United States, no formal federal regulations exist governing the remediation of meth labs. Rather, regulations are developed and implemented by individual states. The Environmental Protection Agency (EPA) has a set of voluntary guidelines for meth lab remediation, which includes conducting pre-remediation surface www.claimscanada.ca

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sampling to determine the extent of the chemical contami- classified as alkaline (i.e. has a pH greater than 7), and thus nation, the sequence of remediation steps, best practices for sampling on concrete may in some cases give a falsely high remediating certain building finishes, and post-remedia- pH reading during clearance sampling. tion sampling to confirm that the chemical contaminants To further complicate matters, certain states sometimes have been successfully removed. include guidelines or legislation regarding sampling for This EPA guideline acknowledges that as of 2009, 22 specific chemicals which may be present as a result of the states require or recommend specific quantitative meth cooking method employed within the lab. Colorado, for remediation standards. These standards for acceptable example, requires clearance testing for iodine, as well as meth surface concentrations range from 0.05 ug/100 cm2 lead on surfaces and/or in the air depending on the cooking to 1.5 ug/100 cm2, with the most common limit being method used Minnesota requires sampling for lead but also requires sampling for mercury. Each 0.1 ug/100 cm2. This guideline does state has differing acceptable concennot, however, provide direction on tration limits. whether any of these state-legislated As the outcome of the post-remelimits should be altered to be any diation clearance sampling can be more or less stringent. greatly affected by the sampling locaIt is important to note that the EPA tions chosen, it is crucial for an unguidelines acknowledge that these biased party to conduct the sampling state-specific limits are determined to remove the risk of a biased assesaccording to laboratory detection limsor selecting locations that are more its, not health-based criteria. That is likely to yield a ‘pass’ than others. to say, these standards are conservaPost-remediation clearance sampling tive limits that should account for the can be done by collecting samples analytical uncertainty of remediating from random locations throughout a meth lab where the sampling locathe building, or alternatively by samtion can have a significant impact on pling in the location most likely to the analytical results returned. have the highest chemical contamiQuantitative standards have been nation levels (i.e. the most difficult developed by many states for evaluatto clean area, or the area where the ing other contaminants of concern ascooking took place). In this case, a sociated with a clandestine meth lab, third party may be useful in inspectand, to further complicate the issue, ing the work area. sampling for these contaminants may When remediating When remediating a building used depend on what meth cooking method a building used as a as a meth lab, it is crucial to evaluate was used within the lab. These stanwhat standards should be used to endards apply to volatile organic commeth lab, it is crucial sure the building is safe for future ocpound (VOC) concentrations in air, to evaluate what cupants, while also controlling remecorrosives, lead, mercury, and iodine, diation costs. among others. Much like the stanstandards should be In the absence of Canadian federal dards for surface meth concentration, used to ensure the or provincial legislation in this area, the quantitative limits vary widely by building is safe for a qualified and experienced consulstate. tant, public health official, and/or Depending on the limit used, a future occupants, hygienist should provide guidance to photoionization detector, commonly while also controlling the cleaning and remedial contracknown as a PID, can determine if an remediation costs. tor. This will ensure that the buildacceptable concentration has been ing can be confirmed as safe for reachieved within the ambient air. Use occupancy and that the proper range of this device can help in avoiding further analytical costs in determining if a former meth lab has of both surface residual and airborne contaminants are been appropriately remediated. However, such a device is considered. Although such a diverse, and at times conunable to identify what specific chemical constituents exist f licting, range of regulatory guidelines exist, leaders in in the air and in what quantities. In some situations, a PID this industry must rise to the challenge to protect public screening may not be sufficient for assessing the air quality health and safety. î — of the building.

Many states have set an acceptable surface pH range of Kirsten Hoedlmoser is a Chemical and Environmental Enbetween 6 and 8, pH being a measure of corrosiveness.5 gineer-In-Training at Giffin Koerth Forensic Engineering. She Care must be taken to determine whether the sampling sur- specializes in complex site assessment and remedial projects face itself is inherently corrosive. For example, concrete is involving all forms of contamination. www.claimscanada.ca

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Whole Hog Quantifying economic damage for livestock losses, such as hog farms, presents challenges for adjusters.

BY CALA MITRA

Damage quantification for livestock losses can be difficult for adjusters and claims professionals. It often requires consideration of market price fluctuations, age and weight of livestock at the time of loss. It also involves understanding the end purpose of the livestock – whether they are for breeding or market purposes.

The livestock industry is big business.

According to the Canadian Meat Council, for example, Canada exported more than $3 billion of pork to 97 countries in 2012.

Canadian hog output (domestic slaughter plus live exports) was estimated at 21.1 million head in the same year.

Hog losses in particular have many special considerations that need to be thought through to accurately assess the economic impact of an incident.

duction; farrowing, weaner and finishing.

The first stage is the farrowing stage; this is where the sows give birth to the piglets.

Sows typically have 8 to 12 piglets per litter and have between two and three litters per year as the time between farrowing is approximately 150 days.

At the age of 3 weeks and at approximately 7kg the piglets are weaned and moved into a weaner barn. Here the weaners are raised until they are 12 weeks old and approximately 37 kg.

At the age of 12 weeks the weaners are big enough to join the general population and are moved to a growing/finishing barn. At this point they are referred to as gilts and barrows. The gilts and barrows remain in the finishing barn until they reach market weight which is approximately 100 to 110kg. This occurs when the pigs are around six months of age.

Common Terms

Hog farm losses can occur at all stages of the growing cycle and each has its own considerations.

Farrowing. In the case of a farrowing barn loss, the farmer has lost the ability to produce new hogs. If the farm operated solely as a farrowing barn, the production loss is noticeable immediately as the farmer would not have any income from the sale of the piglets. However, if the farm is a multi-stage farm and operated from farrow to weaner or farrow to finish, the farmer does not have an immediate drop in income as the weaner and finishing barns would continue to operate and

The following are common terms that one needs to understand in order to quantify a hog farm loss: • Sows – Female pigs used for breeding • Piglet – Newborn Pigs • Weaners – Pig 3 to 12 weeks old • Gilt – Young female pig • Barrow – Neutered male pig • Boar – Full grown intact male pig • Farrow – To give birth • Finish – To grow a hog to market weight Hog farm operations are generally segregated into three separate stages of pro34 Claims Canada

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Loss Types

sell the stock that was in the unaffected barns.

Weaner. Similar to a single stage farrowing barn loss, if the farmer operates a single stage weaner farm, a loss will immediately impact the farmer’s ability to earn revenue.

In these cases the farmer may choose to rent out temporary facilities to continue to operate the weaner barn, although this is not always possible. If the farmer operates a multi-stage hog operation a loss at the weaner stage results in the farmer not being able to grow his own stock. In this case, it is likely that the farmer will attempt to outsource the weaner growing stage to minimize the impact of any loss on revenue.

Finishing. A loss at the finishing stage immediately impacts the farmer’s ability to earn revenue regardless of whether the farmer has a multi-stage operation or solely operates a finishing barn.

Loss Calculation In all cases, the losses incurred will include both the profit loss from the deceased hog(s), as well as the value of the actual animal (inventory/stock loss).

In terms of hog inventor/stock loss, for a farrowing loss, the calculation typically considers the value of the sows lost along with a relatively nominal value for the piglets lost. In a weaner and finishing loss, the weight of the hog is considered as the hogs are considered to be sold on the day of loss.

Market pricing is usually available through various livestock exchanges or the Pork Producers of Ontario website. www.claimscanada.ca

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In terms of profit loss calculation approaches, the first step in calculating a hog farm income loss is to understand how the farm operates, either single stage or multi stage farming.

Single Stage Farming Farrowing. If the loss occurs at the farrowing stage, the first consideration is to project how many piglets would have been born had the loss not occurred. Information from the farmer should allow for a calculation of average piglets per sow as well as the typical mortality rate among the piglets as this information must also be considered.

If the farm is strictly a farrowing operation, the piglets are sold at 3 weeks old when they become weaners. The farmer should be able to provide sales invoices for pre-loss litters. This will help establish the price typically received by the farmer and should also support the number of piglets calculated.

Weaner. Weaner farms tend to operate in an all-in/all-out fashion, meaning that a full group of weaners is brought in at one time and raised to 37kg, and then all are sold to the finishing barn at the same time.

This allows for proper decontamination of the facility between groups. Therefore, a loss in a single stage weaner farm is relatively straight forward.

The first step is to understand how many groups of weaners the farmer raised each year and how many weaners were in a group. Considering weaner age is from 3 to 12 weeks, a farm would have 4 to 5 groups a year, depending on the length of the decontamination stage. The farmer will have this information available from a historical perspective.

Finishing. The first step in calculating a finishing barn loss is to understand trending in that hog operation (i.e. how many times the barn turned over in a year, what is the average sales weight, is the barn usually kept at full capacity, average daily weight gain, etc.). Typically a review of pre-loss purchase and sales invoices is needed to determine the number of hogs bought and sold. This will also establish the sale weight.

Using the pre-loss sales invoices, the number of hogs sold every week or month is determined as well as the average sales weight. Utilizing the applicable market price, the sales projections can be established.

result in the income loss calculation being delayed as the income stream expected from the hogs would not be affected immediately. Similar to single stage finishing losses, multi-stage losses that occur at the finishing stage result in an immediate income loss.

Quantifying economic damage in a hog farm loss has many aspects that must be considered when preparing the calculations.

As with other types of losses, non-operational hog farms will experience a savings in variable expenses when compared to an operational hog farm. Review of the pre-loss monthly profit and loss statements compared to the post-loss profit and loss statements provides detailed information on what expenses discontinued during the loss. Typically in a hog farm the variable expenses will include veterinary, feed, bedding and labour. In addition, in single stage hog farming, weaner and finishing hog farms will realize a significant savings absent the need to purchase stock.

Quantifying economic damage in a hog farm loss has many aspects that must be considered when preparing the calculations. Attention to detail and an understanding of the operations are crucial to the accuracy of the end report. 

The difference with a multi-stage finishing loss is that the farmer can sell the weaners produced to other finishing barns and thus recoup some of the profits the farmer would have earned had the farm operator finished the hogs.

Cala Mitra is a manager with Matson, Driscoll & Damico Ltd. (MDD) in London, Ontario. Cala has been involved in a wide variety of agriculture, commercial insurance and litigation matters. She can be reached at cmitra@mdd.com.

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Insurance Blogs hosted by Canadian Underwriter Insurance Blogs hosted by Canadian Underwriter In the case of a multi-stage farm, losses

Multi Stage Farming

at both the farrowing and weaner stage www.claimscanada.ca

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Addressing E&O Exposures

How adjusters can avoid the squeeze of professional liability claims.

BY LEE AKAZAKI

The embattled independent adjusting profession has never faced so much scrutiny; yet at the same time pressure builds for adjusters to deliver results while making do with less. This can lead to professional liability claims.

Fortunately, the industry can train adjusters to employ practices to reduce the risk. Adjusters and their errors and omissions (E&O) insurers should also be aware of effective strategies to defend such claims.

The Adjuster as Professional Representative In most instances, the independent adjuster owes a duty to the insurer who employs him or her as agent, not to the insured. Some legal authorities have held that the adjuster owes no duty of care to the insured. An insured aggrieved by an adjuster’s decision might have recourse against the insurer in vicarious liability, but not against the adjuster: Abbasi v. The Portage La Prairie Mutual Insurance Company, 2003 ABQB 760 (Alta. Q.B.).

The ethical lines glow brighter when the insurer countermands the adjuster’s recommendations. It is perfectly acceptable for an insurer to go against an adjuster’s recommendation, and for the adjuster to follow those instructions – if the instructions themselves are defensible. What if the insurer were to apply pressure on an adjuster to cut down the payment or to find ways of denying coverage, without sufficient justification?

The CIAA’s Code of Ethics for Insurance Adjusters provides: “Policyholders and claimants are entitled to receive courteous, fair and objective treatment at all times.” Does this voluntary code create a duty of care to the insured? A professional agent is expected to act ethically, but the actual duty to the insured is owed by the insurer.

The Supreme Court of Canada implicitly described the independence of the insurance adjuster from the insurer’s client by upholding the conduct of the adjuster while maintaining the judgment against the insurer in Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595: “The problem here is that Pilot embarked on a ‘train of thought’ as early as February 25, 1994 … that led to the arson trial, with nothing to go on except the fact that 36 Claims Canada

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its policyholder had money problems … The ‘train of thought’ mentioned in the letter to Pilot from [adjuster] Derek Francis kept going long after the requirements of due diligence or prudent practice had been exhausted.

There is a difference between due diligence and wilful tunnel vision.”

The obligation of “courteous, fair and objective treatment” to the insured should not translate into a direct duty of care, provided the adjuster acts within the bounds of employment by the insurer.

The principle that independent adjusters owe no duty of care to insureds can erode if an adjuster creates an expectation of loyalty. In Wigmore v. Canadian Surety Company (1994 CarswellSask 247), the insured testified the adjuster “was our agent” and that “he was trying hard to get money for us.” The adjuster said he was independent of the insurer and “therefore someone they [the Wigmores] could look to for advice and assistance.” By misunderstanding his role, the adjuster imposed a duty on himself. Wigmore is a cautionary tale.

The following practices may help to avoid unnecessary E&O claims.

Clarify insureds’ expectations. The popular “you’re in good hands” marketing by insurance companies means insureds expect insurers to look after them after a loss. The emotional vulnerability in the aftermath of a loss can cause the insured to transfer the “good hands” expectation to the adjuster. If a dispute over coverage or quantum surfaces, the insured might then expect an adjuster to advocate on his or her behalf. This is the time to set out the ground rules.

Objectively document all interactions with insureds contemporaneously. Avoid saying anything in your notes you could later live to regret. “Without Prejudice ”is a term that will not protect you. The insurer must evaluate a claim fairly and open-mindedly, despite any suspicions during the course of the investigation: General Accident Assurance www.claimscanada.ca

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Company v. Chrusz, 1999 CanLII 7320 (ON CA).

Scrutinize instructions from insurer carefully. If you receive instructions that require you or the insurer to breach a contractual duty to the policyholder or otherwise act unethically, you must advise the insurer, in writing, to reconsider the instructions. If the instructions are not withdrawn, you may have to withdraw from handling the claim.

loss. The adjuster can retain an engineer to examine a building (i.e. structural soundness) and make recommendations.

Errors made by the engineer do not become errors of the adjuster.

If one were to employ a paint-by-numbers approach, the insured’s counsel might launch a suit against the adjuster.

However, a well-documented report outlining the decision to employ the engineer, combined with instructions from Strategies for Defending E&O Claims the insurer, will help adjuster fend off an E&O claim lackIf a claim dispute arises, the key is to understand the ing in merit. critical “who the adjuster is” and “what the adjuster does” Strategy #4: Avoiding the Limitations Squeeze issues. The following strategies illustrate approaches to poThere is a widely held misconception that delivering suptential adjuster E&O claims. porting documents for a damage claim will suspend statutes Strategy #1: Setting the Record Straight Regarding the Ad- of limitation. Limitation periods stop running when one juster’s Role commences legal proceedings, or in limited circumstances Members of the general public may lack knowledge of an by agreements, mediations or waivers. Sending a pile of reindependent adjuster’s role. Some believe insurance adjust- ceipts or a loss schedule will not do this. Failure to underers are like ombudsmen and represent the insured to the in- stand how statutes of limitation operate can lead to trouble. surer. On the skeptical side, some view the adjuster’s role as For example, close to the expiry of a limitation period getting the insurer out of paying a claim. Neither is fair. As under a fire insurance policy, the insured submits receipts a professional whose loyalty rests with the insurer, the ad- and invoices. The insured asks the adjuster, “Do I need to juster neither extends nor curtails the see a lawyer or start legal proceedinsurer’s contractual obligation to pay. ings?” The adjuster says no, and advisParties often focus solely on the es the insured the insurer will pay, subevents and transactions at the time ject to the adequacy of the documents. the claim took a bad turn. In an acThe limitation period expires, and the tion brought by an insured against an insurer declines liability because no adjuster (as part of a claim against an statement of claim was filed in court in Limitation periods stop insurer), it is also important to comb time. The insured interprets the adjustthrough all of the communications beer’s answer to the question as a waiver running when one tween adjuster and insured. of the limitation period. The insurer commences legal says it never authorized the adjuster to Strategy #2: Causation and Damproceedings, do so. The adjuster is squeezed in the ages middle. or in limited The soft underbelly of many claims circumstances by for professional liability is causation.

There are three ways to avoid It’s not easy to prove that an error or the squeeze: agreements, omission caused actual harm. If the 1. advise the other side (in writing) mediations or waivers. insurer has not paid, there has not yet to start a legal proceeding if they inbeen an adverse and final outcome. tend to continue the claim beyond the limitation period; Insurers rarely come after adjusters for an excessive 2. if common sense dictates that legal proceedings be avoidpayment to an insured. The critical path of a claim simply ed, get instructions from the insurer to waive or suspend causes any litigating energy to dissipate. You will, however, the operation of the limitation period while the claim is see insurers bring claims against adjusters more often if the being settled; insurers themselves are sued. If the insured was undercom- 3. if the claim is not settled, notify the insured or claimant pensated, the court will determine the “right” amount and that the limitation period will start from the point where order the insurer to pay the difference between what it paid it was suspended.  and owed. Within the mechanism of this dispute, there are no damages related to the handling of the claim – the causaR. Lee Akazaki, C.S., Partner at Gilbertson Davis Emerson tion element against the adjuster is missing.

LLP, Board Member of Canadian Defence Lawyers (CDL), Strategy #3: Breach of Standard of Care v. Error of Judg- Past-President of the Ontario Bar Association, is a lawyer ment practicing in commercial litigation, insurance law and profesConsequential loss does not necessarily mean the ad- sional ethics and responsibility. CDL is the only national orgajuster is liable for the loss, any more than standing next to a nization representing the interests of civil defence lawyers. It disaster caused it to happen. Errors in judgment tend to be offers broad opportunities to unite the defence bar over comnot actionable. Take the instance where consequential harm mon issues, as well as providing accredited continuing legal arises from a perceived attempt to save money on a property education. www.claimscanada.ca

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EF

• education forum

A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA

Harnessing Internal Resources I

n the last issue of Claims Canada, Education Forum looked at how to analyze a firm’s external environment to identify risks and opportunities. In this issue, we take a closer look at the firm’s internal environment: the qualities an adjusting business can build on for success.

Although adjusting firms as a group often face similar pressures and constraints from the external environment, each firm also has its own unique attributes. Over time, differences in these attributes can be a source of sustained competitive advantage.

Strategy theorists distinguish between three levels of firm attributes: resources, capabilities and core competencies. In a competitive market, the key to coming out on top is to develop or acquire resources and capabilities that are difficult or impossible for rivals to imitate. These core competencies can allow an adjusting firm to provide more value to its stakeholders than competitors do.

Resources Resources can be tangible or intangible. Tangible resources are things that can be seen or quantified: financial resources; organizational resources such as coordinating and reporting systems; physical resources such as office equipment; and technological resources such as claims management 38 Claims Canada

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systems. The value of most of your firm’s tangible resources can likely be determined from the financial statements.

Intangible resources are less obvious and are harder for other organizations to analyze and imitate. They include staff strengths, innovation resources (such as ideas or techniques) and reputational resources. Intangible resources tend to be embedded within the patterns and routines of the organization. Although they are difficult to quantify, their value can be deliberately increased. For example, the larger the network of employees who have access to an innovative technique, the greater the potential value of that technique to the firm.

Capabilities A “capability” is a task or activity a firm undertakes that involves an integrated set of the firm’s resources.

Many capabilities are linked to specific functional areas, such as processing a particular kind of claim. Others may be client-specific. Capabilities tend to be rooted in the skills and knowledge of employees, and they tend to evolve over time.

Core competencies A “core competency” is a capability that has become a source of competitive advantage – something that a firm

does particularly well compared with its competitors. Core competencies are ones that meet four criteria, collectively termed the VRIO test: • Valuable – They add value by enabling the firm to exploit opportunities or reduce threats.

• Rare – They are capabilities that few or no current competitors have. costly to Imitate – They were developed under unique circumstances or through complex social processes (such as the collective strengths of a specialist team).

• Organized to be exploited – The firm has supportive structures and systems in place to make the most of these strengths.

Competitive Advantage at a glance • Relative and hard to achieve • Rooted in resources, capabilities and competencies that are changeable and often intangible • Erodes over time and needs renewal – what’s core today may not be tomorrow • Requires assessing where value truly lies and how it is created

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Value in services is measured by attributes for which clients are willing to pay – for example, specialized claims investigation skills for marine losses.

Service value is relative: competitive advantage results only when a firm’s services provide more value than those of its competitors.

Core competencies also help the firm to exploit opportunities or reduce threats. For example, a core competency in technology could help an independent adjusting firm to move into an emerging field like handling identity theft claims.

The value, rarity and imitability of a competency can change over the time. Any competency can become a limitation if the firm continues to base strategy on it when it is no longer truly core. The trick is to manage current core competencies while also developing new ones.

Value chain analysis Another tool for assessing internal strengths is value chain analysis, which can help a firm identify which activities represent net sources of value or cost.

This in turn allows the firm’s management to decide which competencies the firm should develop, maintain or outsource.

A “value chain” is a sequence of business activities, each of which potentially has a cost and a value for the firm. To do a value chain analysis, you

SWOT Analysis Strengths Your firm’s resources, capabilities, core competencies (ones that meet the VRIO test and add net value)

Weaknesses Gaps in resources and capabilities; obsolete competencies

Opportunities E.g., from PEST analysis – opportunities arising from the political, economic, social, technological environment

Threats E.g., from PEST analysis – threats arising from the political, economic, social, technological environment

Strategic Fit Does your firm’s strategy fit its SWOT situation?

would separate out your firm’s activities – both primary activities such as field investigation and support activities such as HR – and examine each one to determine what it costs your firm and what value it generates. If the cost of an activity is greater than the value it generates, the activity is not a source of competitive advantage.

For example, larger adjusting firms may choose to outsource payroll processing because the activity incurs a net cost and is not a core competency. A specialist payroll processing supplier can perform the activity more efficiently.

organization’s strengths and weaknesses against the opportunities and threats in its external environment can help you and your team select appropriate strategies.

Opportunities and threats change over time as the external environment changes and evolves. A firm’s own strengths and weaknesses also change over time as the firm develops competencies. A SWOT analysis is always a snapshot of the situation at a particular point in time. It should be revisited regularly as part of your business’s ongoing strategic process. 

Bringing it all together Internal analysis of firm attributes and external analysis of the firm’s environment are typically combined into a SWOT analysis: a look at the firm’s strengths, weaknesses, opportunities and threats (see table). Weighing your

This article is based on material used in the Insurance Institute’s FCIP program, the pinnacle of learning in Canada’s p&c industry. Focusing on strategic leadership and advanced management principles, the program blends academic business theory with practical insurance application.

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The coil bound O.I.D. contains: • 400+ pages of information • 2,200+ company listings • 130+ advertisers • 12 key industry sections: • Insurance Companies / Wholesalers • Brokers • Independent Adjusters • Appraisers

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www.claimscanada.ca

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1-800-668-2374

Or order online @ www.bit.ly/oidorder April/May 2014

Completely Updated for 2014– over 10,000 changes!

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• on the scene OTS Canadian Underwriter magazine – Insurance Media Group is excited to launch insBlogs.com A collection of industry-specific blogs hosted by a selection of industry experts from all segments of the market, covering a wide spectrum of topic areas and subject matter. Over the next few months, Canadian Underwriter will be inviting individuals to host their blog at insBlogs. com and to become frequent contributors, where they will share their opinions and analysis of industry subjects applicable to their specialty. In time, insBlogs will become a timely source of market views and commentary on all facets of the property and casualty insurance market. l

CIAA Western Region held their Masquerade Ball February 15 at the Fantasyland Hotel in Edmonton, Alberta. The event was a great success and fun was had by all in attendance. Funds were raised for the Heart and Stroke Foundation through a 50/50 draw and raffle of an Ipad Mini. l

FirstOnSite Restoration, Canada’s largest independent disaster restoration company, has been recognized as one of Canada’s Best Managed Companies for the second consecutive year. This annual award recognizes Canadian companies that have implemented world-class business practices and created value in innovative ways. In other company news, FirstOnSite announced that Bill Moorman joins the company as Senior Vice President, Central Region, Ontario (which includes Manitoba), while Jason Prescott has been assigned to the newly created role of Director of Operations, Central Region, Ontario. l STRONE, a winner of Canada’s Best Managed Companies program in 2013, has requalified in 2014 to maintain its status as a Best Managed company. Established in 1993, Canada’s Best Managed Companies is the country’s leading business awards program, recognizing excellence in Canadian-owned and managed companies with revenues over $10 million. In other company news, STRONE announced that Kevin Spiers has accepted the role of Director of Business Development for both STRONE and Itech.

The company also announced that Stephen Coombs has accepted the role of Director of National Accounts and Robert Hiscock has joined as project manager for the Calgary team.l WINMAR Franchise Corp recently announced the opening of its newest franchise WINMAR Terrace / Kitimat / Prince Rupert. With its main office located in Terrace BC, owners Andrew Contumelias, Daniel Contumelias, Brandon VanGenne and Clint Dalla Vecchia bring over 15 years of restoration and construction experience to WINMAR. l SPECS Limited, a provider of independent property damage and construction consulting services recently announced the appointment of Andrew Ross as the new Chief Operating Officer. In this new role, Andrew will oversee all aspects of the Appraisal Operations for SPECS Limited nationally. In other company news, SPEC Limited also announced the appointment of Aaron Visser as BC Regional Manager. l

Michael Holden, President and CEO of Granite Claims Solutions, announced that Juliet Gagnon-Leaker will be moving into the role of Vice President, National Quality Program for Granite Claims Solutions. In other company news, Blair McGregor, Vice President Operations, Western Region for Granite Claims Solutions recently announced the opening of its newest location in Grande Prairie, Alberta. Michael Anderson, a long-time adjuster with Granite Claims Solutions, who was formerly situated in its Kelowna, BC location, will be heading the branch. l Amandio Contreiras, Chief Operating Officer with On Side Restoration, is pleased to announce the recent appointment of Doug Irwin to the position of Vice President, Western Region. In other company news, Kitrina (Kit) Dei Cont-Oye was recently appointed as Director, Human Resources. l 40 Claims Canada

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Rocky Cross Construction North Ltd (RCCN), a Calgary based independent disaster restoration and construction contractor, announced that it has hired Darren Cherban to serve as the company’s new General Manager. l Thousands of people in Atlantic Canada were without power March 26-27 after a powerful spring storm brought crippling winds and heavy snowfall to the region. Howling winds pulled down power lines across the Maritimes, leaving about 16,000 Nova Scotians in the dark at one point.

Outages also affected about 2,400 customers in southern New Brunswick as well as customers across P.E.I. In many areas of the region, roads were snow-covered and slippery with the Trans-Canada Highway between Truro and Amherst in Nova Scotia closed until early in the day. l www.claimscanada.ca

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APPOINTMENT

Lloyd’s of London released in late March the financial results of the Lloyd’s market for calendar year 2013, reporting a combined ratio of 86.8% on gross written premiums of £26.489 billion, with the Alberta floods from June being the most costly event for the Lloyd’s market last year. The annual report reflects the results of both the members underwriting through syndicates, and the Society of Lloyd’s. As of Dec. 31, the Lloyd’s market consisted of 91 active syndicates managed the 56 managing agents.” Canada had a record year for catastrophes from flooding in Alberta and Toronto to a winter ice-storm,” Lloyd’s stated of its reinsurance results. “The net estimated claims of £120m from the Alberta flooding made it the most costly event to the Lloyd’s market in 2013.” l Intact Insurance has launched a new national television and online campaign geared to consumers, promoting its 30 Minute Claims Service Guarantee. The campaign, which includes television commercials and online ads, is meant to respond to Canadians’ desire for responsive customer service from their insurer, Intact said in late March. The insurer points to a survey by Angus Reid in which 98% of respondents said that responsiveness of a service representative was important for making a positive customer experience memorable. l Global insured losses from natural catastrophes and man-made disasters last year were $45 billion, with flooding and hail events contributing in large part, according to the latest sigma study from Swiss Re. That’s still down $81 billion over 2012, partially because of the quieter hurricane season, Swiss Re said March 26. Of the insured losses, $37 billion was from natural catastrophes, especially hail in Europe and floods across several regions. Total economic losses for the year were $140 billion, down from $196 billion in 2012, and below the 10-year average of $190 billion. the reinsurer said. l Quebec insurer SSQauto has launched a new smartphone app for submitting auto and home insurance claims. The free app includes three modules: the joint report (on the scene of the accident involving two vehicles), the auto insurance claim (one vehicle involved) and the home insurance claim, the company said. l SGI Canada entered into an agreement in late March to sell its shares in the Insurance Company of Prince Edward Island to EGI Financial Holdings Inc. at book value, estimated to be $10 million, with an additional $3.5 million to licence the use of SGI’s computer systems. The deal is expected to close this summer, SGI said in a statement Friday. SGI Canada is the property and casualty insurance division of Saskatchewan Government Insurance (SGI), which offers products in that province, Alberta, Manitoba and Ontario. l The Co-operators has introduced a new insurance solution that provides appropriate coverage, policy enhancements and extras to properly insure valuable homes, including their contents, customizations and special features. Recognizing the unique insurance needs of higher-value homes in Canada, Prestige Plus is available for single-family homes valued at $750,000 or more through all Cooperators financial advisors across Canada, notes a statement Wednesday from The Co-operators Group Limited, a Canadian-owned co-operative with more than $34 billion in assets under administration. l Merger and acquisition activity in the North American insurance market looks to be on the rise over the next few years, according to a new survey from professional services firm Towers Watson. In a survey of insurance executives, 85% said they expect to see an increase in the volume of M&A over the next one to three years, Towers Watson said.“Insurance M&A activity slackened to an unnaturally low level in most parts of the world after the 2008 financial crisis,” Jack Gibson, Towers Watson’s global lead for insurance M&A noted. l www.claimscanada.ca

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Sharon Shore Claude Blouin and Jamie Dunn, Partners at Blouin, Dunn LLP, are extremely pleased to announce that Sharon Shore has joined the firm as an associate lawyer.

Sharon was called to the Ontario Bar in 2006 after completing a CGA degree and working in a private business in the U.S. for several years.

Since becoming a lawyer, Sharon has worked exclusively in the insurance defence area, initially at a downtown Toronto law firm, then as an in house lawyer at AXA Insurance Company (now Intact) and most recently as the Director of the Litigation and Risk Management Department at Loblaw Companies Ltd. She has a broad range of litigation experience and a solid background in personal injury claims, both auto-related and slip and fall situations, and she has routinely acted for insurers on CGL claims and coverage matters. At Loblaw she oversaw all litigation/claims files and had a staff of 13.

Sharon is a member in good standing with the Law Society of Upper Canada, and is a member of the Canadian Defence Lawyers and The Advocates’ Society.

Outside of work, Sharon enjoys watching all things fantasy and science fiction, attending Blue Jays games and spending time with family and friends.

Sharon’s contact information is: sshore@blouindunn.com (416) 365-7888 ext. 149 Blouin Dunn is one of Ontario’s leading insurance defence firms whose members have been providing quality legal support to the insurance community for over 30 years.

We offer services in Ontario to property and casualty insurers throughout North America, at all levels of experience, at appropriate and competitive rates.

www.blouindunn.com April/May 2014

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• on the scene OTS While the majority of Canadians say they think climate change will cause severe weather to occur more frequently, few are taking measures to protect their homes from extreme events, according to a new study released

by RBC. Based on the company’s annual Water Attitude Study, which polled just over 2,000 Canadians earlier this year, 74% of Canadians agree that climate change will cause more frequent extreme weather events. However, only 23% said they were concerned about extreme weather causing droughts or flooding, and only 9% have taken precautionary measures to protect themselves and their homes from the effects of extreme weather events, according to RBC. l The 50th anniversary of the Great Alaskan Earthquake this week highlights the current risk faced in Canada and worldwide of a catastrophic earthquake, the Insurance Bureau of Canada said in late March. The three-minute earthquake triggered a tsunami, causing ground fissures and collapsing structures on Vancouver Island, IBC noted. The quake was the most powerful recorded in recent North American history and the second most powerful ever measured by a seismograph, according to IBC. Last fall, IBC released the results of a study it commissioned on the impact of two possible major seismic events, one in British Columbia and the other in eastern Canada. The B.C. scenario estimated economic losses of $75 billion, with insured losses of $20 billion. l Federal politicians debated in late March a proposed law that would increase the absolute liability for offshore oil and gas companies, as well as nuclear operators, to $1 billion.

Bill C-22, the Energy Safety and Security Act, was tabled in January by then-Natural Resources Minister Joe Oliver. On March 26, Greg Rickford - who replaced Oliver last week as Natural Resources Minister - moved in the Commons to have C-22 be read a second time and referred to committee. Several members spoke on the bill and debate was adjourned.If passed into law, Bill C-22 would “increase the absolute liability to $1 billion, from $30 million in the Atlantic offshore and $40 million in the Arctic offshore,” said Kelly Block, the Conservative MP for Saskatoon-RosetownBiggar, in the House of Commons Wednesday. “This means that fault or negligence does not have to be proven for that amount.” l Limited opportunities for profitable growth combined with a challenging regulatory environment were key considerations in Economical Insurance’s decision to stop writing insurance in Newfoundland and Labrador, the company has announced. In a statement March 21, Waterloo, Ont.-based Economical announced that its decision to stop writing insurance in the province as of Oct. 1, 2014 follows a thorough review of the insurer’s business in Newfoundland and Labrador. Existing policies with Economical Mutual Insurance Company or its subsidiary, Federation Insurance Company of Canada, will be honoured in full as per the coverage terms and conditions up to the expiry date stated on the policy, notes the statement from Economical, a Canadianowned and operated company. l 42 Claims Canada

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CIAA New Members — February 2014 INDIVIDUAL MEMBERSHIP Crawford & Company (Canada) Inc. Johnathan Sherman Edmonton, AB Jean Glover Mississauga, ON Mohammad Ghazwi Mississauga, ON Jaime Bell Mississauga, ON

Level 3 Level 3 Level 1 Level 1

Granite Claims Solutions Keith Germscheid Silvano Giacchetta Stephen Agnew Grant Seppanen Timothy Stone

Level 3 Level 3 Level 3 Level 3 Level 2

Calgary, AB Calgary, AB Hamilton, ON Markham, ON Mississauga, ON

Kernaghan Adjusters Limited Karl Plitong Vancouver, BC Christie Belok-Bunn Edmonton, AB

Level 3 Level 3

RETIREE MEMBERSHIP Wilbert (Wib) Fahey Fahey & Associates Insurance Adjusters Ltd., Ottawa, ON

Commercial insurance writer CNA Canada has launched a new manufacturing package policy called oneworld, which includes features such as Product Recall with Loss of Profits, Manufacturer’s E&O, Contingent Business Interruption, and coverage for Research and Development activities, among others. l The Insurance Bureau of Canada and Canadian Trucking Alliance are expanding the current Cargo Theft Reporting pilot program across the country in an effort to allow the trucking community, insurers and the authorities to better share timely information to help crack down on the crime.

Cargo crime costs Canadians up to $5 billion per year, and is an especially significant problem in transportation hubs in southern Ontario, Vancouver and Montreal, according the CTA. The pilot program fighting cargo theft has been in Ontario and Quebec since 2011 and will now expand across Canada. All insurers in Canada and trucking association members can now report cargo theft directly to IBC through an online submission form. l The majority of Canadians included in a new survey said they think texting while driving should be a criminal offence, although they saw other distracted driving behaviour as less serious. In the survey of about 1,500 Canadian drivers released Tuesday and commissioned by Kanetix.ca, 84% said texting and driving should be criminal. When asked about using a phone generally while driving, 73% said that should be a criminal offence. l A personal lines insurer in the United States has launched a new video appraisal service for auto insurance claims, which policyholders can use through the company’s mobile app for the iPhone or Android smartphones. The service from Esurance, the direct-to-consumer personal insurance company owned by Allstate, allows consumers to video chat in real-time with an Esurance appraiser to get their claim estimate immediately. The new service is part of Esurance Mobile, the company’s free app. l www.claimscanada.ca

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• on the scene OTS Hundreds of insurance claims industry guests attended the 8th Annual Post CICMA/ CIAA Joint Conference Cocktail on February 4, 2014. Entitled The Big Mingle, the event featured an “all-things Canadian” theme, with a nod to the (then) upcoming Winter Olympics.

Giffin Koerth and Blouin Dunn LLP hosted the event, held at The Fifth Social Club in Toronto. l

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www.claimscanada.ca

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The CICMA/CIAA Ontario Chapter’s 47th Annual Joint Conference was held February 4, 2014 at the Metro Toronto Convention Centre. The theme of the conference was “Technology Supporting Claims… It’s in the Clouds.” Guest speakers were: master of ceremonies Brian Maltman, executive director of General Insurance OmbudService; Jo-Ann Eccleston, past president of the Ontario CICMA Chapter; Dorothy Lowry, president of the Ontario CIAA Chapter; Carol Kreiling, vice president at Swiss Re; Steven Dubenow, national manager at SIU, CKR Global; John Kotsopoulos, president and CEO of iAutoConnect; and the keynote speaker, Amber MacArthur, entrepreneur, bestselling author, well-known blogger, keynote speaker and TV host. l

www.claimscanada.ca

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• on the scene OTS More than 150 exhibitors from across Canada showcased their works at the Ontario Insurance Adjusters’ Association’s (OIAA) Professional Development and Claims Conference in Toronto on February 5, 2014. The event featured a trade show and seminars covering a wide variety of timely claims topics. l

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www.claimscanada.ca

14-04-21 2:09 PM

Announcing the

QUARTER CENTURY CLUB 55th Annual Reception

WEDnesday, May 21st, 2014 The Albany Club 91 King Street East Toronto, ON, M5C 1G3 Reception – 12:00 p.m.

Cost - $75.00 55th Annual Reception Committee:

John Cherrie - 416-737-7525 Stewart Ponton - 905-740-1100 Ford Blow - 416-457-7072

Send Contact Info and Cheque Payable to (or VISA, provide exp. date):

Featuring…

‘The Roasting of Beth Bull’

Stewart Ponton Quarter Century Club Granite Claims Solutions 5915 Airport Road, Suite 200 Mississauga, ON, L4V 1T1 Phone: 905-740-1100 Fax: 905-671-2088 Email: stewart.ponton@graniteclaims.com

Thank you for the support of these generous event sponsors:

Once again this year, the Quarter Century Club plans to continue to make a donation to the Insurance Institute Scholarship Fund, in memory of our claims colleagues Design and Space Compliments of:

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Prevent.

Prepare.

Respond.

A Catastrophe Doesn’t Have to be a Disaster Catastrophic events may be inevitable and unpredictable, but with the right preparation they don’t have to mean huge losses to a business. Crawford has dealt with every kind of catastrophe, from floods, to ice storms, to fires. Not only can we help you and your clients respond to these events, we can also help you prepare for them, so losses are minimized when they do happen.

Contact us at info@crawco.ca to find out how Crawford can help you prevent, prepare, and respond to catastrophes.

www.crawfordandcompany.ca

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