Claims Canada December January 2017

www.claimscanada.ca

December/January 2017

Ofÿcial Journal of the Canadian Indépendent Adjusters’ Association

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Contents DECEMBER / JANUARY 2017 • VOLUME 10 • NUMBER

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Cover Feature 12 Cyber Risk - The great unknown Cyber breaches are rapidly becoming a major source of loss for business. But due to the rapid evolution of attack styles and the difficulty in identify ng the risks, they remain terra incognita for the insurance industry.

12

BY EMILY ATKINS

Spotlight 20 Diving right in Fair Way Adjusters’ partners thrive while learning on the job BY EMILY ATKINS

News Features 28 Coverage for Social Engineering Fraud Takes its Place Among the Required Coverage for Canadian Business BY DAVID S. WILSON, CHRIS MCKIBBIN AND ZACK GARCIA

33 Dirty Windows Help to Clarify Appellate Review of Standard Form Contracts

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BY MICHAEL S. TEITELBAUM AND TARA CHOWN

38 Environmental Losses Related to Transportation Claims BY JOEL VAN POPTA, M.SC. P.GEO.

40 How Data Empowers Cutting-Edge Claims Processes BY DARA BANGA, FCIP, CFEI

Departments

38

4 First Notice 42 On The Scene

Columns 10 President’s Message

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2016-12-23 10:23 AM

• first notice FN Public campaign on flood safety Canada’s Minister of Public Safety and Emergency Preparedness, Ralph Goodale, has announced a new public awareness campaign called ‘Flood Ready’, aimed at increasing Canadians’ knowledge of fl od risks. Goodale announced the campaign to participants gathered in Montreal for the Seventh Annual National Roundtable on Disaster Risk Reduction. The roundtable brought together all levels of government, the private sector, non-government organizations and individual Canadians interested in finding “innovative ways to collectively reduce the risks and impacts of disaster,” Public Safety and Emergency Preparedness Canada said in a press release. This year, discussions focused on the theme of “Understanding Disaster Risks,” the first of four priorities for action under the United Nations’s Sendai Framework for Disaster Risk Reduction. Flood Ready provides an overview of overland flooding; the cost of flooding (more than $20 billion in flood damage between 2003 and 2012); reasons to be “flood ready”; a quiz on flood risks; a step-by-step guide on making properties and communities safer; ways to build flood-readiness into a property (such as backwater valves or plugs for drains, toilets and other sewer connections); and community flood planning

steps, tools and government programs (for example: formal risk assessments and an explanation of the National Disaster Mitigation Program). The government of Quebec also took part in the roundtable, which gave participants an opportunity to share their knowledge and experience, said Martin Coiteux, the province’s Minister of Municipal Affairs and Land Occupancy, the Minister of Public Safety and the Minister Responsible for the Montreal Region. “In the context of climate change, we must act before disasters occur in order to reduce their impact,” he said. “For this reason, the government promotes, in collaboration with our partners, including Quebec’s municipalities, a preventive approach to emergency management.” “As a municipal government, we play an essential role in increasing our understanding of disaster risks and in enhancing protection for our population,” noted Montreal mayor Denis Coderre. “As such, it is essential for us to invest in our risk management expertise and to increase our population’s awareness.” The annual roundtable is a key element of Canada’s Platform for Disaster Risk Reduction. Membership includes over 500 individuals and organizations from across sectors. ●

Ontario piloting autonomous vehicles Ontario’s Ministry of Transportation (MTO) is launching the first automated vehicle (AV) pilot program in Canada, led by the University of Waterloo, the Erwin Hymer Group and BlackBerry QNX. The pilot brings together expertise from the research, manufacturing and technology sectors to advance innovation and capability in Ontario’s AV sector. The WATCar Project at the University of Waterloo’s Centre for Automotive Research will monitor a Lincoln MKZ for performance and test it on-road at different levels of automation. The Erwin Hymer Group, an international auto manufacturer active in Kitchener-Waterloo, Ontario’s tech and innovation corridor, will test and monitor a Mercedes-Benz Sprinter van at different levels of automation. BlackBerry QNX, a software development company and subsidiary of BlackBerry, will test a 2017 Lincoln with automated features. In January, Ontario created a pilot regulatory framework to test automated vehicles on its roads. The province has also provided $2.95 million in funding to support the province’s industry and educational institutions through the Ontario Centres of Excellence Connected Vehicle/Automated Vehicle Program. According to a forecast by the Institute of Electrical and Electronics Engineers, AVs will account for 75 percent of all vehicles on the road by 2040. ● 4

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December/January 2017

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• first notice FN Extreme natural disasters push people into poverty The impact of extreme natural disasters is equivalent to a global US$520 billion loss in annual consumption, forcing some 26 million people into poverty each year, a new report from the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR) has found. “Severe climate shocks threaten to roll back decades of progress against poverty,” said World Bank Group president Jim Yong Kim. “Storms, floods, and droughts have dire human and economic consequences, with poor people often paying the heaviest price. Building resilience to disasters not only makes economic sense, it is a moral imperative.” The report, Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters, warned that the combined human and economic impacts of extreme weather on poverty are “far more devastating than previously understood.” In all of the 117 countries studied, which included Canada and the United States, the effect on well-being, measured in terms of lost consumption, was found to be larger than asset losses. Because disaster losses disproportionately affect poor people, who have a limited ability to cope with them, the report estimates that impact on well-being in these countries is

equivalent to consumption losses of about US$520 billion a year. This outstrips all other estimates by as much as 60 percent. The report’s findings underscore the urgency for climatesmart policies that better protect the most vulnerable. Poor people are typically more exposed to natural hazards, losing more of their wealth, and are often unable to draw on support from family, friends, financial systems or governments. The report uses a new method of measuring disaster damages, factoring in the unequal burden of natural disasters on the poor. Socioeconomic resilience measures an economy’s ability to minimize the impact of asset losses on well-being and is defined as the ratio of asset losses (hazard, exposure and vulnerability) to well-being losses (which includes socioeconomic resilience). “Countries are enduring a growing number of unexpected shocks as a result of climate change,” said Stephane Hallegatte, a GFDRR economist, who led preparation of the report. “Poor people need social and financial protection from disasters that cannot be avoided. With risk policies in place that we know to be effective, we have the opportunity to prevent millions of people from falling into poverty.” ●

Claims transformation requires strategy, understanding technology

It has been an honour and a pleasure to work with our clients this year. We wish you and your family a joyous holiday season and all the best in 2017.

1-877-888-9111 | www.fgsna.com 6

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Before setting out on claims transformation efforts, property and casualty insurers should establish clear strategic goals and success metrics, consider the ways in which the claims process is changing and understand the potential impact of emerging technologies like medical analytics and the Internet of Things (IoT), Research and strategic advisory firm Novarica said in a new report, Best Practices for Transforming Claims Systems. “While replacing any core system is a complicated task, claims system replacements have nuances and differences that can create opportunity—or risk—for carriers in implementation,” said Jim Klotz, vice president of research and consulting at Novarica. “In order to have a successful claims transformation, whether carriers are using a third-party vendor or building a solution in-house, they need to consider the impact of complex, multi-party processes, direct communications with claimants and what their strategic goals are.” Novarica noted in the report that claims transformation requires considering role specialization, litigation support and a wide range of external dependencies, as well as understanding the potential impact of emerging technologies like mobile, medical analytics, IoT and cognitive intelligence. ● www.claimscanada.ca

2016-12-23 10:25 AM

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• first notice FN Independence of global extreme weather events confirmed Extreme weather events can be modelled as “independent” by global reinsurers when assessing many of their key aggregate risks around the world, says a new report from Lloyd’s, the world’s only specialist insurance and reinsurance market, and the Met Office, the United Kingdom’s national meteorological service. The report, titled The risk of global weather teleconnections, analyzed the links— known as teleconnections—between extreme weather events occurring in separate regions of the world that can take place over a range of timescales from days to years. Lloyd’s said that Met Office research found the majority of perils are not significantly correlated. But it also identified nine noteworthy “peril-to-peril” teleconnections, most of which are negatively correlated. In this context, peril-to-peril means the interconnection between risks, for example, the potential for a hurricane in the United States and a flood in China to occur as the result of one another, the statement explained. The Met Office research analyzed the impact of nine (out of a pool of 22) “earth-system drivers,” such as El Niño, on 16 priority region-perils. The region-perils include, among others,

flooding, windstorms and wildfi e in Australia; tropical cyclones in the north-eastern part of the US and the east coast of Canada; and tornadoes in the US. Lloyds’ modelling found the studied correlations were not substantial enough to warrant changes to the amount of capital it holds to cover extreme weather claims. “An assumption of independence for capitalholding purposes is therefore appropriate for the key risks the Lloyd’s market currently insures,” the statement said. “Even when there is some correlation between weather patterns, it does not necessarily follow that there will be large insurance losses. Extreme weather events may still occur simultaneously even if there is no link between them.” Trevor Maynard, head of exposure management and reinsurance at Lloyd’s, said the report’s findings “go a long way to answering the challenge that capital for local risks should be held in their own jurisdictions. Lloyd’s believes this approach reduces the capital efficiency of the (re)insurance market by overlooking the heart of insurance and the diversification benefits provided by writing different risks in different locations, and in doing so, needlessly increase costs to the ultimate detriment of policyholders.” ●

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December/January 2017

President Joe Glionna

Vice President, Operations Melissa Summerfield

Controller Anthony Evangelista

Director of Circulation Pat Glionna Head Office 451 Attwell Dr., Toronto, ON M9W 5C4 (416) 614-2200 • fax: (416) 614-8861

Produced by the publishers of Canadian Underwriter magazine

A bi-monthly magazine (6x per year), Claims Canada is published by NEWCOM Business Media Inc. 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

Chairman and Founder Jim Glionna

Regional Office 80 Valleybrook Dr., Toronto, ON M3B 2S9 (416) 442-5600 • fax: (416) 510-5169

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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HEATHER MATTHEWS

You cannot turn a page, open a news article, turn on the television or even have a conversation without technology somehow weaving its thread in. We are bombarded with the latest advancements in all industry sectors. In my last message I spoke a great deal about the very technology that is changing and disrupting the claims and insurance environment. Amidst all of the advancement, people are the common core that we should not lose sight of. Technology is changing and people in the claims business need to change as well. We need to marry technology and our technical adjusting skills with customer-centric behaviour or soft skills. We are in the business of helping people. We have seen, time after time, especially in catastrophic situations, that people affected by a loss want to talk to a human. While technologies such as a web portal or app offer the customer more choices, even when they file a digital claim they still want to talk about their story and learn about the process they are about to embark upon. They want and need to tell their story. It is part of the healing process and we as adjusters are also part of that healing process. It is no longer enough to be a technical claims adjuster. That is a given. We must rise to the challenge of creating a customercentric brand that is coupled with those technical adjusting skills and technology. This is where you pay attention to the human details and elements and not just to the loss details. Be perceptive of what has not been said. Probe for understanding and stop and listen. Look to see what else is going

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Vous ne pouvez pas tourner une page, ouvrir un article, allumer la télévision, ni même avoir une conversation sans que la technologie s’en mêle, d’une façon ou d’une autre. Nous sommes bombardés par les derniers progrès dans tous les secteurs de l’industrie. Dans mon dernier message, j’ai longuement parlé de cette même technologie qui modifie et perturbe l’environnement des sinistres et de l’assurance. Malgré tous ces progrès, les gens sont le noyau commun que nous ne devons pas perdre de vue. La technologie évolue, et les gens dans le secteur des sinistres doivent évoluer aussi. Nous devons combiner la technologie et nos aptitudes techniques de règlement des sinistres avec un comportement axé sur le client ou des compétences techniques. Notre activité vise à aider les gens. Nous avons constaté, à maintes reprises, particulièrement dans des situations catastrophiques, que les gens touchés par un sinistre veulent parler à un être humain. Bien que les technologies, comme un portail ou une application Web, offrent davantage de choix au client, même lorsque le client soumet une demande de règlement électronique, il veut toujours discuter de son histoire et en savoir plus sur le processus qu’il entame. Il veut et doit raconter son histoire. Ce sentiment fait partie du processus de rétablissement, et nous, à titre d’experts en sinistres, faisons également partie de ce processus de rétablissement. Le fait d’être un expert en sinistres technique n’est plus suffisant. C’est une évidence. Nous devons relever le défi de créer une marque axée sur le client qui se combine avec ces aptitudes et cette technologie de règlement technique. C’est là où vous devez porter attention aux détails et aux éléments humains et non seulement aux détails du sinistre. Soyez réceptif à ce qui n’a pas été dit. Vérifi z la compréhension, arrêtez-vous et écoutez. Cherchez à savoir ce qui se passe d’autre dans

www.claimscanada.ca

2016-12-23 10:32 AM

on in that person’s life at the time of the loss. Show empathy; understand that this is their tragedy. You, as an adjuster, may have seen many tragedies and may be going onto the next one shortly, but for this moment, this is their loss and we need to be focused on their needs. There is much discussion over customer satisfaction and net promoter scores (NPS), which essentially measure overall client loyalty. Client loyalty, in contrast to client satisfaction, is a direct indicator of actual client behaviour—namely referrals, retention, and repeat business. Research has proven a direct correlation between a high NPS and the overall profi ability of a company. So what does it take from an adjuster’s perspective to be customer centric and ultimately achieve a high promoter score? Communication is key. Regular, meaningful and timely communication is the number one reason someone is likely to remain with their current insurance provider. Customers like to feel engaged with the companies they do business with. The feedback for high net promoter scores can be broken down into key words that should resonate with all of us. As adjusters we can stay relevant and add value by remembering to provide: • Regular, meaningful and timely communication; • Expert advice and a high level of professionalism; • Speed of service; • Empathy, understanding and a focus on the human element. ■

la vie de la personne au moment du sinistre. Faites preuve d’empathie; soyez conscient qu’il s’agit d’une tragédie pour cette personne. En tant qu’experts en sinistres, vous avez peut-être vu beaucoup de tragédies, et d’ici peu, vous en verrez peut-être d’autres, mais pour le moment, il s’agit de la perte de cette personne, et nous devons nous concentrer sur ses besoins. Il existe beaucoup de discussions sur la satisfaction de la clientèle et les taux de prescription qui servent surtout à mesurer, en général, le degré de fidél té de la clientèle. La fidél té de la clientèle, contrairement à la satisfaction de la clientèle, est un indicateur direct du comportement réel du client, notamment les recommandations, la fidélisation et la continuité des aff ires. Les recherches ont montré qu’il y a un lien direct entre un taux de prescription élevé et la rentabilité globale d’une entreprise. Donc, qu’est-ce qui est nécessaire du point de vue de l’expert en sinistres pour être axé sur le client et, en fin de compte, obtenir un taux de prescription élevé? La communication est un élément essentiel. Une communication régulière et signifi nte, faite en temps opportun, constitue la principale raison pour laquelle une personne est susceptible de continuer à faire aff ire avec son assureur actuel. Les clients aiment se sentir interpellés par les entreprises avec lesquelles ils font aff ire. Les commentaires pour le taux de prescription peuvent être exprimés en mots clés que nous devrions tous comprendre. En tant qu’experts en sinistres, nous pouvons rester pertinents et ajouter de la valeur en nous rappelant que nous devons offrir : Des communications régulières, signifi atives et en temps opportun; • Des conseils d’expert et un haut niveau de professionnalisme; • Un service rapide; • De l’empathie, de la compréhension et une orientation sur l’élément humain. ■

NATIONAL EXECUTIVE 2016 - 2017 PRESIDENT Heather Matthews, CIP, CRM, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca 1ST VICE-PRESIDENT Monica Kuzyk, FCIP, CRM Curo Claims Services 125 Northfield D . W., P.O. Box 218 Waterloo, ON N2J 3Z9 Ph: (866) 952-2876 • Fax: (519) 888-9704 E-mail: mkuzyk@curocanada.com 2ND VICE-PRESIDENT Lee Powell Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Ph: (905) 896-8181 • Fax: (905) 896-3485 E-mail: lpowell@cl-na.com SECRETARY Jeff Edge, CIP, CFEI Leading Edge Claims Services Inc. P.O. Box 1399, 78 Highway 20 West Fonthill, ON L0S 1E0 Phone: (289) 897-8676 Fax: (289) 897-8677 E-mail: jeff@leadingedgecs.ca

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TREASURER John D. Seyler, CIP Integrated Insurance Resources 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@integrated-ins.ca PAST-PRESIDENT Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.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 Paul Féron, FCIP, CRM – ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2 Ph: (519) 645-6500 • Fax: (519) 645-2250 E-mail: paul.feron@scm.ca DIRECTOR Lorri Frederick – ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Ph: (905) 308-6292 • Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca DIRECTOR James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Ph: (519) 578-5540 • Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca DIRECTOR E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Ph: (902) 468-7787 • Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca DIRECTOR Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Ph: (905) 896-8181 • Fax: (905) 896-3485 E-mail: apoon@cl-na.com

DIRECTOR Lee Powell 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: lpowell@cl-na.com DIRECTOR Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com DIRECTOR Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 2001 Sheppard Ave. East, Suite 810 Toronto, ON M2J 4Z8 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com DIRECTOR Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA, FIFAA AMG Claims Inc. P.O. Box 20102 Sherwood Charlottetown, PE C1A 9E3 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca

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One of the only certainties when talking about cyber attacks is that they are increasing in frequency and severity.

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or many businesses, it’s rapidly becoming a situation of when—not if—a breach that releases the private data of customers or causes a loss of business will happen to them. Yet, most cyber risks are not insured. The threats, risks and responses are still largely unexplored territory for Canadian businesses—insurers and potential targets alike—creating plenty of opportunity—and danger—as the environment evolves and knowledge grows. While cyber attacks are becoming more and more frequent, and high-profile breaches—like Yahoo’s recent revelation that one billion of its users’ data was compromised, or the malicious hack of the cheaters’ website, Ashley Madison (see Sidebar: Recent High Profile Cyber Breaches), gain immediate media attention, these are just the tip of the iceberg. For every major breach, there are many minor ones that go under the radar, says Jennifer Drake, VP and Legal Consultant in the Legal and Research Practice Group at Aon Canada. “It’s very significant.”

interruption, data and system loss, reputational harm, and loss of the personal data of clients.

Threat actors Breaches are created by threat actors, which can be anything from a mouse chewing a wire and shorting out a com-

puter system, to the most sophisticated hacking organization. While a breach can be caused inadvertently by employee error—losing a USB key, or failing to secure passwords for example—it’s becoming more common to face malicious hackers who deliberately attempt to shut companies down,

PROPERTY RESTORATION SPECIAI..ISTS

The scope Globally, forecasts say cyber crime costs are going to quadruple between 2015 and 2019. Juniper research has suggested that data breaches will cost US$2.1 trillion by that date, which, it notes, is 2.2 percent of the world’s expected GDP for that year. The average cost to organizations in Canada was $5.32 million, according to the 2015 Cost of Data Breach Study: Canada by IBM and the Ponemon Institute. They found in their sample of 21 Canadian companies in 11 industry sectors, which had reported a breach of protected personal data and had notified victims, that the average cost per compromised record was $250. The companies in the study lost between 5,199 and 74,550 records, with an average of 20,456. The largest cost to the breached companies was lost business at an average of $1.99 million per breach, while the cost of notifi ation was the least, at an average of $0.12 million. And the potential harms don’t stop there. Data breaches can cause business

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and steal data or money. And it’s the malicious breaches that cost the most. Getting ahead of the criminals is often very challenging, says Ryan Duquette, Founder and Partner at HEXIGENT Consulting, cyber forensic investigation specialists in Oakville, Ontario. “They are not some individual hacker sitting in his parent’s basement,” he says. “They are an enterprise. They have HR departments, they have a research and development department, they have customer service department. They run like a business.” In fact, it’s sometimes not even a criminal organization but a nation state committing the hacks. Ben Ogunleye, Executive General Adjuster, Major & Complex Loss, Canada Cunningham Lindsey, recounts how a client received a knock on the door from CSIS (the Canadian Security Intelligence Service) informing them that their data had been breached by a “foreign actor.” Duquette agrees that this is becoming more common. The evolution towards more criminal involvement is also upping the ante in terms of the type of attack. “The biggest trend is people coming up with new,

diverse routes to get to corporate data,” Duquette says. Ransom or extortion breaches are rapidly gaining in popularity. Alex Cameron, a partner at Fasken Martineau in Toronto notes thousands of new variants of ransomware have emerged this year alone. “A year ago ransomware was largely assumed to not constitute a pri-

While any cyber breach is an urgent matter, when there’s a loss of personally identifiable data in that breach, action needs to be taken immediately. vacy breach, simply because the ransomware itself only locked up data. It didn’t access or take any data,” he says. “But the new variants have sometimes got built-in functionality to access and take data.” “It’s quite easy for a threat actor to either draft up an email with a malicious PDF or do a little bit of social engineer-

ing and pretend to be somebody else in the organization and spread ransomware through the organization,” Duquette adds. “It can be very, very lucrative.” And companies are tempted to pay, which unleashes a whole additional realm of issues.

When a breach occurs An organization often only learns there’s been a cyber breach when systems stop working. In the case of ransomware or extortion it’s often a message from the hacker that alerts the victim to the loss. While any cyber breach is an urgent matter, when there’s a loss of personally identifiable data in that breach, action needs to be taken immediately. As a lawyer, Cameron is often one of the first called in when a breach occurs. “The objective is always to have the call coming to us, if not immediately—which would be the perfect world—then as soon as possible for privilege reasons,” he says. This is to prevent clients from saying or doing anything that might create legal or potential reputational risks. Canadian legislation does not yet require automatic notification that personal data has been breached, except in

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health care and Alberta. However, the new Digital Privacy Act (which passed into law in June 2015, amending provisions of the Personal Information Protection and Electronic Documents Act - PIPEDA) is expected to be brought into force in 2017. It will require organizations, as soon as possible, to notify individuals and report to the privacy commissioner any breach that likely creates risk of signifi ant harm to the individual. Although not mandated, many companies are opting for the notifi ation option, as was the case in the recent hacking incident that affected Ontario’s Casino Rama Resort (see sidebar for details). With or without the need for notifi ation, a major breach will require a team to respond—there are a lot of bases to be covered—quickly. Lawyers are frequently taking on the role of ‘breach coach’ in these incidents. As Cameron notes, because they are the first to know, it’s logical for them to gather the experts needed to manage the process. These can include other lawyers, outside forensic experts, crisis communications experts, and depending on the circumstances, identity theft and credit monitoring services, and

call centre services and notifi ation service providers, if it’s a large incident.

The adjuster’s role While he sees why the legal profession has staked out this territory, Paul Hancock, Vice President GTS Canada and Toronto Branch Manager with Crawford & Company (Canada) Inc., thinks this is

“There’s no matrix or checklist that would definitively say ‘here’s what happened, therefore these are the losses or the insurance payout that we’re going to put forward’.” a logical role for independent adjusters as the cyber claims process evolves. “The legal community certainly has a huge role in cyber breaches, and certainly from a privilege standpoint in the investigation of material that comes out of it,” he says. “They can’t be excluded, they are critical to it.”

But at Crawford, Hancock says, the belief is that the independent can do it for a lower rate, because “that’s what we do for a living—we react instantly, we do after hours, we manage large, complex losses, we manage vendors to assist with us, and it’s vendors that you’re going to be dealing with whether it’s the legal community, credit monitoring, IT firms to do the investigation, forensic accounting, all that stuff—it’s managing vendors and that’s what we do for a living.” Duquette says there will need to be a high level of expertise brought to bear investigating claims. “We’re dealing with digital world where there isn’t always obvious evidence,” he says, noting that investigators will have to be able to not only find the evidence but also contextualize it. “There’s no matrix or checklist that would definitively say ‘here’s what happened, therefore these are the losses or the insurance payout that we’re going to put forward’.” Like Hancock, he sees the adjusters’ role as one of overseeing the technical experts. But Cunningham Lindsey’s Ogunleye believes it should be an adjuster’s

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job. “Any adjuster can do this. I don’t want to make it sound like you have to be a rocket scientist to do cyber claims, I don’t think it’s complicated,” he says. “You just need the right mind to review the policy, and when you investigate to ask the right questions; just go where the evidence leads you.”

An evolving market But at the moment, adjusters are not getting particularly involved because the

claims just aren’t there yet. As Hancock notes, Crawford, in Canada, has handled perhaps 15 or 20 cyber claims in total. Canada is not alone. At the moment, global premiums for cyber coverage are less than one-half of one percent of the estimated cost of cyber crime. By contrast, auto insurance premiums worldwide exceed international estimates of vehicle collision damage, says Cyber Risks Implications for the Insurance Industry in Canada,

a study by The Insurance Institute of Canada. “The volume is not there yet,” says Ogunleye. “I think you can correlate that to lack of understanding of the product, both from the consumer and brokerage perspective.” He says that the markets do not yet see the need, and feel that insurers are just trying to sell them something they don’t require. Brokers, he believes, need to gain a better understanding of the

Recent High Profile Cyber Breaches Ashley Madison In July 2015 it came to light that online dating website for married people seeking “discreet encounters”, Ashley Madison, had been hacked by a group that identified itself as “The Impact Team”. Media reported that the hackers threatened to release the website’s users’ personal information if the site was not shut down. The operators of Ashley Madison—Avid Life Media (ALM), a Toronto-based company— announced they had removed any personally identifiable information (PID) from their site, but a month later media reported that the information the hackers had stolen was published online. According to the website for Sutts, Strosberg LLP, a law firm handling a class-action suit against the company, the disclosed information—which pertained to 30 to 40 million users—included: “the names, addresses, e-mail addresses, phone numbers, gender, dates of birth, profile captions, weight and height, lifestyle attributes and preferences, relationship statuses, sexual preferences, credit card information, and transaction history.” The information of people who had paid Ashley Madison to delete their data was also included. As a result the company lost about a quarter of its annual revenue, there were reports of suicides, resignations and marriage breakups, and the Office of the Privacy Commissioner of Canada, together with the Office of the Australian Information Commissioner, investigated. The results of that investigation were released in a report this August, which noted the company’s security measures were lacking, and its use of a fake security verification was deceptive. “Security measures should be documented in writing and include technological, physical and organizational safeguards,” said Canadian Privacy Commissioner Daniel Therrien. “Businesses must also assess risks, align their policies to mitigate those risks and train employees to ensure that policies are actually implemented and followed.” The investigation, which examined Avid Life Media’s compliance with both the Personal Information Protection and Electronic Documents Act (PIPEDA), Canada’s federal private sector privacy law and Australia’s Privacy Act, focused on four key issues: Information security; retention and deletion of user

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accounts; accuracy of email addresses and transparency with users. The investigation found the company was inappropriately retaining some personal information after profiles had been deactivated or deleted by users. The investigation also discovered the company did not adequately ensure the accuracy of customer email addresses it held—an issue that resulted in the email addresses of people who had never actually signed up for Ashley Madison being included in the databases published online following the breach. This issue raised particular concerns given that, for both users and non-users, any association with a site such as Ashley Madison could cause serious reputational harm. Finally, with respect to transparency, investigators found that at the time of the breach, the home page of the Ashley Madison website included various trustmarks suggesting a high level of security, including a medal icon labelled “trusted security award”. ALM officials later admitted the trustmark was their own fabrication and removed it. The Commissioners issued a number of recommendations aimed at bringing the company into compliance with privacy laws in a timely fashion. ALM (now renamed Ruby Corp.) cooperated with the investigation and agreed to demonstrate its commitment to addressing privacy concerns by entering into a compliance agreement with the Canadian Commissioner and an enforceable undertaking with the Australian Commissioner, making the recommendations enforceable in court. On August 20, 2015, Charney Lawyers and Sutts, Strosberg LLP launched a national class action against the owners and operators of AshleyMadison.com. This lawsuit was filed in Toronto on behalf of all residents of Canada who subscribed to the website. The plaintiff claimed $760 million in damages, alleging Ashley Madison’s parent companies are liable to the representative plaintiff and class members for breach of contract, breach of Ontario’s Consumer Protection Act, negligence, intrusion upon seclusion, breach of privacy, and publicity given to private life. On August 25, 2015, the same law firms filed a class action in Montreal on behalf of all Quebec residents who subscribed to Ashley Madison.

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Recent High Profile Cyber Breaches Casino Rama On November 4, 2016 Casino Rama Resort, near Orillia, Ontario, a First Nations commercial casino and resort, learned it had been the victim of a cyber attack. Initially the casino reported that “past and present customer, employee and vendor information” had been stolen. Subsequently it was revealed that the information had been published on the Internet. CityNews.ca reported on November 11 that it had found links to the data online, which included “collection agency information, revenue reports from the casino and hotel, and customers’ credit and betting histories.” According to the casino’s website, this fits with what the hacker claims to have accessed—information that includes Casino Rama Resort IT information, financial reports regarding the hotel and casino, security incident reports, Casino Rama Resort email, patron credit inquiries, collection and debt information, vendor information and contracts and employee information including performance reviews, payroll data, terminations, social insurance numbers and dates of birth. The hacker claims that the employee information dates from 2004 to 2016, and that some of the other categories of information taken date back to 2007. The casino is working with provincial and federal police departments, the Ontario Lottery and Gaming Commission (OLG), and alerted the Ontario and federal privacy commissioners. On November 14th a class action lawsuit was filed by Charney Lawyers and Sutts, Strosberg on behalf of past and present Casino Rama employees, customers and vendors for damages resulting from the hack. The plaintiffs assert that Casino Rama breached its own Privacy Policy by failing to take reasonable security measures to protect against unauthorized access to class members’ personal and confidential information. The suit is seeking $50 million in damages. Flaherty McCarthy LLP filed second suit on November 15, 2016, seeking $500 million in damages. The matter of the hack and online disclosure is still under investigation by police.

Yahoo Internet email and services provider Yahoo revealed two major data breaches in recent weeks. In September 2016 the company announced that in late 2014 over 500 million of its user accounts had been hacked. Then, in December 2016, the company confessed to another hacking incident, which took place in August 2013. This one affected data from over one billion user accounts. The company also said that an unspecified number of additional accounts were compromised through an attack involving forged cookies. These are likely the largest breaches ever to have occurred. Data stolen included names, email addresses, phone numbers, security questions and answers, dates of birth and encrypted passwords. Class actions are being prepared. In Canada, Charney Lawyers has filed a notice of action of a $50 million claim, and is seeking class members. The law firms are asking anyone with a Yahoo account since before 2015 to register. Anyone with a Yahoo account, including Mail, Answers, Auto, Finance, Groups, Messenger, along with Flickr, Sky, Tumblr and more are advised to change passwords and clear their browser cache immediately and regularly.

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product as well: “Communicating to the market is a challenge, because if you really can’t explain it, I don’t think you can sell it,” he adds. “I would suggest part of it is the coverage aspect,” Hancock says. “The coverage is changing, the limits have been very low, the coverages have been minimal, not broad enough, probably, and both of those factors have a play in how many claims are out there.”

Climbing coverage But things are set for a rapid change. In its Global State of Information Security Survey 2016 PwC says the global cyber insurance market will climb to US$7.5 billion in annual sales by 2020, up from $2.5 billion this year. In Canada, Aon’s Jennifer Drake says more and more companies in all industries and of all sizes are expressing an interest in cyber insurance. “We’ve seen a huge growth in that area, probably the fastest growing area in insurance right now,” she says. “Growth in our book is more than doubling year over year, in terms of the number of clients purchasing it.” This is partly due to the growing awareness of cyber breaches, thanks to the high profile incidents that seem to be making the news on a regular basis (see sidebar: Recent High Profile Breaches). It’s also because the industry is adjusting its offerings to match the evolution of cyber crime. Drake points out that until recently limits were lower, but now insurers are offering full limits on cyber policies. She also points out that, so far, payouts have been primarily (70 percent) for first party costs—the immediate expenses related to recovering from a breach. Third party costs, to cover damages caused by personal data breaches have not caught up, at least partly because courts have frequently denied claims.

Identifying the risk But as limits continue to rise, Drake says it raises the thorny issue of how to gauge the risk. Looking at the number of employees, location, number of data records, existing security systems don’t really give an accurate picture of the potential for loss. “The two greatest causes that we see in cyber breaches are the things that it’s hardest for anybody to predict and control, which are the ever-increasing sophistication of hackers and then the www.claimscanada.ca

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Cyber Terms A helpful glossary of terms used in the world of cyber security Breach: Any time sensitive, protected or confidential data has potentially been viewed, stolen or used by an individual or entity without authorization. DDoS: Distributed Denial of Service. An attack that attempts to render an online service unavailable by overwhelming it with traffic from multiple sources.

human element,” she says. “I think it will take some larger losses in Canada to predict changes in pricing.” In spite of their growing prevalence and the mounting costs associated with mitigating the damage they cause, cyber breaches still constitute a risk that the industry is trying to come to grips with. “The question remains,” Drake says. “What are we ultimately underwriting in terms of the potential for loss? That’s the hardest part—to quantify that.” •

Digital Privacy Act: Received Royal Assent in June 2015, resulting in a number of significant amendments to Canada’s federal private sector privacy law, the Personal Information Protection and Electronic Documents Act (PIPEDA). Malware: A general term for code with malicious intent that typically steals data or destroys something on the computer. PHI: Personal Health Information PID: Personally Identifiable Data PIPEDA: The Personal Information Protection and Electronic Documents Act (PIPEDA) is the Canadian federal privacy law for private-sector organizations. It sets out the ground rules for how businesses must handle personal information in the course of commercial activity. Phishing: An attempt to obtain sensitive information such as usernames, passwords, and credit card details by masquerading as a trustworthy entity in an electronic communication Ransomware: A hack where data is stolen or made inaccessible and a demand is made, usually for cash. Also known as an extortion threat.

With over 40 offices on 5 continents, over 30 language fluencies, 18 distinct professional designations and a work history that spans more than 130 countries and 800 industries, we are truly world-class experts with a global reach. To work with a member of our respected team contact any one of our Canadian offices or visit us at mdd.com.

Threat Agent: An individual or group that can manifest a threat. Does not have to be malicious or intentional. Whaling: An attack that typically involves a hacker masquerading as a senior executive asking an employee to transfer money.

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• spotlight S Diving Right In

Fair Way Adjusters’ partners thrive on learning on the job BY EMILY ATKINS

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were all understanding and they knew the process that needed to be done before we could continue doing any business.” And, just like that, in a 24-hour period, the two became the owners of Fair Way Adjusters. At that point neither was a Level 3 adjuster yet, so they relied on senior adjuster Dennis McMahon who had been with the company for many years.

Which is “ something that’s

really nice about not just owning a company but as an independent adjuster we have that flexibility to be able to work whenever we can.

“

W

hen Krista McCann and Lisa Montgomery joined Saskatoon, Saskatchewanbased Fair Way Adjusters in 2010 and 2102 respectively, they could not have predicted that they’d end up running the company. Fortunately, they were up to the challenge. Shortly after Montgomery joined, the company’s owner, Blaine Tower was diagnosed with terminal cancer. “He asked us if we wanted to take over and run Fair Way,” McCann says. “And of course we said ‘yes’.” Tower had been given a year to live, and wanted to ensure the continuation of his business, which employed four adjusters. He promised to show McCann and Montgomery the ropes from the management side and from the perspective of running an independent firm. “We were both new to the industry,” McCann says. Unfortunately, Tower never got the chance. His year turned into four months, three of which he spent in hospital. Tower died in March 2013, just 10 minutes after McCann and Montgomery had last visited. “So, we never really got ‘the ropes’,” McCann says. “And, from the time we got notice that he had passed, we had 24 hours to incorporate Fair Way, get licensed, get all the licenses transferred to the new Fair Way because you can’t make a phone call without your license.” Montgomery takes up the story: “It was this mad rush to get all our insurance and licenses—all the stuff we didn’t even know we needed actually, ‘cause we’d never run a business before. We had never run an adjusting firm before. And our clients, our insurers that we had business with—the files—they

McMahon has since passed away as well, and now the company consists of McCann and Montgomery, and Norm Schneider, who has been with Fair Way since before they both started. Elaine Goetz provides admin support.

Keeping it real Under Montgomery and McCann’s leadership Fair Way’s business philosophy is to handle claims in a personalized and genuine manner. Th y strive to gain their customers’ loyalty through top quality service and their passion for their work. Although they don’t specialize, “we’re from Saskatchewan so we definitely have farmers,” McCann laughs.

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They also do commercial, cargo, injury and residential claims, across the province. “We all do residential. That’s probably the majority” Montgomery says. “We all like condo claims, believe it or not.” She says the variety of residents in a building makes it interesting, and “what makes it a challenge is condo bylaws are changing all the time, so you really have to be on your game. And sometimes it’s nice to have that claim that makes you think a little harder than some others.”

In the deep end Fair Way joined CIAA in 2015. “We did some research on it and decided it would be nice to be a part of an organization that is for independents,” McCann says. “But we didn’t really know much about it.” The first event they attended was a nomination meeting for the Saskatchewan chapter. “So Lisa volunteered for the vice-presidency.” Th y feel the association is a worthwhile investment of time, and Montgomery plans to continue on the chapter executive. Th y are both enthusiastic about the opportunities such as the conference held in September 2016 for the Saskatchewan chapter. “I feel like the education’s valuable and interesting, and I know that we have already expressed interest in maybe doing an annual education program,” Montgomery says. But the rest is an open opportunity: “I’m not sure what other tasks we’re going to try and take on,” she adds.

Family values They say the staff is like a big family, and when a personal need comes up, it’s acwww.claimscanada.ca

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L-R: Krista McCann and Lisa Montgomery

knowledged that it’s important to take the time away from the office o get it done. “If there’s work, we need to get the work done,” Montgomery says. “But, if you need to go, that’s when you have to take your work home at night.” “Which is something that’s really nice about not just owning a company but as an independent adjuster we have that fl xibility to be able to work whenever we can,” McCann adds. While the two had not met before they ended up working together, their paths had crossed through family connections. But now, the way the two finish each other’s sentences, they sound like close sisters, and in a way, that seems to be how they feel. “We both like to jump in on things, and we have different things that we want to do,” Montgomery says. “We have level heads at different times,” she laughs, adding they they keep each other in check—in a good way. www.claimscanada.ca

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Montgomery also noted that everything seems to get done, by one or the other, without the need to talk about it. Payroll for example, somehow it all gets done, by whichever partner sees the need. “It’s odd; one of us picks it up and the other one doesn’t, and it all works out,” she adds. McCann laughs as she notes that in a claim you can be hashing over details for weeks, but when it comes to deciding on things for the business, “like getting a new computer, it would probably take us both four minutes to decide what we’re doing.” Being close in age helps, they think, plus, “We both have young families and young kids and we both seem to take on a lot of stuff. So we’re kind of similar in that way,” Montgomery says.

Looking for growth A business challenge they are facing is whether and how to grow the

company. Saskatchewan is a small market, making it difficult to find new staff. “Krista and I like to have the stability of a good company, good work,” Montgomery says. “We want to be good employers; we want to be a fun place to work. I don’t think we have anything sparkly, but we have a great paycheque. It’s a good environment and we want somebody who values those things. We don’t want somebody that’s looking for the next bonus.” “Because we are a small business, we have our own files as well as the business aspect of the company,” McCann says, and little time to train a new adjuster. Ultimately, they’re looking for a motivated, smart adjuster who can dive right into the deep end and take over files with a minimum of guidance—in short, someone just like themselves. •

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CIAA 32nd Annual General Meeting and Conference, St. Andrews by-the-Sea, New Brunswick

The Canadian Independent Adjusters’ Association (CIAA) held its 32nd Annual General Meeting and Conference at The Algonquin Resort, St. Andrews by-the-Sea, New Brunswick on September 22 to 25. Attendees gathered for a bustling tradeshow, informative education sessions, social events and the members’ meeting. l

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CIAA REGIONAL PRESIDENTS 2016 – 2017 NEWFOUNDLAND & LABRADOR TBA

NOVA SCOTIA Michael Connolly, BA, CFEI, CIP ClaimsPro 238 Brownlow Avenue, Suite 300 Dartmouth, NS B3B 1Y2 Phone: (877) 514-6269 Fax: (902) 425-9918 E-mail: michael.connolly@scm.ca

NEW BRUNSWICK & PRINCE EDWARD ISLAND Greg Potten, BPE, CIP, CFEI AMG Claims Inc. 212 Queen Street, Unit 308 Fredericton, NB E3B 1A8 Phone: (506) 458-9000 Fax: (506) 458-9595 E-mail: greg.potten@amgclaims.ca

QUEBEC/AESIQ Michel Lacelle, PAA/CIP ClaimsPro 255 Crémazie Est, 2e étage Montréal, QC H2M 1M2 Phone: (514) 340-8959 Fax: (514) 342-5474 E-mail: michel.lacelle@scm.ca

ONTARIO Maria Joshua, FCIP Sedgwick CMS Canada Inc. 5915 Airport Road, Suite 201 Mississauga, ON L4V 1T1 Phone: (905) 671-7805 Fax: (905) 671-7819 E-mail: maria.joshua@sedgwickcms.ca

MANITOBA Craig Shanks, BA, CIP Wheat City Claims Services Ltd. 64 Regent Cres. Brandon, MB R7B 2W9 Phone: (204) 725-7436 Fax: (204) 725-7437 E-mail: craig.shanks@mymts.net

SASKATCHEWAN Justin Braaten, FCIP, CRM, XAT Capital Claims Adjusters Limited 3500 – 13th Avenue Regina, SK S4T 1P9 Phone: 1 866 550-0516 Fax: 1 866 725-4794 E-mail: justin@capitalclaims.ca

WESTERN M. Doreen Lennon, CIP T&L Adjusters Ltd. #309, 5227 55 Avenue NW Edmonton, AB T6B 3V1 Phone: (780) 463-7776 Fax: (780) 462-1280 E-mail: dlennon@tladjusters.com

PACIFIC Stacy Phillips, B.Comm., CRM, FCIP ClaimsPro 600, 1111 Melville Street Vancouver, BC V6E 3V6 Phone: (888) 681-6331 Fax: (604) 681-6388 E-mail: stacy.phillips@scm.ca

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National Standing Committees 2016-2017 ADVISORY Monica Kuzyk, FCIP, CRM Curo Claims Services 125 Northfield D . W., P.O. Box 218 Waterloo, ON N2J 3Z9 Phone: (866) 952-2876 Fax: (519) 888-9704 E-mail: mkuzyk@curocanada.com Lee Powell 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: lpowell@cl-na.com Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca Paul Féron, FCIP, CRM ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2 Phone: (519) 645-6500 Fax: (519) 645-2250 E-mail: paul.feron@scm.ca Lorri Frederick ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (905) 308-6292 Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca 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 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 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

Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca Patricia M. Battle Canadian Independent Adjusters’ Association/L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Ave. 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

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COMMUNICATIONS Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3, P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: richard@azclaims.ca

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 Integrated Insurance Resources 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@integrated-ins.ca

Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com

Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca

Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 2001 Sheppard Ave. East, Suite 810 Toronto, ON M2J 4Z8 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com

CONSTITUTION & RULES Paul Féron, FCIP, CRM ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2 Phone: (519) 645-6500 Fax: (519) 645-2250 E-mail: paul.feron@scm.ca

Ian Frost, FCIP Wawanesa Mutual Insurance Company 191 Broadway Winnipeg, MB R3C 3P1 Phone: (204) 985-3886 Fax: (204) 942-7724 E-mail: ifrost@wawanesa.com Tim Guernsey RSA Canada 18 York Street, Suite 800 Toronto, ON M5J 2T8 Phone: (416) 366-7511 Fax: (416) 367-9869 E-mail: tim.guernsey@rsagroup.ca Peter Hohman Insurance Institute of Canada 18 King Street East, 6th Floor Toronto, ON M5C 1C4 Phone: (416) 362-8586 Fax: (416) 362-1126 E-mail: phohman@insuranceinstitute.ca

Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Glen Hopkinson Phone: (289) 786-1074 XL Insurance Company SE Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com 100 Yonge Street, Suite 1200 Toronto, ON M5C 2W1 Phone: (647) 277-8650 Craig J. Walker, CIP, FCIAA, FIFAA E-mail: Maltman Group International 2001 Sheppard Ave. East, Suite 810 glen.hopkinson@xlcatlin.com Toronto, ON M2J 4Z8 Dan Langer Phone: (416) 492-4411 CICMA Ontario Chapter President Fax: (416) 492-5657 c/o CIAA E-mail: cwalker@maltmans.com 5401 Eglinton Ave. W., Suite 100 CIAA NATIONAL INSURANCE Etobicoke, ON M9C 5K6 INDUSTRY ADVISORY BOARD Phone : (416) 621-6222 Patti M. Kernaghan, FCIP, CRM Fax : (416) 621-7776 Kernaghan Adjusters Limited E-mail: danlanger@sympatico.ca 300 - 1445 West Georgia Street Vancouver, BC V6G 2T3 Justin MacGregor Phone: 1-800-387-5677 Governor, IBAC Fax: 1-800-387-5644 151 Rose Glen Rd. E-mail: Port Hope, ON L1A 3V6 pkernaghan@kernaghan.com Phone: (905) 885-1551 E-mail: Heather Matthews, CIP, CRM, CIOP 2justinmacgregor@gmail.com Crawford & Company (Canada) Inc. 539 Riverbend Dr. Penny McCune Kitchener, ON N2K 3S3 SGI Canada Phone: (519) 578-5540 2260 11th Avenue Fax: (519) 578-2868 Regina, SK S4P 0J9 E-mail: Phone : 844 855-2744 Heather.Matthews@crawco.ca E-mail : pmccune@sgicanada.ca Monica Kuzyk, FCIP, CRM Curo Claims Services 125 Northfield D . W., P.O. Box 218 Waterloo, ON N2J 3Z9 Phone: (866) 952-2876 Fax: (519) 888-9704 E-mail: mkuzyk@curocanada.com

CAREER RECRUITMENT PLANNING Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3, P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: richard@azclaims.ca

Alex Walker, CIP Aviva Canada 2206 Eglinton Ave. E. Toronto, ON M1L 4S8 Phone: (866) 692-8482 E-mail: alex_walker@avivacanada.com

CONVENTION 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 DESIGNATION/EDUCATION Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA, FIFAA AMG Claims Inc. P.O. Box 20102 Sherwood Charlottetown, PE C1A 9E3 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca Robert V. Pearson, CLA, FCIAA CIAA Honorary Life Member c/o CIAA National Offic 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca Lorne Montgomery CIP, FCIAA, FCLA Crawford & Company (Canada) Inc. 300-123 Front St. W. Toronto, ON M5J 2M2 Telephone: 416-867-1188 Fax: 416-867-1925 E-Mail: lorne.montgomery@crawco.ca EDITORIAL Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Dr. Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca John M. Sharoun, FCIP, FCIAA, CRM Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: John.Sharoun@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

FINANCE John D. Seyler, CIP Integrated Insurance Resources 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@integrated-ins.ca Heather Matthews, CIP, CRM, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca Fred R. Plant, AIIC — ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.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, RF 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 Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com NOMINATING Fred R. Plant, AIIC — ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca Heather Matthews, CIP, CRM, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca Lorri Frederick — ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (905) 308-6292 Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Ph: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 2001 Sheppard Ave. East, Suite 810 Toronto, ON M2J 4Z8 Ph: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com PRIVACY James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Ph: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Keith P. Edwards, FCILA, CLA, FUEDIELAE — ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Ph: (416) 777-4479 Fax: (416) 360-7335 E-mail: keith.edwards@scm.ca PROFESSIONAL PRACTICES Fred R. Plant, AIIC — ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca

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CIAA 32nd Annual General Meeting and Conference, St. Andrews by-the-Sea, New Brunswick

The Canadian Independent Adjusters’ Association (CIAA) held its 32nd Annual General Meeting and Conference in New Brunswick on September 22 to 25. The President’s Banquet and Ball saw outgoing CIAA president Fred Plant pass the reins to incoming president Heather Matthews. Numerous awards were handed out to CIAA members, with Glenn Gibson, ICD.D, CIP, FCLA, FCIAA, CFE, CFEI, receiving CIAA’s Honorary Life Member Award for his selfless contributions to the advance­ment of the CIAA, his peers and all those he has had contact within the industry and beyond. Gibson began his insurance career in 1973 and became an independent adjuster at Adjusters Canada in 1980 before rising through the management ranks to become an integral part of the leadership of Crawford and Company. l

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Coverage for Social Engineering Fraud Takes its Place Among the Required Coverage for Canadian Business BY DAVID S. WILSON, CHRIS MCKIBBIN AND ZACK GARCIA, BLANEY MCMURTRY LLP

Insurance for loss resulting from the use of technology to commit fraud has existed for decades. Since the 1980s, commercial crime policies have included various forms of computer fraud and funds transfer fraud coverage. Similar coverage has been available in fi ancial institution bonds since the 1990s. New forms of fraud have emerged in recent years that do not fit neatly into the existing coverages. Social engineering fraud is the most significant of these new frauds, and occurs when an employee of a business is duped by a fraudster into voluntarily parting with the assets of the business. Some examples include: 1. Phony Client Scams: The victims or targets of these scams are fi ancial institutions or other entities that handle client funds. The target’s employee is induced by email, phone or fax to wire client funds to a “new” account. Verification procedures are either absent or not followed, and the funds are typically unrecoverable. The target must reimburse its client for the lost funds, and then looks to its crime insurer for indemnity. 2. Vendor Impersonation Scams: Th fraudster purports to be a legitimate vendor of the target, and contacts the target’s employee to request that the vendor’s banking information be changed. The victim wires funds to the “new” account. By the time the legitimate vendor follows up with the vic28 Claims Canada

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tim on its outstanding receivables, the funds are gone. 3. Executive Impersonation Scams: Th fraudster, posing as the target’s “CEO” or other high-ranking executive, contacts its fi ance department using a spoof email or similar-domain email, under the pretext of needing an emergency payment relating to a “top secret” acquisition, merger or other situation. The fraudster directs the fi ance department employee to wire funds to a “special” account. The lost funds are typically unrecoverable, and the victim turns to its crime insurer for indemnity. 4. Law Firm Collection Scams: Th fraudster poses as a foreign “client” in a debt collection matter. The “debtor” is in collusion with the “client”. As soon as the lawyer demands payment, the “debtor” promptly issues a (counterfeit) cheque payable to the lawyer’s trust account. The lawyer is instructed to wire the funds (less his or her fee) to the “client”—invariably, on an urgent basis. Once the debtor’s cheque is returned as counterfeit, the lawyer’s trust account is in defic t. Given the limited scope of trust account overdraft coverage under most lawyers’ E&O policies, the lawyer often looks to his or her crime insurer for indemnity. Standard crime insurance policies are not intended to cover social engineering fraud: • Computer Fraud insuring agreements typically only indemnify for unauthorized entries (or “hacks”) into an insured’s computer system. Social engineering incidents typically involve payments initiated by the insured’s employee, albeit on the basis of an inaccurate understanding of the facts. • Funds Transfer Fraud insuring agreements are intended to cover fraudulent transfers caused by a third party direct-

December/January 2017

ing an insured’s fi ancial institution to transfer the insured’s funds without the insured’s knowledge or consent. Social engineering incidents typically involve payment instructions authorized and voluntarily initiated by the insured’s employee and, as such, they usually do not meet the requirements of the insuring agreement. • Crime policies generally contain exclusions for losses resulting from an insured’s voluntarily parting with money, or for losses resulting from authorized entries into an insured’s computer system. In response, the fi st discrete social engineering fraud coverages were introduced in Canada in 2014. Unfortunately, some victims of social engineering fraud have not obtained this coverage and, after incurring a loss, seek indemnity under the computer fraud or funds transfer fraud insuring agreements of their policies. The October 18, 2016 decision of the U.S. Court of Appeals for the Fifth Circuit, Apache Corporation v. Great American Insurance Company,1 is one of the fi st American appellate decisions to consider coverage for a vendor impersonation scam under “traditional” commercial crime policy wording since the widespread introduction of social engineering fraud coverage. In holding that the resulting loss did not trigger indemnity under the computer fraud coverage, the Fifth Circuit adopted the interpretive approach to computer fraud coverage taken by most other American courts, such as the Ninth Circuit in Pestmaster Services v. Travelers,2 and applied it in the context of social engineering fraud. Apache is an oil production company headquartered in Texas and operates internationally. In March 2013, an Apache employee in Scotland received a call from a person claiming to be a represenwww.claimscanada.ca

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tative of Petrofac, a legitimate vendor of Apache. The caller instructed the employee to change the bank account information which Apache had on record for Petrofac. The Apache employee advised that such a change request would not be processed without a formal request on Petrofac letterhead. A week later, Apache’s accounts payable department received an email from a @petrofacltd.com email address. Petrofac’s legitimate email domain name is @petrofac.com. The email advised that Petrofac’s bank account details had changed, and included as an attachment a signed letter on Petrofac letterhead setting out the old and new account numbers and requesting that Apache “use the new account with immediate effect.” An Apache employee called the telephone number on the letterhead and confirmed the authenticity of the change request. A different Apache employee then approved and implemented the change. One week later, Apache began transferring funds for payment of Petrofac’s invoices to the new bank account. Within a month, Petrofac advised Apache that it had not received payment of approximately $7 million which Apache had transferred to

the new account. Apache recovered some of the funds, but still incurred a net loss of approximately $2.4 million. Apache maintained a Crime Protection Policy with Great American. The policy does not appear to have included social engineering fraud coverage. Apache asserted a claim under its Computer Fraud coverage, which provided that:

The Court observed that prior courts had generally refused to extend the scope of the computer fraud coverage to situations where the fraudulent transfer is not a direct result of computer use, but rather a result from other events. We will pay for loss of, and loss from damage to, money, securities and other property resulting directly from the use of any computer to fraudulently cause a transfer of that property from inside the premises or banking premises:

a. to a person (other than a messen- ger) outside those premises; or b. to a place outside those premises. In Great American’s view, this coverage applies when an individual improperly accesses, or “hacks”, into the insured’s computer system and fraudulently causes a transfer of funds, either from the insured’s premises or the insured’s bank’s premises. Thus, no indemnity was available to Apache because the @petrofacltd. com email did not cause the transfers in issue; the loss was not the direct result of unauthorized computer use, but rather the subsequent acts of Apache’s employees. The Fifth Circuit accepted Great American’s position. The Court engaged in what it described as a “detailed—but numbing —analysis” of the authorities interpreting the Computer Fraud coverage. Chief among these was the Ninth Circuit’s recent decision in Pestmaster, in which that Court interpreted the computer fraud coverage to require an unauthorized transfer of funds, rather than simply any transfer which involved both a computer and a fraud at some point. The Court observed that prior courts had generally refused to extend the scope

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2016-12-23 11:13 AM

of the computer fraud coverage to situations where the fraudulent transfer is not a direct result of computer use, but rather a result from other events. In concluding that no indemnity was available under the computer fraud coverage, the Court held that: The email was part of the scheme; but, the email was merely incidental to the occurrence of the authorized transfer of money. To interpret the computer-fraud provision as reaching any fraudulent scheme in which an email communication was part of the process would, as stated in Pestmaster…, convert the computer-fraud provision to one for general fraud…We take judicial notice that, when the policy was issued in 2012, electronic communications were, as they are now, ubiquitous, and even the line between “computer” and “telephone” was already blurred. In short, few—if any—fraudulent schemes would not involve some form of computer-facilitated communication. [emphasis added] Apache is signifi ant to the insurance industry not only because, like Pestmaster, it reaffirms the intended scope of the computer fraud coverage, but also because

it reinforces the purpose behind insurers’ recent introduction of discrete social engineering fraud coverage. In our view, a Canadian court should reach the same conclusion if it were to consider similar facts. As the Court of Appeal for Ontario has held, where there is little or no Canadian authority interpreting language used in standard-form policies in

While insurers have responded by creating discrete social engineering fraud coverages, Apache serves as a cautionary tale of how a business may be exposed to an uninsured loss in the event that it does not maintain such coverage. both Canada and the United States, resort may be had to American authorities to ensure uniformity in construction in both countries.3 The proliferation of social engineering frauds has created a new exposure for

Canadian business. While insurers have responded by creating discrete social engineering fraud coverages, Apache serves as a cautionary tale of how a business may be exposed to an uninsured loss in the event that it does not maintain such coverage. David S. Wilson and Chris McKibbin are partners, and Zack Garcia is an associate with the Fidelity Practice Group of Blaney McMurtry LLP in Toronto. The Group’s practice encompasses all aspects of coverage analysis and litigation involving fidelity bonds, commercial crime policies and financial institution bonds, as well as fraud subrogation work against employees, co-conspirators, auditors and financial institutions. • 1 Apache Corporation v. Great American Insurance Company, 2016 WL 6090901 (5th Cir.). 2 Pestmaster Services, Inc. v. Travelers Casualty and Surety Company of America, 2016 WL 4056068 (9th Cir.). 3 Halifax Insurance Co. of Canada v. Innopex Ltd. (2004), 72 O.R. (3d) 522 (C.A.) at para. 56, citing Zurich Insurance v. 686234 Ontario Ltd. (2002), 62 O.R. (3d) 447 (C.A.) at 461.

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Dirty Windows Help to Clarify Appellate Review of Standard Form Contracts BY MICHAEL S. TEITELBAUM AND TARA CHOWN

Just when you thought the judicial approach to the appellate standard of review for Canadian contract interpretation had been addressed, the Supreme Court of Canada (“SCC”) rendered its decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 (“Ledcor”) on September 15, 2016. Ledcor has created an exception to the Court’s signifi ant decision in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (“Sattva”), which had held that the appropriate appellate standard of review for contract interpretation was the deferential one of palpable and overriding error. The Court’s 2014 decision in Sattva had changed the longstanding law that “correctness” was the applicable standard of review on appeal regarding the interpretation of contracts. Ledcor has now recognized an exception to the Sattva decision with respect to standard form contracts. Writing for the majority, Wagner J. stated that because a decision on the meaning of a standard form contract held signifi ant precedential value, as it was likely to affect a wide range of individuals in the future and not just the contracting parties, and did not involve a meaningful factual matrix, correctness was the more appropriate appellate review standard. The case involved the interpretation of a faulty workmanship exclusion in a Builder’s Risk policy which was important to the insurance and construction industries. In the result, the SCC held as follows: www.claimscanada.ca

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1. Typically, the standard of appellate review for trial decisions involving standard form insurance contracts will be correctness; and 2. Faulty workmanship exclusion clauses in Builder’s Risk policies should be narrowly construed to exclude only the cost of re-doing the faulty work itself and not the cost of remedying the property damage caused by the faulty work. Of note, in his concurring reasons, Cromwell J dissented on the standard of review issue, holding it should still be palpable and overriding error, per Sattva, because factual issues still remain.

Background Station Lands Ltd. retained Ledcor Construction Ltd. as the general contractor for the construction of an offi building in Edmonton. Ledcor properly installed the windows of the offic building. Over the course of construction, the exterior of these windows became dirty from concrete spatter and other debris. As a result, Station Lands and Ledcor (“the Insureds”) hired Bristol to clean the windows prior to completion of construction of the offic building. In carrying out its cleaning, Bristol Cleaning used improper tools and cleaning methods, scratching the windows of the offic building, which ultimately had to be replaced at a cost of approximately $2.5 million. The Insureds sought the cost of replacing the windows under the construction project’s Builder’s Risk insurance policy. The Insurers denied the claim on the basis of the “cost of making good faulty workmanship” exclusion clause (“the Exclusion Clause”) contained within the policy.

The Exclusion Clause contained an exception for “resulting damage” so that it excluded coverage for the “cost of making good faulty workmanship unless physical damage not otherwise excluded by this policy results, in which event this policy shall insure such resulting damage”. The issue at trial and on appeal was whether the Builder’s Risk insurance policy excluded the cost of the replacement of the windows due to the damage caused by Bristol or if the cost of the window replacement fell within the exception to the exclusion. The trial judge found Bristol’s cleaning work constituted faulty workmanship and the Exclusion Clause was, therefore, applicable. However, the trial judge held that the Exclusion Clause was ambiguous and applied the rule of contra proferentem as against the Insurers, finding coverage for the Insureds. On appeal, this decision was reversed and the Court of Appeal held that the damage to the windows was excluded from coverage. In its interpretation of the Builder’s Risk insurance policy and Exclusion Clause, the Court of Appeal applied the correctness standard of review. The Court of Appeal held that the trial judge had improperly applied the rule of contra proferentem because the Exclusion Clause was not ambiguous. In order to determine whether physical damage was excluded as the “cost of making good faulty workmanship” or covered as “resulting damage”, the Court of Appeal created the “physical or systemic connectedness” test. By applying this new test, the Court of Appeal concluded that the damage to the windows was excluded from coverage because the damage was not accidental or

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fortuitous, but was directly caused by the intentional scraping and wiping motions involved in the cleaners’ work.1

The Supreme Court of Canada Decision The Appropriate Standard of Review: Mixed Question of Law and Fact vs. Question of Law In interpreting the Exclusion Clause as excluding coverage of the cost of recleaning the windows, but covering the cost of replacing the windows, the SCC was given the opportunity to modify its decision in Sattva. The SCC rejected the Court of Appeal’s “physical or systemic connectedness” test as unnecessary and concluded that the appropriate standard of review on appeal is correctness, where the appeal involves the interpretation of a standard form contract, the interpretation at issue is of precedential value, and there is no meaningful factual matrix that is specific to the particular parties to assist the interpretation process.2 In Sattva, the SCC had held that contractual interpretation is a question of mixed fact and law subject to deferential

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review on appeal for the following two reasons: the importance of the factual matrix and that contractual interpretation does not fit within the definition of a pure question of law. The SCC has now held that these reasons were not applicable to standard form contracts.

Wagner J. was of the view that the interpretation of a standard form contract has precedential value and, as a result, can fit u der the defi ition of a pure question of law. In Sattva, Rothstein J. held that “contractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of

December/January 2017

the factual matrix”.3 Therefore, the standard of review of palpable and overriding error applies to a trial court’s interpretation of a contract.4 However, Wagner J. distinguished the factual matrix in Sattva from the situation in Ledcor, as Sattva did not involve a standard form contract, but was instead a complex commercial agreement between two sophisticated parties. Wagner J. held that the importance of the factual matrix carries less weight in cases involving standard form contracts because there is typically no meaningful negotiation of terms between the contracting parties entering into Builder’s Risk insurance policies, as the contract is typically presented to the potential Insured on a “take it or leave it” basis. Wagner J. was of the view that the interpretation of a standard form contract has precedential value and, as a result, can fit under the definition of a pure question of law. In support of this proposition, Wagner J. referred to Rothstein J’s acknowledgment in Sattva that correctness is the applicable standard of review for the “‘rare’ extricable questions of law that arise in the interpretation process, such as

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‘the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor’”5

Policy Interpretation: Broad Coverage In its analysis, the SCC found that the Exclusion Clause was ambiguous and saw no reason to depart from the governing principles of general contract interpretation as summarized in the Court’s decision in Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, [2010] 2 SCR 245 (“Progressive Homes”). In applying the Progressive Homes principles, the SCC confirmed that the Insured has the onus of first establishing that there is coverage, at which point the onus shifts to the Insurer to establish that an exclusion applies, and finally, if necessary, the onus shifts back to the Insured to prove an applicable exception to the exclusion. In his interpretation, Wagner J. relied heavily on commentary with respect to the purpose of Builder’s Risk insurance policies and the reasonable expectations of contracting parties in the construction

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industry that coverage under these types of policies will be broad in nature. In support of this proposition, Wagner J. stated that the overall purpose of Builder’s Risk insurance policies was established by the Court in Commonwealth Construction Co. v. Imperial Oil Ltd., [1978] 1 S.C.R. 317

In rejecting this proposition, the SCC held that it would be unreasonable to expect an owner or general contractor to consider this a relevant factor in deciding how to allocate work tasks. (“Commonwealth”); namely, to “provide certainty and stability by granting coverage that reduces the need for private law litigation… [and] also recognize[s] the complexity of industrial life and largescale construction projects that involve

many different individual contractors”.6 The SCC concluded that interpreting the Exclusion Clause to only exclude from coverage the cost of redoing any faulty work, did not transform the Builder’s Risk insurance policy into a construction warranty, and also aligned with the commercial reality of the construction industry and commercially sensible results, as well as the parties’ reasonable expectations. Of note, the SCC majority rejected the Insurer’s argument that endorsing an interpretation which held that the exception to the Exclusion Clause applied would promote commercially unreasonable behaviour because it had the potential to influence how future work on construction sites is divided among various contractors and sub-contractors in an effort to maximize coverage. In rejecting this proposition, the SCC held that it would be unreasonable to expect an owner or general contractor to consider this a relevant factor in deciding how to allocate work tasks. Having established that the Exclusion Clause served to exclude from coverage only the cost of redoing the faulty work; namely, the cost of re-cleaning, the win-

December/January 2017

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Going forward, when considering an appeal on a question of contractual interpretation, it appears the main question will be: are the contractual provisions at issue “standard form”?

dows, by applying the general principles of contractual interpretation, the SCC held that it was not necessary to turn to the contra proferentem rule.7

Conclusion and Future Implications The Ledcor decision creates an exception to Sattva for standard form contracts with respect to the appropriate appellate standard of review. Ledcor holds that when interpreting standard form contracts on appeal, correctness applies. Ledcor also settled in the affirmative the issue of whether or not the exception to the exclusion of faulty workmanship covering resultant damage can include damage to the part of the construction project that the Insured is working on. The application of the standard of review of correctness when interpreting standard form contracts is also consistent with the mandate of appellate courts, namely to ensure consistency in the law. By confirming the precedential effect of the interpretation of a standard form contract, the SCC clearly had the intention of reducing the need for litigation. However, it remains to be seen whether Ledcor may have the opposite effect. First, the result of applying this interpretation in future cases remains uncertain as it will depend on the particular facts of those cases. Second, and somewhat ironically, the Ledcor decision may increase litigation for a number of reasons. For example, subject to revisions being made to the policy wordings, the seemingly potential increase in liability for Insurers under a Builder’s Risk insurance policy this decision creates may increase litigation as the facts of each case are assessed. www.claimscanada.ca

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Further, the lack of deference to trial decisions by applying the correctness standard also lends itself to an increased frequency of appeals as well. Finally, in the weeks following the Ledcor decision, the SCC remanded two insurance-related cases, Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Co. and Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc. to Courts of Appeal for disposition in accordance with its Ledcor decision, i.e., to address what the appellate standard should have been and in Acciona, to also address the interpretation of the faulty workmanship exclusion in that policy. We understand that there is no standard form for Builder’s Risk, or indeed Commercial General Liability, policies, with the wording varying between insurers, unlike for example, a government-mandated automobile policy. Therefore, what is “standard” is not necessarily common across the board. This also raises the interesting question whether one can have a standard clause within a manuscript policy which should also be decided using the “correctness” test. Overall, Ledcor will likely reduce inconsistent holdings with respect to interpretations of the same or similar wording within standard form contracts, even if the frequency of appeals may not diminish. Finally, the Court in Ledcor recognized that there may be circumstances where a standard form contract may still continue to attract the Sattva deferential standard of review. Arguably, a deferential standard may apply where parties to a standard form contract conduct some degree of negotiation and, as a result, change specific terms, or make amendments or

additions to the standard form contract. Going forward, when considering an appeal on a question of contractual interpretation, it appears the main question will be: are the contractual provisions at issue “standard form”? When in doubt as to the answer, one should ask if one of the parties was offered the contract on a “take it or leave it” basis, as this is likely to indicate it is a standard form contract and, therefore, should be reviewed on the basis of correctness. • Michael S. Teitelbaum is a partner with Hughs Amys LLP. Many thanks to Tara Chown, a student-at-law in Hughes Amys LLP’s Toronto office, for her excellent assistance in the preparation of this article. 1 Ledcor at para 15. 2 Ibid. at para 4. 3 Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para 50 [“Sattva”]. 4 Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19, [2016] 1 S.C.R. 306 at paras. 21-24. 5 Sattva at paras. 53 and 55, quoting King v. Operating Engineers Training Institute of Manitoba Inc., 2011 MBCA 80, 270 Man. R. (2d) 63 at para 21. 6 Supra note 1 at para 68. 7 By contrast, Cromwell J. also dissented on this point and found the exclusion was ambiguous and required application of the contra proferentum doctrine to interpret it. Reading the clause against the Insurers, he agreed with the result reached by the majority. The Court majority also observed that its interpretation was consistent with how faulty work exclusions in liability policies have been applied. This comment should be noted when addressing coverage under such policies.

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2016-12-23 11:17 AM

Environmental Losses

Related to Transportation Claims BY JOEL VAN POPTA, M.SC. P.GEO.

In the context of motor vehicle claims, auto claims make up a significantly larger portion of total claims than trucking claims; however, the potential damages and quantum of a trucking claim far exceed that of a typical auto claim. Trucking incidents typically present greater potential for vehicle damage, personal injury, and collateral damage. This collateral damage can include cargo damage or loss, damage to roadway infrastructure or environmental impairment associated with the loss of motive fuel, lubricants or other fluids, including hazardous cargo. Not all trucking collisions result in environmental impairments, but when they do, the costs to remedy the impairment or restore the natural environment can be signifi ant. The quantum of damages associated with environmental impairment can be orders of magnitude larger than other aspects of a claim. Contaminant impacts and environmental impairments can be associated with motive fuel from the vehicle saddle tanks, motor oil or lubricants, coolant or brake fluids and even the cargo itself. In

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some situations, products that may not typically be considered pollutants (e.g sawdust, salad dressing, or molasses) become pollutants when released into the environment. In Ontario, for example, Part X of the Ontario Environmental Protection Act, R.S.O. 1990, Chapter E.19 (EPA) defines ‘pollutant’ as any solid, liquid, gas, odour, or combination thereof, resulting directly or indirectly from human activities that causes or may cause an adverse effect. Certain exemptions apply and are outlined in Ontario Regulation 675/98 Classification and Exemption of Spills and Reporting of Discharges. However, if there is a release to a surface water body or if the release has the potential to adversely affect groundwater, regardless of the volume spilled, the exemptions do not apply. The spill must be reported to the appropriate jurisdictional bodies and the adverse effects of the spill must be addressed, consistent with the polluter’s obligations to mitigate the adverse effects and restore the natural environment as stipulated under Part X of the EPA.

December/January 2017

A carrier transporting hazardous material would be trained in response procedures and have specific emergency plans in place to respond to an incident involving the release of hazardous material to the environment. Remediation of the adverse effects of the loss and restoration of the natural environment would be required. The same requirements apply in cases where the cargo itself is not considered a potential contaminant. As mentioned, a seemingly safe product can signifi antly impair the natural environment. Whether the loss is associated with diesel, kerosene, or milk, remediation would be required to restore the natural environment. In addition to environmental impact from motive fuel or cargo loss, trucking collisions can cause collateral damage to infrastructure and lead to environmental impairment. A collision could destroy a retaining wall, leading to erosion of a stream bank, which in turn causes a release of sediment to the stream, changing the quality of surface water and affecting a fish habitat. Environmental impairments may result from other circumstances unrelated to a spilled material. In the assessment of damage there are advantages to using a multidis-

www.claimscanada.ca

2016-12-23 11:21 AM

ciplinary approach; having an eye for the potential damage (environmental, roadway infrastructure, among others) is key in coordinating an appropriate response. Also, the variety of factors that lead to a loss require a perspective that considers road design, road maintenance, mechanical failure, and human factors, among other influences. Coordinating a timely response is fundamental to mitigating the extent of environmental damage resulting from a release to the natural environment. A prompt response can often reduce the extent of impact from a release. While the migration of fuel to the environment is dependent on specific surface, soil and groundwater conditions, the longer the pollutant persists in the environment, the farther it can and will migrate. Having said that, the early response should be appropriate to the circumstances. A fundamental factor in mitigating costs associated with environmental cleanups is to delineate the emergency response stage from the project remediation stage. The emergency, or early response stage is intended to mitigate damage and environmental impairment by removing accessible impacts to near surface soil or surface water. Depending on the size of the loss, the early hours or days of the response will be focused on mitigating environmental impairment. Often, special rates and premiums will apply. Depending on the size of the loss, the emergency response phase could be completed in the fi st few hours or days after the spill occurs. In other cases, 24-hour monitoring is required for some time after the loss. In either case, it is prudent to push the project out of the emergency response stage as quickly as practicable. In the context of mitigating remediation costs for the insured, a prudent approach would consider the assessment of background conditions in the vicinity of the loss to evaluate the potential for preexisting impacts, unrelated to the current loss. An evaluation of ‘pre-loss’ soil or surface water quality may identify impacts to certain media associated with an historical release, which was not remediated. Also, in an urban environment, baseline or background petroleum hydrocarbon and heavy metal impacts to roadway drainage ditches from runoff are not unexpected. Assessing background conditions helps to focus the remediation on the subject loss and mitigates the potential for remediating unrelated impacts. Restoring the natural www.claimscanada.ca

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environment to the ‘pre-loss’ condition can be challenging enough without the burden and cost of remediating unrelated impacts to soil or surface water. In summary, taking a comprehensive and proactive approach to assessing and mitigating a loss, evaluating possible existing impairments in the context of the subject loss, and transitioning a project out of emergency response, are key factors in reducing the exposure resulting from an environmental loss associated with a trucking claim. Certain principles of emergency

management and remediation are foundational to an appropriate and prudent response to environmental losses, however, the application of these principles will be specific to the site conditions. Each event will present a unique set of challenges. A successful resolution will be dependent upon an appropriate application of sound response and remediation procedures. • Joel van Popta, M.Sc., P.Geo. is a Senior Associate serving the Environment discipline at -30- Forensic Engineering.

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December/January 2017

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2016-12-23 11:22 AM

How Data Empowers Cutting-Edge Claims Processes BY DARA BANGA, FCIP, CFEI

It’s no revelation to say that insurance companies are leaning on analytics to optimize their processes. Payhow-you-drive pricing in automobile insurance is the obvious example. The “addition of behavioral and third-party sources was a signifi ant leap forward from the claims histories, demographics, and physical data that insurers analyzed in the past,” said McKinsey & Company. There’s a difference, though, between incorporating data and making the most of it. “Currently, 42 percent of insurance companies use big data techniques in their pricing, underwriting and risk selection processes,” said Property Casualty 360. “In two years, that number will jump to 77 percent, according to a 2016 Towers Watson report.” All fine and good—using analytics to transform pricing and underwriting is an excellent step. But what about claims? As it turns out, deeply integrated data has the potential to transform the claims process for insurers of all lines, just as behavioral analytics transformed risk selection for automobile insurance—saving thousands of dollars per claim if leveraged properly, or if leveraged, perhaps more importantly, at the right moment. LexisNexis Risk Solutions wanted to 40 Claims Canada

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understand how claims outcomes might be affected if adjusters had the benefit of data earlier in the process, from first notice of loss. To find out, they conducted a study, aptly titled “More Data, Earlier.” Broadly speaking, the impacts were positive. “When carriers collect more data, earlier in the claims process, they experience signifi ant benefits in cost and efficiency,” said Todd Fannin, Senior Director of Auto Insurance Claims at LexisNexis Risk Solutions.

The secret to shorter claim cycle times The study examined the claims of several carriers that were ranked among the top 20 by A.M. Best. To be precise, it examined 10 million of their claims features, dividing these into two categories: those that had more data at first notice of loss, and those that had less. These were not sophisticated data, such as the stats on a driver’s hard braking habits in usage-based automobile insurance models. The data of which we speak was quite simple, and narrowly defined: • Telephone number • Name • Address • License plate The monikers “more” and “less” were also clearly defined. “More data” meant a phone number, plus any two of the other items on this list. “Less data” meant either a phone number and one other item; or,

December/January 2017

alternatively, all the items on the list except for the phone number. What LexisNexis found is this: When claims had the benefit of more data, sooner, their cycle times were shorter, and their costs much less. By “shorter” and “much less,” we mean, for example, that with third-party bodily injury claims, cycle times were five to 15 percent faster and 47 percent less expensive on average, with legal fees being signifi antly lower as well, by 25 to 49 percent.

The simple data advantage How did something so rudimentary as a full contact sheet and a license plate number result in so much improvement? There are several factors at play here. When the basics are in hand from first notice of loss, they begin a ripple effect that spreads to the very end of the cycle. 1. The claim is directly routed to the most appropriate place, without being bounced around first. 2. The adjuster wastes no time updating a file more than once or trying to find missing information. 3. The adjuster has the opportunity to connect with the claimant sooner, which lowers their odds of having to deal with legal fees later. Each of these factors plays a role in streamlining the claims handling process and making negative outcomes less likely. www.claimscanada.ca

2016-12-23 11:23 AM

That means a great deal at a time of deep industry disruption and fierce competition.

In context: the challenges of today’s market Why is it so important to increase the data available to claims adjusters? In short, because times are changing fast. Here are just a few examples, drawing from the model Majesco developed to describe where the industry is now, and what it must do to move forward. 1. Market makeup. The people that make up the market are changing in just about every way imaginable: age, demographic population size, financial standing, familiarity with social and mobile tech, expectations of customer experience—no matter which part of this you look at, it’s clear we’re in the midst of a giant market shift. 2. Market boundaries. Established insurers must fight for position in an industry whose boundaries are blurring. Gone is the clear-cut definition between one area and another; today, we live and move in business ecosystems. 3. Industry givens. The conventional business model relied on aggregates and historical data. These days, we have risk-based pricing, personalized parameters, value-added services and omni-channel distribution. In such a landscape, claims adjusters face competing, if not mutually exclusive, responsibilities. They must deliver excellent customer service, while ferreting out fraudsters (a $30 billion problem according to Deloitte), while cutting costs. To make matters tougher, low interest rates and a staffing shortfall force carriers to tighten their belts even more. “Simply put, traditional claims-handling processes do not offer the comprehensive insight, responsiveness or flexibility that is needed to compete in today’s market,” the LexisNexis study concluded.

If just the four data points of telephone, name, address and license plate can create such a signifi ant difference, as it did in the LexisNexis study, imagine the impact of even more data points, such as:

While data has long been used as an acquisition tool for underwriting, risk selection and pricing, it should now expand into an operational role, in claims. • Policyholders’ cell numbers or social profiles so they could immediately text or message the policy holder when home phone lines are out of service; • Electronic home and business inventories and scanned purchase receipts; • Data generated by connected home devices showing average temperatures, HVAC activities, entrance and exit

times and alarm activations for a home or commercial building; • A database of current replacement cost values for commonly claimed items, detailed by brand, purchase year and geography. While data has long been used as an acquisition tool for underwriting, risk selection and pricing, it should now expand into an operational role, in claims. Of course, there are privacy issues to navigate. Nevertheless, forward-thinking insurers and independent adjusting firms recognize that information is power. In claims, more data could hold the secret to reduced cycle times, improved customer satisfaction and improved policyholder retention. Policyholders are won and lost every day based on the quality of the claims experience. With more data, insurers can empower adjusters to earn a competitive advantage when it matters most. • Dara Banga, FCIP, CFEI, is the President of DSB Claims Solutions, headquartered in Brampton, ON.

Data presents a solution Data and analytics present a straightforward solution, offering efficiency and insight where the need for both is acute. The claims process has traditionally been fraught with inefficiency. Adjusters spend “a signifi ant part of their day on manual activities that do not directly affect the resolution of the claim, resulting in multiple case touches, higher costs and longer cycle times,” LexisNexis said. www.claimscanada.ca

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• on the scene OTS Kabir Shaal has been appointed Executive Director of The Restoration Contractors’ Organization of Canada (RCOC) and will work closely with the Board on RCOC’s various projects and initiatives. Ken Tucker has completed his term as Chair of RCOC and will be replaced by Will Cook, President, Belfor (Canada) Inc. Belfor is one of the founding Kabir Shaal members of RCOC and Will has been on the RCOC Board of Directors since inception. Mike Sully (On Side Restoration) is retiring from the RCOC Board. ● Crawford & Company (Canada) Inc. has been selected, for the tenth consecutive year, as a Top Employer in the Waterloo Region by Canada’s Top 100 Employer competition. The competition recognizes employers in the Kitchener-Waterloo and Guelph area that offer exceptional workplaces. Crawford was chosen for many reasons, including its mentorship and continuing education program, its impressive benefits packages, its share purchase and profit-sharing plans, and its involvement in the community through Crawford Cares initiatives such as the Global Day of Service national food drive and various fundraising events for the Women in Insurance Cancer Crusade (WICC), the Canadian Cancer Society’s Relay for Life, and other local charitable activities. ● SPECS Limited has introduced many new members of their appraisal team. The new members of the team include Clark VanPeteghem, Justin Booth, Steve MacGregor, Dan Plouffe, Dave Smale, Sean MacLean, Nicholas Charlton, and Eric Jones. Justin Booth has over 22 years experience that includes quantity surveying and general contracting on projects of all sizes, including disaster restoration. Nicholas Charlton is an accomplished professional with IICRC and RICS certification and over 30 years experience, including project management, facility management, and construction estimation. Eric Jones joined SPECS as a Branch Manager and brings with him over 23 years of restoration and general contracting project management experience. Dan Plouffe is a seasoned construction professional with over 20 years of project planning, management, and hands-on residential and commercial construction experience. Dave Smale started his career 30 years ago as a carpenter and progressed to project and team management of a well-respected regional construction company and has significant project planning and management experience. Sean MacLean holds a Bachelor’s degree in Architectural Science, as well as a Masters of Architecture degree. Steve MacGregor, has over 20 years experience as a senior project manager capacity for one of the largest restorations companies in British Columbia. Clark VanPeteghem has a proven track record of providing accurate and detailed post-loss appraisals and is an accomplished licenced helicopter pilot as well. ● 42 Claims Canada

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December/January 2017

Graeme Jones has joined the Vericlaim Canada team as an independent adjuster, bringing with him seven years of adjusting experience. His areas of expertise include residential and commercial property claims, and personal and commercial liability. His background, and his current role at Vericlaim, focuses on communication with policyholdGraeme Jones ers throughout the claims process, as well as investigation, evaluation, negotiation, reporting and settlement. Graeme has earned a Bachelor of Arts degree in Political Science from Simon Fraser University. He also holds the Chartered Insurance Professional Designation and a membership with the Insurance Institute of Canada. ●

CIAA New Members — July 2016 CORPORATE MEMBERSHIP Brandon, MB

Wheat City Claims Services Ltd. INDIVIDUAL MEMBERSHIP

Coast Claims Insurance Services Craig Gamble Nanaimo, BC Level 1 Jaysson Greenfield Campbell River, BC Level 1 Laura Warwick, CIP Victoria, BC Level 2 Discovery Claims Services Ltd. John Finnerty Surrey, BC Level 2 Stephen Freeman Surrey, BC Level 1 Kirk Kennett Surrey, BC Level 1 Milton (Brent) Yerla, CIP Surrey, BC Level 3 PCA Adjusters Limited Victoria Tims, CIP Ottawa, ON Level 2 T & L Adjusters Ltd. Keira Wilding, CIP Edmonton, AB Level 2 Wheat City Claims Services Ltd. Craig Shanks, BA, CIP Brandon, MB Level 3 ASSOCIATE MEMBERSHIP Alaska Adjusters, LLC Dotson & Associates, LLC Martin A. Brown R.K. Phillips and Associates, LLC

Anchorage, Alaska Richmond, Kentucky Fayetville, Arkansas Houston, Texas

CIAA New Members — September 2016 INDIVIDUAL MEMBERSHIP Integrated Insurance Resources Mississauga, ON Level 1 Aaron Castillo, CRM Leading Edge Claims Services Fonthill, ON Level 3 Craig Ozog, CIP, CFEI

www.claimscanada.ca

2016-12-23 11:26 AM

First General North America is pleased to welcome V. Charles Sabourin as Vice President, Business Development. Based in Quebec, Charles will also act as liaison for Quebec and the Maritimes and Atlantic provinces. In his role Charles will focus on business development and operations, assist with the implementation of the regional, national and global catastrophe plans and liaise with affiliates in Eastern Canada and Quebec. He has experience developing and marketing networks within the disaster restoration industry. He is a ChAD certified trainer for CEC’s and a Certified Risk Manager from McGill University with a full roster of IICRC courses. ●

Mike Bennett, CIAA Central Nova Scotia Director, presents Ashley Johnson of Intact Insurance with the CIAA Nova Scotia Region Award, which she won for Highest Result in C110 Essentials of Loss Adjusting, N.S. ●

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DKI Canada is proud to announce the addition of Renew Disaster Cleanup & Restoration to the organization. Renew DKI has provided property restoration services in Regina, Weyburn and Moose Jaw, Saskatchewan and surrounding areas for over three years. Renew DKI is a full-service property restoration company; restoring both residential and commercial property losses resulting from water, fire, smoke, wind, vandalism, trauma and mould damage. “Renew Restoration DKI has developed a strong reputation in their local market based on quality and customer service,” said Chris Schmidt CEO of DKI Canada. “I am thrilled to strengthen our coverage in Saskatchewan further enhancing our capacity and expertise in key areas as we increase our geographic footprint to over 80 locations across the country.” ●

December/January 2017

Claims Canada 43

2016-12-23 11:26 AM

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• on the scene OTS

Al Sutherland

Kevin Clarke

FirstOnSite Restoration, an independent disaster restoration services provider, announced three senior leadership appointments. Al Sutherland has joined FirstOnSite as Senior Vice President & Chief Administrative Officer, Kevin Clarke has moved into the newly created role of Executive Vice President – Branch Operations and Jodi Getson is now Senior Vice President – Atlantic Canada. Al joined FirstOnSite in the newly created role of Senior Vice President & Chief Administrative Officer. As FirstOnSite’s CAO, Al will provide operational teams and internal functional teams with a clear path for continued growth. In addition to deep knowledge of the restoration industry, Al brings 20 years’ senior experience in finance, business management, information technology and mergers & acquisitions to this role. Kevin has taken on the newly created role of Executive Vice President – Branch Operations at FirstOnSite Restoration. His key responsibilities include building best practices across all branches that support FirstOnSite’s customer focused initiatives and KPI’s. Kevin is one of the company’s founding members and has been part of the senior management team since its inception. He will also be overseeing the direction of a number of FirstOnSite’s Prairie branches, specifically; Calgary, Edmonton, Grand Prairie, Medicine Hat and Saskatoon. As Senior Vice President – Atlantic Canada, Jodi will be responsible for the success of regional operations while working with Kevin, Al and the national team. Jodi is also a company founder. She previously served as Vice President of Operations in Atlantic Canada. Jodi was also a key member of the leadership team during FirstOnSite’s mobilization and restoration efforts in Fort McMurray. ● Jodi Getson

CIAA New Members — October 2016 INDIVIDUAL MEMBERSHIP Claimspro Dawn Stewart Jason Ford Stephen Chedore David MacKinnon Christopher Fawcett Debbie Attardo Sean Forgie Richard Smith Richard Pullicino Thibendra Vijendra Saganja Vasanthakumar Chris Wood Lisa Grant Kelvin Ng Julia Gaydarova Nadine Canejo Virinder Sanghera Steve Passi Ana Maria Cameron Joanne Nathan Georgia Siassos Dawn Tuplin Mannie Mokha Joseph Giannini Janet Hess Benny Cheung Ryan Beredo Yinko Cheung Fatimo Chafi Jerry Gerschkow Jeremy Brown Barbara White

www.claimscanada.ca

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Dartmouth, NS Level 1 Dieppe, NB Level 1 St. John, NB Level 1 St. John, NB Level 1 Ottawa, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Mississauga, ON Level 1 Newmarket, ON Level 1 Markham, ON Level 1 Markham, ON Level 1 Markham, ON Level 1 Markham, ON Level 1 Toronto, ON Level 1 Windsor, ON Level 1 Thunder Bay, ON Level 1

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Thunder Bay, ON Level 1 Kenora, ON Level 1 Winnipeg, MB Level 1 Winnipeg, MB Level 1 Winnipeg, MB Level 1 Regina, SK Level 1 Red Deer, AB Level 1 Edmonton, AB Level 1 Fort McMurray, AB Level 1 Fort McMurray, AB Level 1 Fort McMurray, AB Level 1 Fort McMurray, AB Level 1 Lloydminster, AB Level 1 Penticton, BC Level 1 Fort Saint John, BC Level 1 Abbotsford, BC Level 1 Abbotsford, BC Level 1 New Westminster, BC Level 1 New Westminster, BC Level 1 Surrey, BC Level 1 Vancouver, BC Level 1 Burnaby, BC Level 1 Burnaby, BC Level 1 Burnaby, BC Level 1 Terrace, BC Level 1 Victoria, BC Level 1 Cambell River, BC Level 1 Yellowknife, NT Level 1

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Belleville, ON

December/January 2017

Level 1

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2016-12-23 11:26 AM

• on the scene OTS To help kick-off the 2016 RIMS Canada Conference, Calgary, Kernaghan Adjusters held their a senior management team meeting and RIMS Canada Conference Cocktail Party on September 10 at Central 899 Lounge at Le Germain Hotel Calgary. ●

LBC Meaden & Moore International hosted its annual cocktail reception on October 5 at the CN Tower Horizon Restaurant. Clear weather enabled clients and insurance industry participants to mingle while enjoying the spectacular view. ●

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www.claimscanada.ca

2016-12-23 11:29 AM

ClaimsPro’s Specialty Risk Division (SRD) held a Client Cocktail Event on October 6, to introduce its Complex, Commercial & Industrial (CCI) unit. The mix and mingle gave guests an opportunity to learn more about CCI and meet key members of the SRD leadership team, while enjoying the ambience and cuisine of Aria Ristorante in downtown Toronto. �

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2016-12-23 11:29 AM

• on the scene OTS Forensic engineering firm Giffin Koerth unveiled a new brand identity through the introduction of a new name and logo on October 5 at a brand launch held at the Steam Whistle Brewery in Toronto. The new brand signifies growth and transformation and celebrates the firm’s 14-year history. Giffin Koerth will now be known as -30- Forensic Engineering. The new logo is a nod to the early days of newspapers, when reporters would submit their final news copy on typewritten pages where reporters would type DASH-THREE-ZERO-DASH, or “-30-”, at the bottom of the page, to signify to the typesetter that it was the end of the piece. It was a way of saying the facts were all there. Says Chris Giffin, president of -30- Forensic Engineering, “Through our steadfast commitment to being ‘the last word in forensic engineering,’ our new identity is a symbol of this promise.” ●

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www.claimscanada.ca

2016-12-23 11:30 AM

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2016-12-23 11:31 AM

• on the scene OTS More than 1,000 attendees made their way through the exhibit hall to visit the 75-plus exhibitors during the Insurance Brokers Association of Ontario’s (IBAO) 96th Annual Convention and Exhibition, held October 19 to 21 at the Sheraton Centre Toronto Hotel. ●

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www.claimscanada.ca

2016-12-23 11:35 AM

MDD Forensic Accountants hosted their American Thanksgiving Open House on November 24 at Real Sports Bar & Grill in Toronto. Hundreds of insurance claims industry professionals gathered for the annual event that also served as a fundraiser for the Starlight Children’s Foundation. �

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2016-12-23 11:35 AM

• on the scene OTS FirstOnSite Restoration held a Customer Appreciation Night at Grace O’Malley’s in downtown Toronto on November 29. The event which included brokers, insurers, adjusters, engineers, property managers and commercial end-users, was a chance to show appreciation for their support throughout 2016 and a renewed future together. ●

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www.claimscanada.ca

2016-12-23 11:39 AM

The 61st Annual Black Tie Dinner of the Toronto Insurance Conference (TIC) was held November 3 at the Four Seasons Hotel in downtown Toronto. The event was attended by 300 people who enjoyed hearing the views of guest speaker, futurist and digital strategist, Jesse Hirsh. Hirsh owns and operates Metaviews Media Management Ltd., which focuses on research and con­sulting around new media business models, big data and the strategic use of social media. He is also co-founder of the Academy of the Impossible, a peer-to-peer, life-long learning facility. �

www.claimscanada.ca

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• on the scene OTS The property and casualty insurance com­munity gathered for the 19th annual WICC Breakfast for Cancer, held November 9 at the Fairmont Royal York Hotel in downtown Toronto. More than 400 industry profession­als attended the sit-down breakfast and a live panel discussion covering such topics as individual cancer treatment practices in Canada, cancer research and funding. The featured panelists included Bobbie Goldie, cancer survivor and Chubb Canada employee; Dr. Kelly Fathers, senior manager of research communications for the Canadian Cancer Society; and Dr. Uri Tabori, scientist, clinician and a leader in childhood cancer research. The breakfast event chair, Barb Reddick, served as panel moderator. ●

Jim Sinclair, WICC AB

Debbie Demar & Mary da Costa, WICC BC

Cat Pickell, WICC ON

Carole Morin, WICC QC

Following the panel, WICC Ontario co-chairs, Ellen Moore and Marilyn Horrick, announced the award winners for the inaugural WICC 20th Anniversary National Platinum Volunteer Awards. Catherine “Cat” Pickell of Crawford & Company was presented with the Ontario Chapter award for her long-serving dedication to the WICC Ontario Gala event. Thanks and congratulations were also extended to the following award recipients in other chapters: WICC Alberta – Jim Sinclair of Guardian Insurance; WICC British Columbia – Debbie Demar of Marsh and Mary da Costa of The Guarantee; and WICC Quebec – Carole Morin of Travelers. ●

54 Claims Canada

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December/January 2017

www.claimscanada.ca

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ARC Gro network o each

ARC Group Canada is a national network of independent law firms, each intimately connected to their local market.

Insuran

Insurance and risk management Your customer has experts. a list of the vehicles that Regional strength. are covered by your fleet policy.National You have scope. a list of the vehicles that are covered by that policy. That is the ARC Group. And your lists aren’t the same.

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When the one vehicle that is involved in an accident is the one that doesn’t appear on both lists, do you know what happens next?

ARC does.

ARC Group Canada is a national network of independent law firms, each intimately connected to their local market. Insurance and risk management experts. Regional strength. National scope. Go to AskARC.com

The ARC Legal Re Winter Issue – Arti A National Network of Independent Law Firms

When is a medical examination considered a second examin under Rule 36 of the New Brunswick Rules of Court?

The ARC Legal Reporter Blyth v. Crowther and Kelly Reported Case: 2009 NBCA 80 Citation: Winter IssueAt–Issue: Article #1When both the plaintiff’s physical and mental condition are in issue i

the plaintiff undergoes a physical examination, will a subsequent a psychiatric examination be considered an application for a s examination?

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2016-12-22 2:26 PM