Claims Canada February/March 2012

www.claimscanada.ca

February/March 2012

Official Journal of the Canadian Indeépendent Adjusters’ Association

TAKING CHANCES Common Sense Leads to Adjuster Safety

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Contents FEBRUARY/MARCH 2012 • VOLUME 6 • NUMBER

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Cover Feature 12 Taking Chances While adjusters have implemented a number of steps to ensure their safety on scene — with many of the changes related to simple common sense — there is still a long way to go within the profession to ensure better safety for independents.

BY LAURA KUPCIS

Spotlight 18 Committed to Quality MGB Claims Consultants Inc., launched only two short years ago, has made a name for itself by offering responsive, committed and effective claims handling for its clients.

BY LAURA KUPCIS

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Education Forum 40 Adjusting for Angst As psychological injury claims rise, claims adjusters must be aware of the pitfalls in assessing the validity of these claims.

News Features 20 Property Loss Update It is imperative to hire the right experts when file handling, as they can play a key role in the decisions made during the adjusting of the claim.

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BY GLENN GIBSON

28 Alberta Insurance Act Changes Changes to the Insurance Act in Alberta, which come into effect Jul. 1, 2012, will have an impact on claims handling.

BY DELORES THORBOURNE

30 Top 10 Insurance Coverage Decisions from 2011 With rulings on homeowner’s property, CGL, auto liability and D&O liability, the Ontario Court of Appeal was particularly busy this past year.

BY CHRISTOPHER DUNN

Departments

34 Effective Claims Handling

4 First Notice

Implementing the seven habits of highly successful claims handlers can help to ensure policyholders are properly treated and insurers can avoid exposure to extra-contractual damages.

42 On The Scene

BY IAN GOLD

36 The Slip Tester A new tool could prove to be the answer to filling the void in accepted standards and equipment for slip and fall testing.

Columns 40 Education Forum

BY JASON YOUNG and MICHELLE LIVINGSTONE

38 Fighting Fraud Through Financial Documentation It is not only fraudulent claims that cost the insurers and insureds a substantial amount, but so does fighting fraud and the possible risk of punitive damages.

BY MICHAEL SIGSWORTH and DARRELL SHERMAN

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• first notice FN Insurance companies turning down increasing number of requests for assessment and treatment of auto injuries: health care providers Insurance companies in Ontario are now turning down an increasing percentage of requests for the assessment and treatment of serious (non-minor) injuries sustained by motor vehicle accident victims, according to a survey of Ontario rehabilitation providers.

The Alliance of Community Medical and Rehabilitation Providers commissioned the survey, according to a press release on Jan. 19, although as of press time it was not known when the survey was conducted. The Alliance represents approximately 80 companies and about 3,500 health care providers, including physiotherapists, occupational therapists, speech language pathologists, chiropractors, psychologists, rehabilitation therapists, social workers, personal support workers and case managers.

The survey of 1,143 rehabilitation providers found that 42 per cent of requests for treatment are now being rejected — up from only 11 per cent prior to the government’s changes to the insurance system in September 2010.

“That’s a 282 per cent jump,” the Alliance said in the release.

According to the Alliance, the survey

results further demonstrate that insurers are attempting to slot as many claimants into the ‘minor injury’ classification as possible.

“Insurers are now automatically classifying many cases as ‘minor injury,’ even though the health care providers have identified the injuries as serious,” the group says in its analysis of the results. “Survey respondents say more than half of their patients who have been slotted into the ‘minor injury’ category will run out of benefits before they recover.”

Insurers say they are “appalled” the Alliance is pointing he finger of blame at them. The Insurance Bureau of Canada (IBC) said the results of the Alliance’s survey are better understood in the context of the province’s efforts to reduce the number of fraudulent auto insurance claims.

“As Ontario’s auditor general pointed out in his annual report at the end of 2011, there has been an alarming 150 per cent increase in claims costs when the number of injury claims only increased 30 per cent in the same time period (20052010),” said IBC’s vice president for

Ontario Ralph Palumbo. “Is it reasonable that, as stated in the report, accidents are down while claims have increased? It just doesn’t add up.

“The average injury claim in Ontario is about $56,000 — five times more than the average claims in other provinces.

Too many people are using the auto insurance system as a profit-making opportunity. There is a sophisticated network of service providers who use the auto insurance system for their own selfinterest.”

In its statement, the Alliance said it had tried to obtain information about insurers’ denial rates from Health Claims for Auto Insurance (HCAI), which is an electronic system for transmitting auto insurance claim forms between insurers and health care facilities in Ontario.

Unable to acquire the data from HCAI, the Alliance said it elected to survey its members instead. l

Auto body mechanic with no written records of employment deemed to be “employed”: Ontario arbitrator An auto body mechanic who had a verbal agreement with his employer, no paycheque or any other written record of his employment — and who completed only two weeks of work before he was seriously injured in an auto accident — is an employee for the purposes of calculating his income replacement benefits, an Ontario arbitrator has ruled.

Dennis Ferguson was seriously injured in a motor vehicle accident in August 2007 when his car was broadsided by another vehicle. The accident killed his two-month-old daughter, his stepdaughter and his fiancée and left his sixyear-old stepson brain injured.

ING calculated his weekly income replacement benefit at $27.70, based on its contention that Ferguson was “self-employed” at the time. Ferguson,

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on the other hand, said he was a new employee of an auto body and repair shop in Brantford called MS Welding. If employed, he was entitled to $294.12 per week.

Ferguson had his first child with his fiancée in June 2007. His expanding family prompted him to close his own business, DH Custom Auto, which had lost money every year since it had been established in 2005. He began to look for more consistent work to support his family.

Ken Baker of MS Welding hired Ferguson, offering $1,200 per week. Ferguson asked for a cash advance of $1,800 to pay for first and last month’s rent upon his move to Brantford. They agreed he would work off the advance by deducting $200 per week from his salary.

Ferguson worked at MS Welding for only two weeks prior to the accident, at

which point he did not return to work.

ING claimed Ferguson was self-employed at the time of the accident. The insurer argued that Ferguson did not have a written contract with MS Welding; the auto body shop did not remit or make any source deductions off his payment; and Ferguson did not receive a paycheque, nor did he have any pay stubs, appear on the company payroll or have any attendance records to support his employment status.

The arbitrator found Ferguson was indeed “employed,” noting that Ferguson had no ownership interest in MS Welding; he had a set salary and work hours fixed by his employer; he had not worked long enough before the accident for the company to open a payroll account and remit source deductions; and that it was common in the auto body repair business to hire on the basis of verbal, as opposed to written, agreements. l

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REAL VALUE EXPERTS

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• first notice FN New Brunswick court finds plaintiff entitled to Section B benefits because of his inability to concentrate, process information quickly A New Brunswick court has found that a man who suffered a closed head injury in a 2005 auto accident — which resulted in a lack of concentration, an inability to process information quickly and mental fatigue — is unable to engage in any occupation or employment for which he is suited by education, training or experience.

The insurer in the case, Wawanesa Mutual Insurance Company of Canada, paid the plaintiff Section B benefits of $250 per week under the terms of the man’s insurance policy until Dec. 31, 2007 for a period of 108 weeks.

After that time, the insurer discontinued payments based on the following language in the policy: “[N]o payments shall be made for any period in excess of 104 weeks except that if, at the end of the 104 week period, it has been established that such injury continuously prevents such person from engaging in any occupation or employment for which he is reasonably suited by education, training or experience. . . .”

Wawanesa submitted to the court that the plaintiff’s injuries did not prevent

him from engaging in “any” occupation for which he was reasonably suited.

The plaintiff, who was 61 at the time of the accident, worked as a technician for his wife’s orthotics business prior to the accident. He had also tried — and failed — to parlay his interest in fine arts photography into his own photography business.

Wawanesa terminated Section B benefits based on the assessments of the plaintiff made by a psychologist, a neuropsychologist, a neurologist, a psychiatrist and an occupational therapist.

For the most part, these specialists determined the plaintiff was able to work, the court found. The occupational therapist recommended occupations such as a bartender, mail postal and referral clerk or records and file clerk.

Ultimately, however, the court sided with the plaintiff’s family physician in the case. He noted the family physician had seen the plaintiff on an ongoing basis and was more familiar with the severity of the plaintiff’s condition. (The only medical expert in agreement with the insurer’s position who had seen the plain-

tiff multiple times was the psychologist, whose conclusion the judge described as “guarded.”)

The court also cited previous case law in the province’s Court of Appeal, which noted that benefits cannot be discontinued if the injured person is “so sick that he can take on only trivial or inconsequential work, or work for which he is overqualified, or work for which he is completely unsuited by background.”

The full decision can be found at: http://canlii.ca/en/nb/nbqb/doc/201 1/2011nbqb381/2011nbqb381.html l

Estate of pilot who dies in plane crash is not entitled to insurance because the pilot’s medical certificate had expired before the crash The estate of a pilot who died when he accidentally crashed his aircraft cannot collect insurance because the deceased pilot’s medical certificate had expired more than a year before the accident, the Alberta Appeal Court has ruled.

The deceased pilot’s insurance policy, against which the estate made a claim, contains an exclusion clause related to holding a valid pilot’s license. The wording of the exclusion makes no reference to having an updated medical certificate.

Specifically, the policy states that it “applies only if your

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aircraft is flown by an approved pilot… who has the required license… to fly.”

The pilot did have an appropriate license, although his licence was never recovered. The Alberta Court of Appeal had to determine whether the expired medical certificate rendered the pilot’s license invalid. The deceased pilot’s estate argued that it did not.

The Appeal Court noted the law did not require specific language about medical certificates to be included as part of the license. It then reviewed the wording of a standard pilot’s license issued by Transport Canada.

The Transport Canada license included the following wording: “This licence is valid only for the period specified in the medical certificate

(Form 26-0055) which must accompany this licence.”

The court further noted: “the license and the medical certificate are physically the same document. And each by its wording incorporates the other by reference.”

Thus, the court determined, the licence was invalid because of the lapsed medical certificate.

“An expressly conditional license [is not] a license, if the condition is plainly not satisfied,” the court ruled. “Such a paper may be decorative, or a precious souvenir, but it is not a license. … A former license is not a license and does not let one fly. In law, it is wastepaper.”

The full case can be read at: http://canlii.ca/en/ab/abca/ doc/2012/2012abca5/2012abca5. html l

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• first notice FN Psychological and physical impairments can be combined to determine catastrophic impairment: Ontario Appeal Court Psychological impairments can be combined with physical impairments for the purpose of determining whether an injured person meets the 55 per cent threshold for a catastrophic impairment of the whole person, the Ontario Court of Appeal has ruled in Kusnierz v. Economical Mutual Insurance Company. The ruling overturned the opposite finding made by an Ontario Superior Court trial judge.

The Ontario Superior Court judge found that the province’s Statutory Accident Benefits Schedule (SABS) did not allow for psychological injuries to be combined with physical injuries for the purpose of determining catastrophic impairment of the whole person.

The Court of Appeal ruling is of interest to insurers, who have argued that combining psychological impairments with physical impairments effectively expands the definition of catastrophic impairments beyond that contemplated by the legislation. Auto injury victims deemed to be catastrophically impaired are entitled to a limit of up to $1 million in medical and rehabilitation benefits instead of a limit of $100,000.

The appellant in the case, Robert Kusnierz, was involved in a serious single vehicle accident 10 years ago (he was 29 years old at the time). He suffered numerous physical and psychological injuries as a result of the accident, including the loss of his left leg below the knee and clinical depression. The Ontario Superior Court ruled that his psychological injuries should not have been combined with his physical injuries in the assessment of whether he met the 55 per cent threshold for a whole person catastrophic impairment.

But in a unanimous decision by a three-judge panel, the Appeal Court decided Kusnierz in a manner consistent with the Ontario Superior Court’s decision in Desbiens v. Mordini. In Kusnierz, the Appeal Court quoted extensively from Desbiens in support of its finding that psychological impairments can be combined with physical impair-

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

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

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

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

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ments in determining catastrophic injuries under the SABS. “While Bill 59 allows only those who have suffered a catastrophic impairment to recover health care expenses in my view, the text of the Regulation itself indicates that the drafters clearly intended the definition of ‘catastrophic impairment’ to be inclusive rather than restrictive,” the Appeal Court wrote, quoting from Desbiens. “Firstly, as has been noted, the definition of ‘impairment’ as meaning ‘a loss or abnormality of a psychological, physiological or anatomical structure or function’ is extremely broad. Indeed it is difficult to conceive of a more inclusive definition.”

The Appeal Court went on to note the relevant section of SABS, clause 2(1.1)(f), which says: “an impairment or combination of impairments that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person.”

The phrase “combination of impairments” does not rule out the possibility that psychological impairments might be among those to be combined, the Appeal Court found. The trial judge had found that because the terminology “psychological impairments” was absent from this section, they weren’t intended to be among the impairments to be combined.

“The trial judge noted that the SABS legislator could have, but did not, expressly provide for the combination of physical and psychiatric injuries,” the Appeal Court found. “With respect, the opposite is also true. The legislator could have, but did not, expressly forbid the combination of physical and psychiatric injuries.

“Without qualification either way, the plain language of cl. 2(1.1) (f) seems to suggest that combination of both kinds of impairment is possible.” l

Claims Canada

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Gary White Production Manager (416) 510-6760

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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Message from the President La Plume du Président GREG MERRITHEW

Since last reporting to the membership, I have been very active in representing you, our members, at various levels. As an advisory member of the National Insurance Conference of Canada, I have participated on their committee in preparation for the 2012 conference. This high level conference is scheduled for Sept. 30, 2012 to Oct. 2, 2012 in Quebec City. Last year, past presidents Mary Charman and Patti Kernaghan represented CIAA at the conference. They were very impressed with the high caliber of the participants, from insurance company CEO’s to vice presidents of national claims departments. I look forward to attending this year to represent CIAA and its membership.

In October, I attended the CICMA/CIAA joint seminar in Edmonton, Alta. It was very well attended by both company claims staff and CIAA members. The speakers were very informative on issues from accident benefits legislative changes to new court judgments affecting the insurance industry. Some of their papers are posted on the CIAA website for members review. Thanks to Delores Thorbourne, Bea Boutcher and their team for putting in the time and effort to make this event a success.

In November, as an individual member of the International Institute of Loss Adjusters (IILA), my wife, Liz Wyman and I travelled to Queenstown, New Zealand to the annual IILA conference. Although, not a CIAA sponsored trip, I did take the opportunity to discuss with other loss adjusters from around the world, the challenges and future of independent adjusters on a global perspective.

Some interesting trends parallel those found in Canada.

This includes an aging work force within the independent adjusting ranks, resulting from difficulties in recruiting younger professionals to enter the profession of independent insurance adjuster.

We, as a profession, must do a better job in attracting young, bright, energetic individuals to our profession.

Our partnership with the Insurance Institute of Canada (IIC) towards the ambassador program is one avenue that our members can participate towards attracting young people to our profession. If you want to help, let Richard Swierczynski know of your interest and he will facilitate your involvement with the IIC. The National Advisory Committee met in late November, chaired by Patti Kernaghan, to discuss issues within 10 Claims Canada

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Depuis mon dernier rapport adressé à nos membres, j’ai très activement représenté ces derniers à divers niveaux. A titre de membre consultant de la National Insurance Conference of Canada, j’ai fait partie du comité chargé des préparatifs de la prochaine conférence de l’association, qui se tiendra dans la ville de Québec du 30 septembre au 2 octobre 2012. L’année dernière, Mary Charman et Patti Kernaghan, anciennes présidentes de l’ACEI qui nous y représentaient, avaient été très impressionnées par la qualité exceptionnelle des participants, tant les directeurs généraux des compagnies d’assurance que les vice-présidents des services nationaux des sinistres. Je m’y rendrai avec plaisir cette année pour représenter l’ACEI et ses membres.

En octobre, je me suis rendu au séminaire conjoint de l’ACDSA/ ACEI, qui se tenait à Edmonton, Alberta. La présence à cette assemblée, tant du personnel des services des sinistres des compagnies que des membres de l’ACEI, était fort satisfaisante. Les exposés sur les changements apportés aux lois régissant l’assurance individuelle et sur les derniers jugements des tribunaux concernant l’industrie des assurances ont été très instructifs. Quelques-uns de ces exposés sont affichés sur le site Web de l’ACEI, à l’usage de nos membres. Nous remercions Delores Thorbourne, Bea Boutcher, et leurs équipes, qui n’ont ménagé ni temps ni effort pour faire un succès de l’événement.

En novembre, à titre personnel et comme membre de l’International Institute of Loss Adjusters (IIlA), mon épouse, Liz Wyman, et moi, sommes allés à Queenstown, Nouvelle-Zélande, assister à la conférence annuelle de cette association. Quoique ce voyage n’ait pas été financé par l’ACEI, j’en ai profité pour discuter, dans une perspective globale, des défis et de l’avenir des experts indépendants, avec des experts en sinistres venus d’ailleurs dans le monde. J’ai pu ainsi faire d’intéressants parallèles avec la situation canadienne actuelle. Il y a d’abord le vieillissement dans les rangs des EI, parce qu’il est de plus en plus difficile de recruter des jeunes professionnels intéressés à devenir experts indépendants en matière d’assurance.

L’ensemble de notre profession doit faire beaucoup mieux pour attirer des jeunes personnes brillantes et dynamiques. Notre accord de partenariat au programme Ambassadeurs de l’Institut d’assurance du Canada (IAC) devrait permettre à nos membres de s’impliquer davantage pour attirer des jeunes personnes dans notre profession. Vous voulez vous impliquer? Faites part de votre intérêt à Richard Swierczynski qui vous mettra en contact avec l’IAC. Le Comité consultatif national, présidé par Patti Kernaghan, s’est réuni fin novembre pour débattre des problèmes de l’industrie ayant une incidence sur nos membres. Il a surtout été question de www.claimscanada.ca

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the industry affecting our membership. Focus was on education and the continued preparation of our new Chartered Loss Adjuster (CLA) designation. CIAA has formed a core group of senior adjusters who are actively working on the preparation of the course material for the education component and exam component of this undertaking. This designation will only be available to CIAA members. It is CIAA’s intention to market this designation as the “must have” in the independent adjusting profession.

We stay focused on rolling this out by year’s end.

In our January quarterly teleconference with the regional presidents across the country, it appears, on the anecdotal evidence, that claim assignment volumes in Newfoundland show increases, while business is stable in Nova Scotia and New Brunswick/PEI. No storm activity is reported. Ontario is quiet this year with no further weather events since the fall. Manitoba has had a quiet winter, however the work generated by the CIAA contract with the Government of Manitoba for flood assessment has certainly helped. Saskatchewan reports good claims volume with an emphasis on oil and gas, and IA firms are hiring. Alberta is quiet in the urban centers, but has seen some increased activity in smaller centers, such as Lethbridge due to weather events. British Columbia is stable with normal winter claims volumes reported.

Keep safe and healthy. Look after yourself. Be careful out there! n

formation et de la formulation de la future désignation d’expert en sinistres agréé (ESA). L’ACEI a créé un groupe central d’experts chevronnés qui s’activent à la rédaction du matériel didactique pour le volet formation et à celui du volet examen du projet. Cette nouvelle désignation sera réservée exclusivement aux membres de l’ACEI. Nous nous proposons d’en faire l’élément ‘essentiel’ de la profession d’EI dans notre publicité et espérons toujours l’introduire à la fin de l’année.

Lors de notre téléconférence trimestrielle de janvier avec les présidents régionaux du pays, nous avons appris qu’à Terre-Neuve, le volume des demandes d’indemnité a augmenté, tandis qu’il est demeuré stable en Nouvelle-Écosse et au Nouveau-Brunswick/Île du P.-É. On n’y prévoit aucune activité due aux intempéries. Cette année, rien de particulier en Ontario, où aucun événement climatique n’a été signalé depuis l’automne. L’hiver a été normal au Manitoba. Toutefois, le travail généré par le contrat d’évaluation des inondations que l’ACEI a passé avec le gouvernement a certainement aidé nos membres. Le volume des demandes d’indemnité a été important en Saskatchewan, surtout dans les domaines du pétrole et du gaz. Les sociétés d’EI y recrutent du personnel. Il y a eu peu d’activité dans les centres urbains de l’Alberta, mais davantage dans les petits centres, tels que Lethbridge, à cause des intempéries. La situation est demeurée stable en C.-B., où le volume des demandes d’indemnité hivernales a été normal.

Gardez-vous en forme et en santé et, surtout, soyez prudent en toutes choses! n Translation provided by Henry Arcache, Themis Translations, Montreal, Que.

NATIONAL EXECUTIVE 2011-2012 2011-2011 PRESIDENT Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 401 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca

SECRETARY Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com

1ST VICE-PRESIDENT Delores Thorbourne, BA, FCIP Granite Claims Solutions Suite 103 Greystone VII 4208 - 97 Street Edmonton, AB T6E 5Z9 Phone: (780) 442-3077 Fax: (780) 466-0325 E-mail: delores.thorbourne@graniteclaims.com

TREASURER Randy P. LaBrash, CIP, CFE, CFEI Crawford & Company (Canada) Inc. 300 – 191 Lombard Avenue Winnipeg, MB R3B 0X1 Phone: (204) 947-2340 Fax: (204) 943-9168 E-mail: Randy.Labrash@crawco.ca

2ND VICE-PRESIDENT John D. Seyler, AIIC ProFormance Group 2 Robert Speck Parkway, Suite 700 Mississauga, ON L4Z 1H8 Phone: (905) 270-1723 Fax: (905) 272-7486 E-mail: jseyler@prospecialty.ca

PAST PRESIDENT Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca

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EXECUTIVE DIRECTOR Patricia M. Battle Canadian Independent Adjusters’ Association/ L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Avenue West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca DIRECTOR James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca DIRECTOR John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com

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• cover story

TAKING CHANCES

When it comes to safety, independent adjusters have come a long way from years past when safety was not high on the priority list. Now, internal company policies, and a healthy dose of common sense, are relied upon to direct adjusters to make the safest choices when handling claims.

BY LAURA KUPCIS

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djusters are making different choices when it comes to ensuring their safety than they did in the past, but whether it is enough to keep them out of harm’s way remains to be seen.

While an independent adjuster is not rushing into a burning building like a firefighter or meeting strangers alone during a showing of a house like a real estate agent would, they are still

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often put into situations that most other people are not. Adjusters are often one of the first on the scene of a fire loss (after the fire department), traipsing through the charred building. They can be found on the side of the road or highway after a truck rollover or car accident measuring skid marks adjacent to a live lane. Other times they are in the home of a claimant, and while the insurance com-

pany has information on this person, and something of a history, there is still potential for danger if the claimant becomes irate or violent.

But, we’ve come a long way as an industry from where we used to be with respect to adjuster safety.

“I have seen changes over the years — for the better — and improvements in the safety of the adjuster,” said Paul Tiller, vice president of operations for www.claimscanada.ca

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Ontario with Granite Claims Solutions. “I think there is still a long way to go for our industry as a whole in tightening up and making things better and safer for our adjusters out in the field.”

What used to be acceptable There has been, to some degree, a failure over the years to identify safety as an issue of focus with respect to independent adjusters. Part of this, according to Greg Merrithew, managing director or Arctic West Adjusters, is because there aren’t a lot of reports about adjusters being injured on the job site. “As a rule, we are fairly cautious people,” Merrithew, the president of the Canadian Independent Adjusters’ Association (CIAA), said. “We see what happens when people don’t take care of themselves, their equipment and their homes. But it doesn’t mean we are immune to being injured.”

In the interest of getting the job done, adjusters would put themselves in some rather unsafe situations — some that could have immediate ramifications and others that might not pose an issue until years down the road.

“I have been at this for 33 years and I have never done anything safetywise short of doing highway investigations wearing an orange vest,” said Fred Plant, president of Plant Hope Adjusters. “I have gone into burnt-out structures, where I probably shouldn’t have, I have been in some pretty vile conditions on loss situations, that I probably shouldn’t have been around, and I can’t say — because I am not stupid — that I didn’t know the difference. But at the time, I was there to get the job done, so I just did the job and moved on.”

Adjusters would regularly walk into fire scenes without a respirator or any other type of protection. “It was just the industry accepted thing to do,” Tiller said.

“Nobody really questioned it.”

They would walk through breathing www.claimscanada.ca

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the fumes of any number of items or chemicals that had been consumed in the fire. “Three years ago, I know I was breathing in some nice vermiculite,” said David Porter, vice president of the Western region for Granite Claims Solutions. “It really hit home for me, when one of my guy’s came in and said he had lost his dad to mesothelioma, which was directly related to his activities as a contractor working with drywall and the compound.”

Adjusters could also frequently be found climbing up ladders without any safety harnesses, taking photos of a roof after a fire or other loss. They would walk onto a site, without taking stock of their surroundings, leaving them at risk of falling through the floor of a building.

Other times they would head out onto an accident scene where there was a recovery being done and find themselves directly beside a live traffic lane, taking photos and measurements.

Using common sense While there have been some changes in legislation, and companies are realizing the importance of implementing safety procedures and requirements as a means of protecting their adjusters, there is still some onus placed on the adjuster when it comes to protecting their own safety.

A key component is simply common sense.

“We have a job to do, but you are not going to put yourself in harm’s way for the sake of getting a picture or completing the assignment,” Tiller said. “If it is dangerous, you don’t do it.”

The very nature of the job — the fact that every day brings something new — can serve as both a positive and negative of the job. “We are an expert in nothing and have knowledge about everything,” Tiller said. So, for this reason, an adjuster must defer to the experts on site to obtain knowledge about what is happening on a

site. Before even approaching a scene, an adjuster should check with the expert on scene to find out if there are any dangers and what those are. From there, an adjuster can decide whether they should enter the scene with protective equipment on, or wait until a safer time to do so. Blair McGregor, British Columbia regional manager for Kernaghan Adjusters, agrees that gathering information before attending a scene to learn the risks is imperative. “It’s a personal responsibility to assess what you are getting into,” McGregor said. “So you have to do a bit of homework about the processes and premises that you are going into.”

Once on scene, it is a matter of using all the senses to do an assessment of what is involved, he continued. Review any site plans and drawings, and physically review the site.

For John Seyler, president of ProFormance Specialty Claims, there are three categories of exposures that pose serious risks to the health and safety and occupational safety of adjusters. These include: The direct physical risk with insureds and claimants; the workplace exposures; and environmental risks.

“It’s really important for all three categories, for adjusters to do a risk assessment,” Seyler, second vice president of the Canadian Independent Adjusters’ Association (CIAA) suggested. “It’s not any different than a risk manager would assess a risk. The adjuster has to go through the same mental process of risk assessment based on the environment they are entering into.”

Physical risk Interviewing claimants Adjusters are always put into a position where they are meeting strangers, insureds and claimants they don’t know. And no matter the claimant, adjusters are charged with treating them all the same. Which, for the most part, is easy enough — most February/March 2012

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people are courteous and gracious.

However, there are always those that test the limits or, frankly, instil fear in the adjuster.

When doing a risk assessment of the situation at hand, if the adjuster feels at all uncomfortable, they should be meeting in a public place, taking along a second adjuster or having the claimant meet at the adjuster’s office.

Independents have interviewed claimants, not only in strange houses, but at incarceration facilities or in psychiatric institutions.

A claimant might see the adjuster as an adversary to their end goal, making the meeting a confrontational one rather than a simple interview process. While Seyler has never been in a physical altercation with a claimant or insured, he has been threatened, which is “disconcerting.” Generally, he will try and diffuse the situation at first, if someone is yelling and swearing at him, by lowering his voice and not being confrontational in return.

Allow the claimant time to gain control of themselves emotionally. “That is one of the skill sets that an adjuster develops,” Seyler said. “We deal with people and we understand how different people react in different situations.”

If that fails to yield results, and Seyler is still concerned that the situation might get out of hand, he will withdraw from the situation completely and try to re-engage the person at a later date when they have had some time calm down.

When going out to a claim, park on the road, not in the insured’s driveway, with the vehicle pointing away from the premises, McGregor said.

This will ensure that the adjuster can readily access the vehicle and drive away. He has known adjusters who have parked in the driveway and been blocked in. Then, when the situation gets out of hand, they cannot leave the scene. He remembers one adjuster who ran out onto the street to call the police and the people he had been talking to came out and vandalized his vehicle. Another adjuster was sitting in his vehicle after having 14 Claims Canada

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conducted a neighbourhood survey about an accident, when the subject of the accident tapped on his window and “cold socked him.” He had a broken nose, when all he thought was that someone just wanted to ask him a question.

Because adjusters are frequently alone on the road or meeting with claimants at their homes or places of business, many adjusting companies have implemented a policy where adjusters need to check-in frequently.

“Let people know where you are going to be, what you are going to be doing and for how long, so that if you are not back within your appointed time, there can be a follow-up,” said Teri Mitchell, president of the CIAA’s Ontario region.

If an adjuster is “lucky” enough to have a rollover in a large urban area, the fire department will have an environmental or a hazardous response unit, and while they are protecting themselves, they will, by default, be protecting the adjuster.

Workplace exposures While most adjusting companies will take measures to ensure the health and safety of their staff while in the office, ensuring the safety of their staff when out on site is a little more difficult. It is up to the adjuster to do a risk assessment of the situation, whether they are on a fire scene or an accident, and come up with a plan for their own person health and safety on site. This is a two-fold process, one being the adjuster’s personal equipment and the other being the environmental risk. Is there a risk from chemical exposure? Mould?

Organic environmental issue? Is the structure sound?

Building safety There are many dangers an adjuster can encounter on a site as it pertains to building risk. These can include unsafe buildings due to fire or other loss, or entering into a strange building because of a commercial loss.

Jim Eso, vice president of national property and casualty with Crawford & Company (Canada) Inc, points out that recently a Toronto firefighter fell through the floor of a building in what was considered a relatively minor fire. This is not far off from a situation that adjusters might find themselves in. “It’s really a matter of being very aware of our surroundings and our limitations,” Eso said.

“You’re an adjuster, not a construction worker,” McGregor adds.

“You need to look at things, assess, maybe take some measurements and some photographs. You are not there to bang nails in, and you can do a lot of what you need to do from a relatively safe distance. You don’t have to stand on a burnt-out floor to tell that the building is severely damaged.”

An adjuster might end up in a commercial plant or factory trying to understand the workflow in order to fully determine whether there is a resolution to the damage or is it a total loss. While the plant manager understands all the inner workings, the adjuster is putting their safety in the hands of someone else. They are on a shop floor, potentially surrounded by heavy equipment or forklifts. What if there is an emergency? Where are the exits? Are there safety risks? Environmental risks? “You have to be able to, as an adjuster, go in and recognize and assess that risk,” Seyler said.

“Make sure you are taking responsibility for your own personal protection by ensuring you have the right personal protective equipment.”

Having a hard hat and steel toed boots can mean the difference between being safe and being exposed to injury.

Road safety When adjusters are working near live lanes, it is governed by the Ontario www.claimscanada.ca

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Traffic Manual’s Book 7 (Temporary Conditions), which is intended to protect workers and motorists while they are working on a highway, Seyler said. One of the fundamentals of the safety program is setting up a work zone. This could include a warning to approaching motorists that there is a work zone ahead, that there is a safety zone to protect the workers, a transition zone where motorists are leaving the area, and then an exit zone where normal traffic flow has resumed, Seyler explained.

An adjuster who handles transportation claims not only has to worry about their safety with respect to live lanes, but they also have to worry about dangerous goods on site. They might show up at the scene of a tanker rollover and not know what was being transported. There is usually a placard on the truck with Health Canada’s Workplace Hazardous Materials Information System (WHMIS) coding, but an adjuster must have an understanding of what those codes mean.

If an adjuster is “lucky” enough to have a rollover in a large urban area, the fire department will have an environmental or a hazardous response unit, and while they are protecting themselves, they will, by default, be protecting the adjuster, Seyler said.

However, most times an adjuster will arrive on the scene and be granted just as much access as the emergency response professionals, meaning they must understand the dangers: Which way is the wind blowing? Are they downwind from the tanker? Is there an explosion risk? Is there a risk that the adjuster could be overcome with fumes?

Personal safety Adjusters are forever on the move, heading from one claim to the next.

This means a vast amount of time spent in the car. It also means their car is a mobile office. Between logging hundreds of kilometres a week and having to conduct all business from the car on a smart phone, tablet device or laptop, the risks for an adjuster’s safety can compound. The laws across the country have changed www.claimscanada.ca

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over the last year or so, depending on the province, forcing adjusters to only use their phones via a hands-free device. Instead of conducting business while driving from one place to another, adjusters must now pull over and park in order to take notes.

“That’s a big change, because it has an impact on our workflow and on our capacity to take in claims,” Eso said.

“It’s a bit of a game-changer for the adjusters in terms of how they deal

with their day-to-day information flow.”

Ken Lloyd, AVP of head office administration at Crawford & Company (Canada) Inc is quick to remark just how “fortunate” adjusters are — at Crawford alone there are hundreds of adjusters on the road on any given day, all of them facing potential hazards, yet there are, thankfully, very few accidents. In fact, Lloyd can think of only one in the last 12 months,

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February/March 2012

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which was an adjuster who slipped and fell in a parking lot on a winter day.

Unfortunately, McGregor lost a friend who was killed in a car accident heading out to a claim on a snowy day last year.

While companies do try and instil the importance of car maintenance and snow tires, they only have so much control over an adjuster’s personal property. Thankfully, the tragedies and accidents are few and far between, McGregor said.

Environmental risks When entering a building, home or plant, there are any number of chemicals, solvents or other toxic substances an adjuster could face. Once again, step one is to do a risk assessment to recognize the hazards that are in the particular situation.

Airborne dangers When entering a fire scene, wear a respirator. Everything has been burning for who knows how long, and walking in assuming that there is simply the smell of smoke, can leave the adjuster at risk for any number of issues. “The challenge is, you don’t know, as an independent adjuster, when you are first going into these loss sites what’s in the atmosphere on a fire loss,” Merrithew said. “You should always wear respiratory gear when you go into a contaminated atmospheric environment, including sewer backups.” This does not mean a painter’s mask, Merrithew points out. There are any number of particulates out there, that are biological in nature, that will penetrate a painter’s mask.

Adjusters should invest in a properly fitted mask with respiratory ventilators.

“There are particles in the air that are floating around, you don’t know if it’s got asbestos in it, you don’t take the chance,” Porter said, adding that even in a smoky environment without asbestos, the adjuster’s lungs are “toast” after walking through that scene.

If an adjuster is out on a site where there is toxic gas, a respirator won’t cut it and they should leave the scene.

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“Unless they are properly certified for that particular environment, they need to know where the line is drawn,” Eso said. “To a degree it’s intuitive, because our adjusters are trained to want to help people. Everybody wants to get the information about what caused the (event). But sometimes it is a matter of personal safety needing to come first. That’s something we reinforce to our adjusters on a regular basis during their training.”

Company training Training is essential. The end result is an adjuster who recognizes that they are valued by their employer who has invested the time to protect them, and has a knowledge base for the types of hazards they might encounter.

Everything has been burning for who knows how long, and walking in assuming that there is simply the smell of smoke, can leave the adjuster at risk for any number of issues.

Merrithew has identified eight areas of training that an adjuster should receive: • fire losses; • biological losses; • mould and asbestos contaminated sites; • motor vehicle accident investigations; • roof claims; • water and sewer backup in confined spaces; • the occupational health and safety act in an adjuster’s jurisdiction; and • WHMIS. “The principals of adjusting companies, whether they are large or small, should recognize that the

safety of their employees is a priority,” Seyler said. He notes that health and safety should always be a priority and companies should have a plan in place, which includes training.

“Doing dangerous goods training is essential in trying to protect our most important asset, which is our people,” he said. “Not only is it the responsibility of the employer to do that, I also think that this training facilitates better adjusters who are more knowledgeable.”

Granite Claims Solutions has implemented an orientation program for employees — with all new hires going through the program, as well — which includes a section on safety, where a variety of different scenarios an adjuster might find themselves in are discussed. Any new legislation will be sent out to field staff from human resources through the vice presidents of each region.

Crawford & Company (Canada) Inc. also offers corporate knowledge and management centre courses, which promote safety and training for adjusters. There is a focus on loss site safety, which covers a number of areas, including property losses, driving, scoping, being out in the field and ensuring the right equipment is on-hand. For new hires, there is a week-long training school, of which part of that includes safety. This includes going over what an adjuster should and should not do when they are on the job and what they should have at all times in their car in a storage bin to ensure that they can do their job safely.

During the training, Steve Scullion, director of training and employee development at Crawford & Company (Canada) Inc., will go over a number of scenarios with the adjusters that they might come across in the course of their work. How would adjusters respond to a particular situation? What are the precautions they would need to take to ensure their safety? What is the best way to approach the claim? It offers tips on what to do from a practical perspective, as well as what tools an adjuster might need to complete their job. www.claimscanada.ca

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For its part, CIAA’s Ontario region will be discussing, at a future meeting, what adjusters might want to have on-hand to ensure their protection and safety. This list will be posted online for easy access for members, Mitchell said.

“The main thing I would like to see overall, through our various professional organizations, some sort of rules set down for safety of adjusters specific to our industry. We are exposed to so many different things,” Tiller said.

“We do have a job to do, but the safety comes far before completing the assignment,” Tiller said. “We don’t want somebody being permanently injured, or worse yet killed, just trying to get the job done.” 

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Adjuster Tool Kit For a road adjuster, having a tool kit in the trunk of the car can help to protect both their health and safety. This tool kit would be modified depending on the types of claims a particular adjuster is handling or the area they are servicing.

Some suggestions for what to include in the kit are: • safety boots — this includes steel toes, steel soles and insulating • disposable Tyvek suit or coveralls • respirator — i.e. an N95, a properly fitted respirator with interchangeable filters, a hepa filter mask • protective glasses or goggles • ear plugs • hard hat • flashlight — one with adequate lighting • first aid kit • safety vest • extra batteries • work gloves • leather gloves

• winter clothing, including gloves and a toque • latex/rubber gloves • warning cones • flashing amber lights • flares • dry matches • candles • blankets • snacks • car accessories, i.e. jerry can, oil, tire kit for a flat tire • cell phone charger • list of emergency contacts • maps • change of clothes

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• spotlight S

Committed to Quality

MGB Claims Consultants Inc., launched only two short years ago, and has made a name for itself by offering responsive, committed and effective claims handling for its clients.

BY LAURA KUPCIS

T

wo years of hard work and planning meant that when the Toronto-based MGB Claims Consultants Inc. launched it was able to avoid any of the usual new business hiccups.

That doesn’t mean there wasn’t a learning curve: the founding partners were trained adjusters, but none had ever run their own business before.

There was no relying on someone in human resources to handle the hiring, or someone else to fix the broken photocopier. But there has never been that 18 Claims Canada

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‘what do we do now, something really bad happened’ moment.

The company opened for business on May 3, 2010, with the three partners — Shawn Burnett, Shawn Malik and James Giffen — using the Starlight Gala on the previous Saturday night as a means to showcase their new venture. Not much has changed since then staffing-wise, they are still the three principal partners, though they did hire a junior adjuster, Justin Do, and a senior liability adjuster, Paul McKenna, in 2011. An office manager

and two support staff round out the team.

While they would like to bring on an intermediate adjuster, finding the right fit is key. “Being a small office of eight people, if you hire the wrong person, there is nowhere to hide, you see that person every day,” Burnett said.

“They have got to have the right personality and work ethic, so it could be another year before we find that person, or next month. You never know.”

Giffen added that they “would rather work harder and not have someone www.claimscanada.ca

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who doesn’t fit in, than to just hire someone to relieve our workload.”

And while they hope to be a larger company in the next five years, they are not willing to grow simply for the sake of growing.

Specialized services “We are a boutique firm,” Malik said.

“We specialize in larger or more complex losses, so it just depends on finding the right people that fit with us, that also want to do the same type of work.”

And a very specialized type of work it is. MGB Claims services the commercial and industrial markets — which is a very limited marketplace — that means if they don’t grow staffing-wise, the three partners will be travelling a lot more.

“We’d rather have the right files for MGB, than just take every file that comes through the door,” Burnett said.

But this niche market is the forté of the founding partners: They have all spent upwards of two decades working with, and learning from, some of the most well-regarded large-loss focused adjusters in the country. Looking around, they saw a need for a boutique firm that specialized in these types of losses, as there were very few junior adjusters coming up the ranks in this field.

Investing in the future “The only way we can really take the time to train and mentor younger adjusters is if we are the owners of the company,” Burnett said. “Then we have a vested interest to train people. As our other adjusters get busier, we can concentrate on the specialized claims that we want to deal with or start moving up in terms of the larger, more complex global claims. This way we actually have adjusters trained in the way we do things to come up behind us.”

And while there are no guarantees that MGB trained adjusters will not jump ship, they do realize that making people feel like they belong in a company is a huge key to keeping good staff.

If they are involved in the business and understand the goals and focus — in addition to having a stake or being a stakeholder in the firm — adjusters are more apt to stay than seek out opportunities elsewhere. www.claimscanada.ca

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“The financial reasons are not why someone is going to leave or stay, it’s going to be the work atmosphere, the culture, the type of work,” Burnett said. “The people that we want to hire should want to learn from us like we benefitted from our mentors and actually make a career out of this versus just having it be a job.”

Making work fun There is also no micro management in the firm; staff are afforded a lot of flexibility. As long as the job is being

completed — and is being done properly and thoroughly — then staff are able to head off for an afternoon game of golf, or take an extra long weekend.

Not to mention, the constant joking and bantering among the staff. “We spend, according to our wives, far too much time together,” Giffen said.

“Part of the reason we went out on our own was the common work goals — but also socially we were friends and a good fit,” Burnett added. “Because our client base is smaller we have to know our clients very well, so there is an important social aspect.

We are reluctant to hire someone who does not share our enthusiasm — even though they might be good at what they do — and are not much fun at the office. Keeping the right chemistry in a small office is very important.”

But in and amongst the joviality, serious work gets done — and gets done well. Staff can frequently be found bouncing ideas off each other to de-

termine the best course of action with respect to a claim.

“When our clients give us a loss, they are not worried about whether it is going to go south,” Giffen said. “They feel very confident that it will be dealt with to the best of their interests.”

“We pay attention to detail and we look at every little penny that is being spent to see if it’s reasonable,” Malik added.

“We don’t like to surprise them,” Giffen said.

Finished product The company is busy and running strong nearly two years after its launch with very little marketing, short of word of mouth.

The three partners do travel to the United Kingdom to meet with representatives in the London markets, and they are working more closely on the non-traditional markets, such as reinsurers, captives and self insureds — especially on the equipment breakdown side of the business. “That’s looking very positive,” Giffen said of the new direction the company is taking.

But short of that, the company has relied on selling themselves as high quality adjusters and what they put out in terms of a finished product — including accurate, timely and concise reporting — to continue to differentiate themselves and earn the trust of new clients and retain that of existing ones.

They are also able to serve their clients across the country due to the network of relationships they have with other Canadian Independent Adjusters’ Association (CIAA) partner firms. Being a member of the CIAA has brought a number of benefits to the company, the biggest is the ability to network and liaise with other member firms.

Furthermore, when the company was forming, they needed to work with the Financial Services Commission of Ontario (FSCO) to obtain licensing.

The CIAA was able to ensure that the partners were in touch with the right person and that they had everything needed to get up and running. They are now looking into the E&O discounts afforded to CIAA members. Membership is more than worthwhile for this boutique firm.  February/March 2012

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Property Loss Update

BY GLENN GIBSON

For the past 20 years, I have had the pleasure of both developing and participating in a unique training school. The course is a six-day program that is cosponsored by the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and the International Association of Arson Investigators (IAAI).

The course name is, “Complex Arson Fire Investigation Techniques for the Insurance Industry” (CAFITII).

The course is hosted at the Federal Law Enforcement Training Center (FLETC) in Brunswick, Ga. This is a secure training facility for U.S. federal law enforcement agencies.

Normally, non-law enforcement personnel are not allowed on the base.

When the program was more than 25 years ago, there was a huge ‘arson for profit’ problem in the United States.

Arrest rates were low and the conviction rates even lower.

Punitive and aggravated damage awards were attracting very significant sums. How could the authorities and insurers cooperate but stay within their respective rules? Two outcomes resulted from the initial partnership: 1. The joining up of these two organizations helped create the momentum that saw the creation of the first “arson immunity” regulations. It started with a few U.S. states and eventually snowballed across the entire country. These new rules created a pathway for insurers to provide information from their investigation files to the authorities. In return they were immune from civil ‘bad faith’ lawsuits from their policyholders.

2. The CAFITII training program was created. Instruc20 Claims Canada

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tors are the very best that ATF and the IAAI could provide. The course is designed to embrace the very best of adult-oriented, interactive learning programs. The ultimate goals are to elevate the skill level of the students so everyone would benefit from a stronger, more professional work product.

The last class hosted 47 students from the police, fire and insurance sectors, including four students from Canada.

Their evaluations ranked the program at 94 per cent. The curriculum includes: • effective selection and use of fire experts; • civil versus criminal investigations; • reciprocity and exchange of information; • NFPA 921; • spoliation: preservation of evidence; • financial investigation basics; • fire science: electrical fires; live demonstrations in fire cells and on the explosives range; • Visual Link Analysis / software programs / IT as an investigative tool; • interviewing techniques; and • effective cross-examination of an expert witness A key feature of the week-long training is a practical exercise that runs over two days. The students are required to work in “teams” on a real case. The case study methodology of teaching is a powerful learning tool for the students.

One challenge raised in class during the open forum is, “Rather than be concerned about how you will defend yourself from a bad faith lawsuit, how will your file prove that you acted in good faith?” Think about that subtle, but www.claimscanada.ca

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rather significant, shift in perspective, which could apply to any claims investigation.

Some student comments from the program: • “The course demonstrated how evidence leads any investigation. There should not be preconceived ideas.

You always need an open mind.”

• “The case management program is exceptional value for any adjuster how is handling complicated losses.”

• “This training program has great value to any professional loss adjuster.”

• “What a great week of learning what I thought I already knew.”

It is difficult, in my view, to find a better training program in North America to upgrade the skills of property loss adjusters. Our corporation has graduated more than 60 loss adjusters from this program. The registration cost is $750 / student.

For more information, go to www.arsoninsuranceschool.com.

Thomas v. Aviva Insurance Company, New Brunswick Court of Appeal, October 27, 2011 The initial trial on this matter covered two days and resulted in a seven-page written judgment. The Appeal Court decision exceeds 44 pages.

On Dec. 15, 2007, an accidental fire caused about $24,000 damage to a modest home in Saint John, N.B. The source of the fire was the failure of an insulated flue on a wood stove.

Coverage for the loss was denied based upon statutory condition #4: a failure to disclose a material change in the risk. The denial of coverage was communicated in writing on Dec. 27, 2007. The named insured was 74 years old and had a hearing disability. He lived alone and relied on old age pensions for income. He graduated grade 6 at the age of 16. The original trial judge concluded that the insured had “some interruptions or difficulties with his elementary education.”

The insured purchased his policy of insurance through a broker on Apr. 12, 2001. This broker had viewed the home, but the application for insurance was completed in the broker’s office. He asked questions, which the insured answered. The insured signed the application, in which he affirmed that the dwelling’s “primary heating system was electrical.” He reported that he never read the policy and didn’t remember ever getting a copy.

The insured installed a wood stove in the back porch of the house to supplement the home’s electrical heating in 2001. He replaced this original stove with another given to him by a friend in 2006. The insured said he did not contact his broker about the wood stove because “I thought it was okay to have a wood stove because the house was electrically heated.”

24HR

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For six renewals, the insurer sent a subjectively appreciate the wood stove’s The insurer also notice to its insured. Part of the notice materiality for risk purposes.” provided information included a warning that the insured Reference was made to the wordat the original trial needed to ensure that “all the informaing of the policy renewal document. tion is accurate” because the coverage They highlighted wording used by anindicating they would and premium were based on the origiother insurer in the case of Jackson v. not have provided nal information that had been proCanadian Northern Shield Ins. Co. The insurance for a house vided. The Appeal Court noted that, language of this document was more “none of the yearly renewal notices explicit in what they felt constituted a with this woodstove made any reference to wood stoves.” material change in risk. as it was not The broker provided an affidavit to The New Brunswick Appeal Court the original trial, which the Court of paid considerable attention to a growprofessionally Appeal referenced in detail in its deing body of cases that suggest: approved or installed. cision. The broker confirmed he had 1. How does an insured know what is a done business with this particular material fact unless they are specifically insured for more than 30 years. Prior advised by the insurer? to the fire, he had no idea that the insured had installed a 2. If an insurer fails to ask a question, is it not reasonable wood stove. He did, however, make an important comment: to draw an assumption that the information was irrel“I have never received a memo or letters from (the insurevant? er) providing information on what the company considers The Court of Appeal affirmed the decision of trial judge a material change in risk. I have never told policyholders, Justice H. H. McLellan and allowed the insured’s claim. including Hubert Thomas, that the installation of a wood Case summary stove could void their policy or that they have to contact me This is a very well written decision. It contains the Court or the insurance company if they intend to install a wood of Appeal’s guidance to underwriters that suggest how they stove.”

The insurer also provided information at the original might word their renewal notices to policyholders.

In the initial trial, a claim was also advanced for general trial indicating they would not have provided insurance for a house with this wood stove as it was not professionally ap- damages. This related to the emotional distress the insured had suffered as a result of his claim being denied. The trial proved or installed.

The trial judge felt the insured did not know adding the judge dismissed this claim. When an appeal was launched by wood stove might be considered a change material to the risk. the insured, it cross-claimed for general damages, but prior He did not feel the insured had the requisite “guilty knowl- to the Appeal Court hearing the case they decided to disconedge” and indicated that this particular insured “ . . . did not tinue this part of the action.

22 Claims Canada

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February/March 2012

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Despite some “less than convincing evidence” from one of the insureds, the trial judge felt the insurer had failed to prove, on the balance of probabilities, that the insured’s were responsible for setting the fire.

Pietrangelo v. Gore Mutual et al, Ontario Court of Appeal, Feb. 23, 2011 I previously reported on this decision. A rental property was destroyed by fire when the tenants were converting a half-pound of marijuana into oil. The main question in law was whether or not the marijuana exclusion in the policy of insurance could be applied.

The Court of Appeal agreed with the trial judge that the policy language was not ambiguous, the exclusion was not unjust or unreasonable and the intent surrounding the exclusion was to specifically deal with marijuana grow houses.

There was a great deal of evidence in the original trial about the manner in which the policyholder was notified of the addition of the marijuana exclusion. Great attention was also paid to the process in which the insurer sent out mail. There are several very good tips within this case that all insurers should take note about.

The plaintiff lawyers appealed this decision to the Supreme Court of Canada, but they were recently advised that the top court in our nation would not hear any further appeal.

Sidhu v. Wawanesa Mutual Insurance Co., B.C. Supreme Court, J. Armstrong, Aug. 17, 2011 This decision was released six months after a 10 day trial.

The trial only looked at whether or not the claim was covered.

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This case involved what was thought to be an intentionally set house fire at 1 a.m. on Feb.7, 2005, in Surrey, B.C. The insurer denied coverage based on the intentional act exclusion. The onus was on the insurer to prove, on the balance of probabilities, that it had strong evidence to support the three elements of the arson triangle: Was the fire cause incendiary (arson)? If yes, did the insureds have motive? If yes, was there exclusion or ample opportunity?

Seven people lived in the house on the night of the fire: the parents, three young children and one set of grandparents. Most of them were asleep in the dwelling when the fire was discovered by one of the insureds.

The named insureds were Gurmit and Hardip Sidhu. The husband had been trained as an auto mechanic and ran an auto repair business. His wife was not employed and had health issues that prevented her from giving evidence at the trial.

This decision outlines, in significant detail, the evidence of several members of the Sidhu family who were in the house on the night of this fire.

Fire department investigators and private experts retained by the insurer concluded this was an incendiary fire.

At trial, there was conflicting evidence as to whether or not the fire was initiated inside or outside the dwelling. The insureds felt it was highly improbable that one of their family members would put everyone’s life at risk by initiating this fire.

The trial judge gives a lengthy, thorough explanation of how he viewed motive and opportunity. Despite some “less than convincing evidence” from one of the insureds, www.claimscanada.ca

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the trial judge felt the insurer had failed to prove, on the D.M. Drugs et al v. Baywater et al balance of probabilities, that the insured’s were responsible Ontario Supreme Court, Nadeau D., for setting the fire.

Jul. 27, 2011 After allowing the damage claim, the trial judge turned his attention to whether or not to award “punitive damThis decision resulted from a 12 day trial in North Bay, ages.”

Ont., as a result of a major fire that took place on Feb. 5, Whiten v. Pilot Insurance Company is the leading au- 2002. The smell of smoke was first detected around 1 p.m. thority on punitive damages in Canada. The case was ref- The fire department was quickly on scene, observing that erenced in detail by the trial judge. The decision spells out the fire was in a basement furnace room beside the chimthe duty of an insurer to a policyholder to investigate and ney. That fire was quickly knocked down, but this older assess the claim on its “ . . . merits and in a balanced and building had “balloon construction” and the firefighters reasonable manner.” Part of acting appropriately is that the had great difficulty catching up with the rapid spread of the insurer must be interpreting and communicating decisions fire. Eventually, the building was destroyed.

During the trial, the judge heard testimony from 16 witto the insured in a timely manner.

The judge seemed to focus on three things when view- nesses and 87 exhibits were introduced into evidence. The judge paid considerable attention to the firefighter’s obsering the handling of the claim: 1 At a meeting in March 2005, a decision was made vations and those of other non-expert witnesses. He relied upon their evidence when considering to undertake a follow-up invesexpert evidence from a number of fire tigation. It did not appear this experts. additional work was ever comInvestigators from The Office of pleted. the Fire Marshal concluded this fire 2. There was no evidence that a was of an “undetermined cause.” A proof of loss had been sent to the number of fire experts also testified. insured until February 2007 — This became a “battle of the fire extwo years after the fire. perts,” the judge commented.

3. The claim was not denied until Four private fire investigators also two years after the event and only gave evidence. The judge noted that: in response to a legal action being “ . . . the Court requires that an exstarted.

The trial judge pert witness provide independent asAn award of $50,000 was made sistance to the decision-maker by way against the insurer for punitive damwent on to conclude, of objective, unbiased opinion in reages. on the balance of lation to matters within their experA claim was also made for “aggraprobabilities, tise. An expert witness should never vated damages.” Was their mental disassume the role of an advocate . . . ” tress caused by the manner in which that the fire originated The judge was very critical of the this claim was handled? The judge in the basement evidence he heard from several of the found the evidence introduced on this fire experts. The judge’s comments on near a vent pipe point was inadequate and unconvincsome of their evidence included: ing. No award was made on this head connector that •“(He) . . . demonstrated little respect of damage. led to a boiler. for differing views and he would absoCase summary lutely not concede in his opinion even During a trial, cases may get betwhen confronted in cross-examinater or worse as witnesses provide their tion with evidence clearly contradicting his testimony. evidence. The trial judge is weighing the credibility of each . .” witness. Are they believable? In this trial, the judge high• “His cross-examination is replete with examples lighted some issues, but clearly he did not feel the insurer showing his reluctance to answer even the most direct had crossed the threshold of proving its case on a balance questions without a rambling, partisan reply.” of probabilities. Once that decision is made, the focus • “It became obvious the battle of the experts was beturns to all the intricacies of the quality of the investigacoming quite personal . . .” tion and file handling. A lot of attention was focused on • “I did not find (this expert) to be fair, objective and the proof of loss. Was it sent or delivered to the insureds non-partisan.” in compliance with the Insurance Act? The adjuster said The trial judge went on to conclude, on the balance of it was provided to the insureds, but was not able to prove probabilities, that the fire originated in the basement near a this in court. vent pipe connector that led to a boiler. He also concluded The case highlights the need for timely denial of cover- there was reasonable evidence that the fire resulted because age. If you fail to do so in a timely manner, you are exposed of the negligence of one codefendants, who the judge found to punitive damages. had failed to maintain and inspect the boiler. www.claimscanada.ca

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Case summary Given that the public authority concluded the fire cause was undetermined, this was probably an uphill battle to prove negligence against the firm who serviced the boiler. When you add such diverse opinions of a variety of fire experts, this trial was certainly a challenge for the judge.

But, in reading the case, it is very clear that he paid attention to the evidence of the eyewitnesses — particularly the

firefighters. The judgment highlights what can happen when a judge feels an expert does not provide independent assistance to the court. Experts are not advocates of the party who called them.

1369349 Ontario Inc. v.

Yanch Heating et al, Ontario Supreme Court, McIsaac J, Mar. 14, 2011

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February/March 2012

This was a 10 day trial arising from a major fire that occurred at a commercial building in Barrie, Ont. on Jun. 28, 2004. The lawsuit was against an electrical firm who had installed an electrical cable two weeks prior to the fire.

As was true in the previous case described, the trial judge also referred to this case as a “battle of the experts.” Everyone seemed to agree the fire originated in a utility room.

One expert, acting for the building’s insurers, felt the fire originated at a penetration point where the electrician had passed the electrical cable.

The other expert, acting for the electrician, felt the fire was triggered by an undetermined event that took place in the ceiling area of the utility room.

An attempt was made to break the impasse between the two original experts by bringing in a third expert.

This expert eventually concurred that the point of origin for the fire was where the electrical cable penetrated a window opening.

The trial judge concluded that, on the balance of probabilities, the fire originated at the window penetration caused by the installation of electrical cable two weeks before the fire. But the judge put a lot of weight behind the direct evidence of the electrician who did the installation. Clearly, this witness impressed him. The judge said: “In the final result, although I have some suspicions about the quality of the installation and as to the overall credibility of the defendant, these concerns do not rise to the sufficient level to cause me to not accept his denial of professional negligence in this case. I am satisfied that the appropriate standard of care has been met, and accordingly, that the inference to the contrary has been rebutted.”

Case summary It is interesting to see the trial judge agree on the origin area by relying on the two building insurer experts, but on the other hand attribute a great deal of credibility to the evidence of the lay witness (electrician). www.claimscanada.ca

Official Journal of the Canadian Indeépendent Adjusters’ Association

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A trial involves real people. The judge weighs credibility. Who does he believe? What weight should he give to certain evidence? In this case, the judge seemed to be favoring the building owners, only to swing in a different direction.

Conclusions Experts play a key role in the decisions we make on our files. It is very important to hire the right experts. I have written and commented on this issue repeatedly in the past 15 years. If anyone wishes a copy of my previous article on this topic, including a checklist of things to ask before you retain your experts, please send me an email.

Consider the question, “How can I prove I acted in good faith on a file?”

These questions should form part of any file review: 1. Did you provide your insured with a timely, thorough investigation? a. Have you eliminated or confirmed ALL investigative leads? b. Could someone argue that you had tunnel vision very early in the file and did not keep an open mind? c. Do your file notes and reports reflect this mind set?

2. Are you open and transparent with the insured on the results of your investigation and timely with informing them of a decision?

If you deny a fire claim for an “intentional act,” you are alleging your insured has committed a criminal act. While the civil burden of proof ask you to prove your case on the balance of probabilities, make no mistake: The standard of proof when alleging a criminal activity is elevated and will more resemble a burden nearing “beyond a reasonable doubt.”

Does your evidence meet that test?

3. Who was present when you made a decision to deny coverage? a. Were detailed notes taken of this meeting? b. What evidence was reviewed? c. Can you show specifically the information you relied on to make that decision? d. Does your file reflect that you did not make this decision lightly? www.claimscanada.ca

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e. Did you challenge the quality of your own evidence?

Have you considered a peer review of the file? Having a third party expert review the file is one way to show you were acting in good faith.

Some things to think about.  Glenn Gibson is the executive vice president, global strategy, projects and development, with Crawford & Company.

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February/March 2012

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Alberta Insurance Act

Changes

BY DELORES THORBOURNE

A number of changes to the Insurance Act and related regulations in Alberta coming into effect July 2012, which will impact the handling of claims. Some of these changes are: changes to the limitation periods, notice of retainer by plaintiff’s counsel, disclosures of policy limits in motor vehicle accident claims, a rewrite of the statutory conditions for P & C contracts, a revised dispute resolution process, some new rules relating to conditions, terms and warranties in insurance contracts, court ordered advance payments to plaintiff’s in motor vehicle accidents and new rules for communication via electronic transactions.

Limitation period (Fair Practices Amendment Regulation) The current limitation for property and automobile policies in Alberta is one year. Effective Jul. 1, 2012, it will be two years, bringing it in line with the Limitations Act. The requirement will be that within 60 days of a notification of a claim, or five days from when a claim is denied, the insured and/or claimant will be advised in writing of the limitation.

The exception to this is when a claimant is represented by counsel. This will only apply to claims which occur on or after Jul. 1, 2012.

Notice of retainer by plaintiff’s counsel and disclosure of policy limits in motor vehicle accident claims (Fair Practices Amendment Regulation) Currently plaintiff’s counsel is not required to advise they are retained in an action arising out of an automobile accident or that a Statement of Claim has been filed. The 28 Claims Canada

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rules change for both parties, effective Jul. 1, 2012. Plaintiff’s counsel will be required to notify the defendant’s insurer, within 30 days of filing a Statement of Claim, that they act for the plaintiff and the defendant’s insurer will be required to reveal the existence of a policy of automobile insurance and disclose the policy limits. However, the judge or jury will not be privy to the information.

Revised dispute resolution process (Fair Practices Amendment Regulation) Currently the Insurance Act in Alberta provides a process for arbitration, however it is not widely used. The new dispute resolution process will be amended to strengthen consumer protection.

According to the Act, either the insured or the insurer may demand, in writing, the other’s participation in a dispute resolution process after proof of loss has been delivered to the insurer. Within seven days of receiving or giving a demand, the insured and the insurer must each appoint a dispute resolution representative. Within 15 days after their appointment, the two representatives must appoint an umpire. The representatives must determine the matters in dispute by agreement and, if they fail to agree, submit their differences to the umpire. The written determination of any two of them determines the matters.

Each party to the dispute resolution process must pay the representative whom the party appointed, and each party must bear equally the expense of the dispute resolution process and the umpire.

The dispute resolution process will be defined in sect. 519 of the Act. Once an insurer is aware of a dispute they must give written notice to the insured of the dispute resolution www.claimscanada.ca

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process within 10 days. Once a proof of loss is submitted by the insured the insurer has 70 days to respond. The written notice to the insured must contain a copy of sect. 519 of the Act. The superintendent will be providing names of umpires to both insureds and insurers so that the process will be fair and less arduous than the court system.

Court ordered advance payments to plaintiffs in motor vehicle accidents (Fair Practices Amendment Regulation) The court can order an insurer to make an advance payment to a plaintiff who is allegedly entitled to recover damages from a tortfeasor’s motor vehicle liability policy when the plaintiff is “unable to pay for the necessaries of life” or if the “payment is otherwise appropriate,” under sect. 581 effective Jul. 1, 2012. The court may make the order in advance of giving judgment.

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New rules relating to conditions, terms and warranties in insurance contracts Sect. 545 clarifies that if a contract contains a stipulation that may be material to the risk, the stipulation is not binding on the insured if it is held to be unjust or unreasonable by the court.

The re-write of the New rules for communication via Insurance Act electronic transactions in Alberta has been Sect. 547 will allow electronic transactions permitting insurers and insureds to on-going since the use modern technology, effective Jul. 1, mid-90’s and is 2012. An exception, which would require a written transaction, would be to cancel intended to provide transparency, fairness, an insurance policy or if a beneficiary to a life insurance policy is being made. innovation and The re-write of the Insurance Act in Alberta has been on-going since the harmonization.

Rewrite of the statutory conditions for P & C contracts Currently the Insurance Act of Alberta mandates that conditions are included in every fire insurance policy. Statutory conditions will be included in every multi-peril property policy, effective Jul. 1, 2012.

A number of the current exclusions will remain unchanged, however there will be a few new ones added. These are biological, chemical or nuclear energy hazard, resulting www.claimscanada.ca

from fire or explosion caused by terrorism and also fire or explosion damages caused by terrorism, but only in contracts providing coverage on commercial property.

mid-90’s and is intended to provide transparency, fairness, innovation and harmonization. For a complete copy of the Act and related regulations please refer to http://www.finance.alberta.ca/ publications/insurance/alberta-insurance-act.html  Delores Thorbourne is a branch manager with Granite Claims Solutions in Edmonton.

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Insurance Coverage Decisions from 2011

BY CHRISTOPHER DUNN

The Ontario Court of Appeal was particularly busy this past year, while the Supreme Court of Canada rested a little in the wake of Progressive Homes v.

Lombard in late 2010. Without further adieu, here are the insurance coverage cases from across Canada from 2011 that I believe are worthy of review.

Cabell v. Personal Insurance Co. (Feb. 8, 2011, Ontario Court of Appeal) Homeowner’s property The insureds suffered a loss to their in-ground swimming pool as a result of hydrostatic lift due to a build-up of groundwater. The basic policy specifically excluded damage to pools, hot tubs and spas and also excluded damage caused by “settling, expansion, contraction, moving, bulging, buckling or cracking of any insured property . . .”

The insured purchased an endorsement, which returned coverage for outdoor pools, hot tubs and spas, subject to the caveat that “all other terms, conditions and exclusions” of the policy remained unchanged. The insurer denied coverage, arguing settling, expansion or cracking of the pool caused the damage.

While this argument was successful at trial, it was rejected by the Ontario Court of Appeal, which held that the insurer’s argument virtually nullified the coverage provided by the endorsement, as expansion and cracking represented the primary risks to the pool. The court held that the doctrine of “nullification of coverage” (the refusal to apply an exclusion where to do so would remove virtually the entire cov30 Claims Canada

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erage) represented a stand-alone doctrine which can be relied upon to find coverage where a court is satisfied that the upholding of a denial would result in a nullification of the very coverage the insured bargained for.

Pietrangelo v. Gore Mutual Life Insurance Co. (Feb. 23, 2011, Ontario Court of Appeal) Homeowner’s property insurance The insureds owned four houses, three of which were rental properties. A tenant at one of the properties caused an explosion, which destroyed the house. An investigation revealed that the tenant was using the residence as a grow operation, and he subsequently pleaded guilty to criminal charges relating to marijuana production. The insurer denied coverage to the owner as the policy provided that “we do not insure . . . loss or damage . . . to dwellings . . . used in . . . processing [or] manufacture of marijuana.”

Both the trial judge and, subsequently, the Ontario Court of Appeal, upheld the denial, rejecting the insured’s argument that the exclusion was “unjust or unreasonable” when applied to an innocent owner. The Court of Appeal found the trial judge interpreted the clause reasonably, and, further, there was a rational basis for its existence. As such, its application was not “unjust or unreasonable.”

Bulldog Bag v. AXA Pacific Insurance Co. (Apr. 12, 2011, British Columbia Court of Appeal) Commercial General Liability Bulldog Bag manufactured plastic packaging for a garden product manu-

facturer, Sure-Gro. When Sure-Gro put the bags to use, the ink began coming off, rendering the bags unusable.

The already packaged Sure-Gro product had to be salvaged and repackaged.

Sure-Gro was only able to salvage 90 per cent of its product and sued Bulldog Bag for its losses. Bulldog’s CGL carrier, AXA, denied coverage on the basis that there was no “property damage” or, in the alternative, that the only covered “damage” was to the 10 per cent lost product. It was agreed that the value of Bulldog’s defective bags was excluded from coverage. While the trial judge initially sided with AXA, finding that only the costs associated with the 10 per cent damaged product fell within coverage, the B.C. Court of Appeal disagreed, holding that the entirety of the loss was covered. Once there is resultant damage to third party property found (in this case, the 10 per cent lost SureGro product), there is full coverage available for the cost of rectifying that damage.

ING Insurance Co. of Canada v.

Miracle (Apr. 26, 2011, Ontario Court of Appeal) Commercial General Liability The insured, Miracle, operated a gas station and was sued when fuel allegedly escaped from an underground storage tank, causing damage to neighbouring property. Miracle sought coverage from its CGL carrier, ING, which denied that there was a duty to defend and/or indemnify given the policy’s “absolute pollution exclusion.” While the application judge rejected ING’s position, declaring the exclusion only applied to active polluters, ING sucwww.claimscanada.ca

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cessfully appealed. The Ontario Court of Appeal held that nothing in the pollution exclusion limited its application to only active polluters. As gasoline qualified as a pollutant and such pollutant had escaped from the insured’s property, the pollution exclusion applied to preclude coverage.

Maccaroni v. Kelly (May 30, 2011, Ontario Court of Appeal) Auto Liability — OPCF 44R Mary Maccaroni sued after being rear-ended by a vehicle driven by Kevin Kelly, who was insured with The Cooperators. The Co-operators denied coverage to Kelly and his mother, the owner of the vehicle, on the basis that Kelly’s driver’s license was suspended at the time of the accident. In response, Maccaroni sued her own insurer, ING, under the OPCF 44R endorsement. Maccaroni settled her action with The Co-operators for the $200,000 minimum limits and sought to recover her damages in excess of $200,000 from ING. ING argued the release of The Co-operators and its insureds barred recovery under the OPCF 44R, as there was no judicial determination of The Co-operators off-coverage position. This argument was accepted by the motion’s judge, who dismissed the claim against ING, however, Maccaroni successfully appealed. The Ontario Court of Appeal held that, while Maccaroni was still required to prove that The Co-operators coverage denial was valid, this could still be proven in the insured’s direct action against ING. Further, it was not “plain and obvious” that Maccaroni’s release of The Co-operators and its insureds barred recovery against ING. Saskatchewan Government Insurance v. Patricia Hotel (1973) Ltd. (Jun. 20, 2011, Saskatchewan Court of Appeal) Commercial General Liability SGI provided CGL coverage to the Patricia Hotel (Pat). The declarations page of the policy provided that the business of the Pat was a “hotel, bev32 Claims Canada

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erage room and beer and wine store.” During the demolition of a building on the premises, which was owned by another company, the building collapsed on an electrical sub-station. The City of Saskatoon sued the Pat for the damage. The Pat sought coverage from SGI under the CGL policy. SGI denied coverage on the basis that demolition operations fell outside the scope of the risk insured. While the initial application judge held in favour of the Pat, SGI successfully appealed. The Saskatchewan Court of Appeal held that there was no proven link between the demolition operations and the Pat’s operation of a “hotel, beverage room and beer and wine store.” As such, the operations in question were uninsured. This decision is contrary to an American line of authority, which precludes an insurer from restricting coverage to the operations described in the policy declarations absent explicit language to that effect.

Mahoney v. Cumis Life Insurance Co. (Mar. 30, 2011, Nova Scotia Court of Appeal) Accident and Sickness The insured, Mahoney, was driving a van in New Brunswick in 2005 when he struck a moose. His injuries were limited to minor abrasions.

An hour later, he experienced chest pains and died of a heart attack. He had a prior heart attack in 2002.

His family sought coverage under an accidental death policy on the basis that the car accident was the cause of his death. While the trial judge upheld the denial, the insured successfully appealed on the basis that the motion judge had exceeded her authority in determining the actual cause of death.

While the case was remitted for another trial in order to determine the cause of death, the court importantly

held that, if Mahoney’s prior medical condition was found to have “even partially” contributed to his death, the policy would not respond.

Swailes v. Insurance Corp. of British Columbia (Mar. 2, 2011, British Columbia Court of Appeal) Automobile property insurance The insured, Swailes, was covered under a comprehensive auto policy issued by ICBC for his 2006 Chevrolet Corvette. While driving, Swailes spun the car’s rear tires, causing the axle to break, immobilizing the car’s rear wheel, permitting the heat to rise, eventually causing a fire, which destroyed the vehicle. Swailes claimed under the auto policy for the loss of the vehicle. ICBC denied coverage on the basis of the policy’s exclusion for “mechanical fracture, failure or breakdown,” arguing the insured was not saved by the exclusion’s exception for loss or damage caused by fire, theft or malicious mischief. The denial was upheld at trial, with the trial judge agreeing that the fracture of the car’s axle was the cause of the fire, and thus excluded from coverage. Swailes successfully appealed, as the British Columbia Court of Appeal held that the trial judge erred in restricting his interpretation of the phrase “loss or damage” to only the damage caused by the mechanical breakdown. This phrase necessarily included all “loss or damage” claimed by the insured, including all losses other than the axle. As such, the claim was saved by the exception, as the loss to the remainder of the vehicle was caused by fire (the exception) and not mechanical breakdown.

Onex Corp. v. American Home Assurance Co. (Jun. 30, 2011, Ontario Court of Appeal) Directors and Officers Liability Onex, and a number of its officers, were sued in Georgia for damages related to their alleged conduct in managing a subsidiary, Magnatrax. The www.claimscanada.ca

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litigation was brought by the Magnatrax Litigation Trust, which alleged that Onex and its directors and officers had effectively looted Magnatrax.

The directors and officers sought indemnity for their defence costs incurred in the suit under a number of officers and directors insurance policies issued to Onex by American Home and various excess insurers in 20022003 and again in 2004-2005. The primary issue was which D&O policy year was required to respond to the allegations. American Home and the excess insurers for the 2004-2005 policy year argued a demand letter sent on Aug. 1, 2003 (Foley letter) qualified as notice of circumstances which could give rise to a claim. As that letter had been provided by Onex’s broker AON to American Home prior to the expiry of the 2002-2003 policy, that policy should respond. The directors, however, argued that the Foley letter was not sufficiently clear to qualify as a notice of circumstances, and therefore, the later policies applied. The court decided on summary judgment that the 2002-2003 D&O policies should respond, agreeing that the Foley letter was sufficiently detailed to trigger coverage under those policies. This meant that the claims were specifically excluded under the 2004-2005 policies. Various other arguments against coverage made by American Home relating to exclusions in the 2002-2003 policies were rejected.

cause of the fire. The insurer must simply show on the totality of evidence that arson was proven. Further, the trial judge’s finding that the business owners had motive and opportunity were upheld. The insured owner had lied initially to the RCMP about

attending at the premises in the hours prior to the fire, eventually admitting that he went to the premises in the early morning hours just prior to the fire.  Christopher Dunn is a partner with Dutton Brock, LLP. His practice involves representing and providing insurance coverage advice to those in the insurance industry.

Lancer Enterprises Ltd. v.

Saskatchewan Government Insurance (Mar. 9, 2011, Saskatchewan Court of Appeal) All-risks property This was an appeal from a finding that the loss was excluded from coverage under an all-risks property policy as one of the insured’s directors/officers intentionally set the fire. The trial judge provided a useful review of the judicial test for proof of arson, holding that there is no requirement for an insurer to establish unequivocally that there is no other possible www.claimscanada.ca

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15/02/12 4:59 PM

Effective Claims Handling

BY IAN GOLD

Seven habits of highly successful claims handlers With property and casualty insurers’ profits and profitability tumbling in 2011, with auto injury costs soaring and with Standards & Poor’s warning that challenges remain in the Canadian insurance industry, insurers must do everything possible to process claims effectively and efficiently.

Effective claims handling will ensure that policyholders are properly treated and insurers will avoid exposure to extra-contractual damages.

What is effective claims handling?

Effective claims handling involves a thorough investigation and claims procedure that leads to a satisfactory resolution of a claim which: • pays claims that are properly payable; • identifies and denies fraudulent claims when appropriate; and • does not expose the insurer to extracontractual awards when the claim is not fraudulent.

Highly effective claims handlers are: • fair; • objective; • thorough; • informed; • responsive; • perceptive; and • careful.

1

Habit 1: Fairness A highly effective claims handler treats all claims as though they are legitimate — as most of them are. Re34 Claims Canada

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member, the majority of claims are legitimate and most people, if dealt with openly and honestly, will respond in an open and honest manner.

When seeking production of documents, be fair and do not overreach.

You should anticipate that all of your requests in a claims handling file will be reviewed by a judge or jury. If you have overreached, a court will have concerns about your motives.

Ensure records show reconsideration of an issue where new evidence is provided. A 2002 Ontario Court of Appeal decision, Kahzzaka v. Commercial Union Assurance Company of Canada,1 suggests that even if the insurer has acted diligently in identifying, retaining and using an expert and has received an expert report which supports the denial of the claim, the insurer may still be exposed to a punitive damage claim if it fails to evaluate its position in face of changing circumstances. Failure to do so may result in a bad faith award against the insurer.

2

Habit 2: Objective Highly effective claims handlers always look at all the facts with an

objective and open mind. They recognize there is no right answer for every claim, and recognize they must address all the information and evidence and follow where it leads. This requires reading all reports, estimates and other productions received, in their entirety. This also requires being open to new information and evidence, and reassessing the claim as new information arises.

The decision of Bullock v. Trafalgar Insurance Company of Canada2 illustrates that an insurer has an obligation to continually evaluate the evidence and has a duty to abandon its off-coverage position or refusal to pay and settle the claim should its position no longer be tenable based on the evidence.

Where there are two conflicting opinions, identify why you prefer one over the other. Ensure that someone reading the file materials can understand why a coverage decision was made. Case law has established that the duty of fairness does not require that an insurer be necessarily correct in making a decision to dispute its obligation to pay a claim. An insurer must, www.claimscanada.ca

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however, be able to show an objective and reasonable thought process behind its decision.

In determining whether a decision has been made objectively, a highly effective claims handler asks themselves the following: • Is the claims decision supported by the underlying claims documentation?

• Does the claim file reasonably reflect why they made the claims decisions?

• Has all the evidence been assessed before the handler responded?

(Do not make a decision if requested information has not yet been provided.)

• Has the insured been provided with the evidence the claims handler is relying upon?

cation with the insured is key. Highly effective claims handlers engage in timely, regular, professional, polite and comprehensive communication with the insured. They keep the insured informed of the status of the claim and investigation. An effective way to do this is to send a summary letter setting out the insurer’s position and why the claims process remains ongoing.

6

Habit 6: Perceptive Highly effective claims handlers are perceptive. To be highly effective,

3

Habit 3: Thorough Highly effective claims handlers are nothing, if not thorough. Thorough and effective handling of a claim involves obtaining proper documentation proving the insured’s loss (or lack thereof). A careful examination and investigation of all the documentation surrounding the loss must be made. A highly effective claims handler follows all leads within reason.

Highly effective claims handlers ensure log notes and correspondence accurately reflect reasons for claim decisions, not just what claims decisions were made.

4

Habit 4: Informed Highly effective claims handlers must keep themselves informed, including with respect to case law. They ensure they are not relying on old case law in order to make determinations on their files, and ensure that both they and their experts are fully informed and understand the issues required to make a determination.

Highly effective claims handlers also seek out experts who are informed and who specialize in the appropriate subject matter.

5

Habit 5: Responsive A great deal of case law has confirmed what highly effective claims handlers have known all along, namely, that responsiveness and communiwww.claimscanada.ca

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To be an effective claims handler it is critical to be fair, honest and transparent in every aspect of the adjustment of a claim, including all communications with the insured. claims handlers must be able to perceive and identify fraudulent claims.

As was the case in highly effective habit number three, a highly effective claims handler follows all the facts and all the leads. Claims handlers should review the insured’s habits. They should question whether the insured

has done anything out of the ordinary.

For example, has the insured recently procured new or increased coverage, or had numerous or similar claims?

7

Habit 7: Careful Last but not least, highly effective claims handlers are careful. Claims handlers should be careful and mindful of the fact that a judge or jury in a bad faith claim will scrutinize all of their actions. Care must be taken in any investigations into the insured’s personal or business situation, so as not to negatively impact the insured’s livelihood or personal situation. Be careful and make sure that your adjusting log notes are something that you are happy to produce as a highly effective claims handler.

Highly effective claims handlers are careful and know.

• What to do when law enforcement requests their assistance seeking information about their insured.

• When, if ever, they should contact law enforcement agencies with information about their insured.

• What information, if any, they should share with other insurers.

• What authorizations they should secure from their insured.

To be an effective claims handler it is critical to be fair, honest and transparent in every aspect of the adjustment of a claim. This includes all communications with the insured. An adjuster must be able to justify every step taken throughout the process.

This will ensure the interests of both the insured and insurer will be well served.  Ian Gold is a founding partner in Thomas Gold Pettingill LLP. He has handled all matters of insurance and insurance coverage cases on behalf of policyholders and insurers.

1. Kahzzaka (cob E.S.M. Auto Body) v.

Commercial Union Assurance Co. of Canada [2002] O.J. No. 3110 (Ont. C.A.) 2. Bullock v. Trafalgar Insurance Co. of Canada [1996] O.J. No. 2566 (Gen. Div.)

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16/02/12 9:07 AM

The

Slip Tester

BY JASON YOUNG AND MICHELLE LIVINGSTONE

Slips and falls are not trivial matters.

With large claim values for fall injuries, insurers need to know the risks they face from exposure to liability. However, with differing standards for slip testing and instruments, it can be difficult to wade through varying expert opinions. This has resulted in a debate over the accepted standards and equipment used for slip testing.

This could lead to attacks on both the credibility of expert testimony, as well as the quantitative findings of the expert. This can present a significant problem, as forensic results should rely on quantitative findings and not solely on subjectivity or interpretation. Due to the lack of agreement in standards and methodology, the forensics of slip testing has been left on shaky ground.

The BOT 3000 Enter the BOT 3000, an automated tribometer (slip resistance tester) capable of measuring both the static and dynamic coefficient of friction (COF) on both dry and wet floors.

The BOT 3000 automated slip tester The BOT 3000 measures the static COF by automatically dragging the test pad across a surface, starting from a stopped position.

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The dynamic COF is measured by automatically dragging the test pad across the floor surface, at a constant speed of approximately 20 cm/s.

The BOT 3000 objectively measures the slip resistance of various surfaces, surface conditions and footwear types, independent of user handling. It yields accurate and repeatable results, regardless of who is using it. Other commonly used testing devices require some degree of user handling while the measurements are being taken.

Calibration To ensure the accuracy of results, the BOT 3000 is factory-calibrated annually and validated on-site prior to each testing session. After each test, the device can print out a time trace of the test data. The printout indicates the calibration and validation date. These on-site printouts can be signed and saved for presentation at trial. These time trace print outs are also helpful in illustrating the changing nature of surface transitions (such as grout, etc.).

Device endorsement The development of objective testing devices such as the BOT 3000 will undoubtedly improve the state of slip testing forensics and claims handling in Canada. The device is endorsed by the National Floor Safety Institute and is used in conjunction with approved American National Standards Institute standards.

The BOT 3000 provides the forensic examiner with a portable, accurate and repeatable method of assessing the slip resistance of a walking surface under a variety of conditions.

In summary, the BOT 3000 is a reliable slip testing device that is, objective and well suited to withstand the scrutiny of litigation. The device will certainly ‘raise the bar’ for slip testing forensics in Canada in the coming decade. The use of the BOT 3000 by a qualified slip and fall expert will provide the insurer with clear and strong results required to handle a claim with confidence.  www.claimscanada.ca

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A graphical printout of test results after on-site testing Jason Young is a registered professional engineer and is the head of the personal injury assessment team at Giffin Koerth.

Michelle Livingstone is a registered professional engineer and has been investigating slips, trips and staircase fall claims at Giffin Koerth since 2007.

Note: Giffin Koerth is in no way affiliated with the manufacturing, sales or distribution of the BOT 3000 and has no partnerships, agreements or personal interests with any of those parties. Giffin Koerth gains no profit or benefit from our endorsement of this device.

What if you could combine experienced insurance litigators with powerful claims management software that lets you manage every aspect of your litigation portfolio online... all for a fixed fee? It’s possible.

Call us. We’ll show you how.

Louis Frapporti 905.540.3262 louis.frapporti@gowlings.com

Ralph D’Angelo 905.540.7116 ralph.dangelo@gowlings.com

www.gowlings.com/services/xclaim

redefining the lawyerclient relationship www.claimscanada.ca

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Fighting Fraud Through Financial Documentation

BY MICHAEL SIGSWORTH AND DARRELL SHERMAN

Media coverage on the high cost of fraudulent claims to insurers and insureds alike has been extensive. But the fight against fraud is also costly, and more so if punitive damages are awarded as a result of mistakes in the claims investigation process.

Most types of insurance require that insureds submit financial documentation in support of their applications and claims. While it is not new that documents are altered, forged or simply fabricated to support claims, the use of electronic tools has increased the temptation and the opportunity to do so. Adjusters are the first line of defense, identifying red flags and inconsistencies in financial documentation can help recognize fraud, while avoiding punitive damages for bad faith.

Requesting and reviewing financial documentation Requesting documentation that is both within the scope of a claim and comprehensive can be complicated. More so, understanding what you are looking at when you receive the documentation can, at times, be even more complicated. Advantage: Fraudster.

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A good first step for requesting documentation is to utilize the no cost tools offered by your forensic accountant, and the custom templates that they offer. But this still leaves the review, and here, red flag identification is crucial.

Employed In the case of an employed individual, document manipulation can be easy. Whether it is changing the dates or numbers on tax returns and notices of assessment, the amounts or signatures on cheques, or creating pay statements that never existed, manipulations can easily go undetected without a trained eye.

A simple and common example is cheque manipulation. When photocopied and modified, often the fraudster will not modify the magnetic ink character recognition (MICR) line — the printed numbers on the bottom of a cheque, which provides details about the bank account and the cheque amount. This is a clear sign of intentional misrepresentation or fraud, and easily identifiable. But identification requires the adjuster to be better trained in reading the documents than the insured.

Education and training are key to identifying all schemes, including inflation of wages or the creation of phantom employers. The latter attempts to show that the insured was employed at the date of loss when in

fact they were not. The following is a partial list of red flags, which may indicate these types of fraud: • Discrepancies between the employer and employee regarding job details, start and end dates, wages, or method of payment; • discrepancies in reported wages to other entities, such as CRA or WSIB; • dates on cheques paid to the insured are out of sequence with the cheque number; • business search shows familial relationship between employee and employer; • employer’s business cannot be easily located; • employer is hard to reach or is uncooperative; and • suspicious documents, such as copies showing evidence of erasures or other changes.

Self-employed For a self-employed insured, the volume of documentation can be significantly larger, as is the potential for greater fraudulent behaviour. Whether a property or auto claim, a common starting point for documentation review is the financial statements. These provide high-level information about the current state of the business, but can also hide the truth as it relates to a claim, even if they are accurate.

For example, an insured may claim that his business revenue declined as a result of fire, which is supported by the www.claimscanada.ca

16/02/12 9:16 AM

average sales in the prior year. However, monthly financial statements may show that the business has seasonal trends, and that the sales decrease is unrelated to the fire. An inexperienced investigator may not think to look, or know what to look for, beyond the annual financial statements. Again, education is key to battling fraud.

Some additional red flags for selfemployed claims include: • Certain business expenses supposedly continue when the person is reportedly not working; • hidden income or business interests surface; • a new related business is started by the insured, or the insured’s family; • wages paid to family or friends com mence or increase; • inventory records show damaged/ stolen items were obsolete; and • altered or incomplete documentation and date discrepancies.

Red flags require an understanding both of the nature of the business as well as the individual documents being reviewed. Without one, the story is clouded.

Inconsistencies Document modifications may not always be clear, and so inconsistencies in the documentation and story are another important way of identifying fraud. For example, a garbage disposal business owner states that his injuries have restricted his marketing activities resulting in declining revenue. However, an examination of the financial statements shows that following the accident, the business purchased two new trucks and container bins. The purchase of these fixed assets may or may not be inconsistent with the claim of declining revenue, but identification of this inconsistency is required to prompt further investigation.

In some cases there may be reasons for apparent inconsistencies, which should be investigated objectively, and accepted if they are logical and supported by documents. For example, real estate agents may continue to receive income following an accident although they are not working. This often relates to sales prior to the accident for which commissions are received months later. www.claimscanada.ca

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The examples and red flags provided above for both employed and self-employed insureds are not comprehensive.

However, they do show that if insureds have more knowledge and understanding of their financial documentation than the adjusters, it will be difficult to identify intentional misrepresentation, fraud and inconsistencies. But identification of suspected fraud is just the first step.

Steps to avoid punitive damages A key to avoiding punitive damages for bad faith claims is maintaining objectivity, and this starts with the implementation of early-stage fraud identification and investigation policies, which may include: • Claims-handling protocols for the fraud identification process; • an investigation methodology that allows for a comprehensive review while staying within the scope of the claim; • procedures which enable an adjuster to reconsider a position based on new evidence; • consistent review of files by colleagues, supervisors or claims committees; and, • steps to take after an error in an investigation.

For example, an adjuster who unilaterally presses an insured to provide documents that are not clearly relevant to the claim, such as for a period not directly related to the loss, may expose themselves to punitive damages. Appearing to be on a “fishing expedition” is clearly not objective. In all situations, requests for documentation should be reasonable and justifiable.

A well-developed investigation policy allows and encourages adjusters to reconsider their position based on the most current information. Combine this with a well-educated adjusting team and an understanding of when to use experts, and the opportunity for fraudsters to profit or costs to escalate from punitive damage is minimized.  Michael Sigsworth and Darrell Sherman are founding principals at ADS Forensics.

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Claims Canada 39

16/02/12 9:17 AM

EF

• education forum

A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA

Adjusting for Angst: Responding to Psychological Injury Claims

W

ith numbers of psychological injury claims on the rise, claims adjusters need to be aware of the potential pitfalls in assessing the validity of these claims.

Shifting claim patterns In recent years, personal injury claims have increasingly included claims not just for physical injuries but also for psychological or psychiatric impairment, such as anxiety, stress and depression disorders.

In many auto insurance cases, the psychological injury forms the main basis of the claim for compensation.

For example, following a fenderbender accident involving a few hundred dollars’ worth of damage to a car bumper, the claim might include a psychological injury claim for posttraumatic stress disorder. Determining the validity of such psychiatric disorders and the merit of the claims can be a challenging exercise.

On the accident benefits side of auto insurance, insurance companies and lawyers have seen a significant rise in the number of psychological injury claims, especially in Ontario, where there is also a condensed time period for filing psychological claims. In some cases an initial claim for anxiety or depression may now turn up just two or three weeks after an accident takes place.

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There are certainly cases where legitimate psychological injury claims do arise from automobile accidents.

At the same time, public awareness of psychological conditions such as depression and anxiety has been increasing, and pharmaceutical companies have increasingly promoted medications as solutions — factors which may be contributing to the increase in claims of this kind. In addition, there is concern in the industry that some automobile injury compensation models may effectively be providing economic incentives to pursue these types of claims.

Determining injury Some psychological injuries are compensable and others are not. It is often up to adjusters, insurance companies, lawyers and medical experts to determine which are which. When a claim is litigated, a claimant’s credibility in court can be the determining factor.

The main challenge with psychological claims is determining the cause and scope of the disorder. Psychological conditions often involve multiple causes (some of which may have existed before the accident) and overlapping types of impairment. The injuries are subjective in nature and can’t be seen on an x-ray or other imaging test.

Instead, psychological assessments of-

ten involve an element of self-reporting and an exercise of judgment on the part of the assessing professional. In this sense, psychological assessments are less objective than some other forms of injury assessment.

Comments from the courts Courts have rendered judgments in several psychological injury cases, but uncertainty remains about questions such as what a “recognized” psychiatric impairment is, how “reasonably foreseeable” a given psychiatric injury should have been, and what level of mental fortitude is expected of the average person.

On the tort side, courts have attempted to clarify which kinds of psychological claims are compensable

The legal tests involved in psychological injury cases focus on determining issues such as: • whether there was a breach of duty; • causation (the “but for” test and reasonable foreseeability); • whether the injury was a recognized psychiatric impairment; and • whether the injury would be expected of an individual with reasonable robustness and fortitude

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through negligence. In Mustapha v.

Culligan (2008) — known as the “fly in the water bottle” case — the Supreme Court of Canada held that “the law expects reasonable fortitude and robustness of its citizens and will not impose liability for the exceptional frailty of certain individuals.” The court also ruled that Culligan could not be found liable because the company could not have “reasonably foreseen” the psychiatric injury suffered by the customer.

On the other hand, more recent rulings have cast doubt on the issue.

For example, in Frazer v. Haukioja (2010), the claimant, Frazer, allegedly suffered an initial misdiagnosis of his physical injury and a delay in informing him of its true severity. He grew distressed and consulted a psychiatrist, who found that he suffered from an anxiety disorder with features of panic disorder. A trial judge found that Frazer’s psychiatric diagnosis was the result of Dr. Haukioja’s failure to properly treat him for his physical injury, and awarded more than $2.6 million in damages and costs. The Ontario Court of Appeal upheld the judgment.

So far, the legal principles are being interpreted on a case-by-case basis, lending some unpredictability in the application of negligence concepts in psychiatric injury cases.

Claims handling issues For adjusters and insurance companies, the implications are that psychological claims need to be dealt with proactively — and using a different set of skills and approaches than are used for physical injury claims.

One of the first steps in any psychological claim is to better understand the history and situation of the claimant, as well as the severity of the accident. The claim file should include information about any pre-existing mental health issues the claimant may have had before the accident, so that the adjuster can develop a broad understanding of the situation.

Surveillance may be appropriate if there are potential inconsistencies in www.claimscanada.ca

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claimants assessed with psychological disorders.

The investigation may also need to consider where an auto accident injury claim originates from: some assessment and treatment facilities have reputations for turning out suspiciously high numbers of claimants assessed with psychological disorders. a psychological claim — for example, if the claimant claims to be too anxious to drive a car. The investigation may also need to consider where an auto accident injury claim originates from: some assessment and treatment facilities have reputations for turning out suspiciously high numbers of

Expert reports In most psychological claims, especially in tort, the opinions of medical experts are required, whether for examinations, reports or testimony.

Medical reports from experts representing the defendant may be used for various purposes such as to minimize damages, prove no breach of standards, or demonstrate no causation.

Some insurers may have concerns about the heightened costs of medical expert reports and examinations, particularly when specialized fields such as neuropsychiatry are involved.

Factors to consider when retaining a medical expert include: • identifying the specific purpose or situation where an expert is needed (for example, to rebut the plaintiff’s expert, establish no causation, etc.); • selecting the right expert by considering reputation, technical expertise and impartiality; • evaluating timing considerations such as the sequencing of experts and reports; • instructing experts clearly; and • controlling costs.

Whether a psychological injury claim is for accident benefits or tort in an auto accident, or even for a personal injury, using effective claims handling techniques to distinguish between legitimate disorders and exaggerated psychiatric injuries is critical. It’s important to remember that legitimate psychological injuries do occur. However, such claims need to be supported by credible information.  This article is based on excerpts from ADVANTAGE Monthly, a series of topical papers on emerging trends and issues provided to members of the CIP Society.

The Chartered Insurance Professionals’ (CIP) Society is the professional organization representing more than 15,000 graduates of the Insurance Institute’s Fellow Chartered Insurance Professional (FCIP) and Chartered Insurance Professional (CIP) programs.

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• on the scene OTS Carol Messervey, representing the Canadian Independent Adjusters Association’s Nova Scotia region, presents Lindsay Mackenzie of The Economical Insurance Group with the award for best results in Essentials of Loss Adjusting. l

Sean M. Douglas has been appointed as the new regional vice president (British Columbia) with Winmar Franchise Corp. Douglas brings a diverse range of experience and passion to his new role with Winmar Franchise Corp.

His management, administration, adjuster and broker experience over the past 23 years with national insurers, independent adjusting firms and a national brokerage firm will be a great asset to Winmar. l Winmar Franchise Corp. is pleased to announce the opening of its newest location in Amherst, N.S. Winmar Amherst is located at 26 Industrial Park Drive.

Jonathan MacDonald will lead the team as project manager/estimator. MacDonald has a degree in carpentry, coupled with over eight years of project management and customer service experience in the construction industry. l Winmar Franchise Corp. is pleased to announce the opening of its newest location in Victoria, B.C. Winmar Victoria is located at 340 Mary St. Owner Andrew Edwards has been successfully operating Winmar Vancouver for the past five years and looks forward to operating his second location in Victoria.

Already a leader in the restoration industry, Edwards’ commitment to providing quality and professional customer service will continue with his new location. l Impact Auto Auctions, a Canadian automotive salvage management company and a wholly-owned subsidiary of KAR Auction Services Inc., has opened a second Calgaryarea location in Airdrie, Alta.

The new location, known as Calgary North, doubles Impact’s capacity in the Calgary area. The new site will feature enhanced reconditioning and inspection facilities, as well as indoor auction lanes to support Impact’s Run & Drive service. Assignments from Airdrie north to Red Deer are being directed to this location.

Auction dates are still to be determined, and will be posted on Impact’s website, www.impactauto.ca.

Impact’s Calgary North branch is located at 1621 Veterans Blvd. NE in Airdrie, Alta. l 42 Claims Canada

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The International Institute of Loss Adjusters (IILA) had its genesis some 45 years ago, with the meeting of a few senior property adjusters from North and South America. They perceived a need for the exchanging of ideas and information, along with international cooperation, to further individual aspirations in their chosen profession.

From such a casual meeting, Fred Plant the Institute has developed into members from 40 countries throughout the world, including those where loss adjusting is in its infancy. By regulation, a maximum of 70 per cent are from North America (including Canada) and the rest are drawn from countries throughout the world. Because the IILA sets high membership standards, it limits participants to a maximum of 200 senior professionals worldwide.

It is indeed international. While there is a mid-term meeting held concurrently with an adjusters association conference in the US, annual conventions are held throughout the world. Recently, they have been in Lima, Peru; Nashville, Tennessee; Montréal; Singapore; Queenstown, New Zealand. Forthcoming events are scheduled for Puerto Rico, Boston, Massachusetts, and Istanbul, Turkey.

The organization is as fraternal as it is professional. At the annual meeting, although there is a substantial education program, all members derive considerable benefit from personal interaction with their peers from other parts of the world. Because members are from so many countries, it is infrequent indeed that two adjusters practicing in the same area are involved and thus the dissemination of information is generally free and unrestrained. The resultant networking is of great benefit to adjusters from smaller companies developing international contacts. This is particularly important when making recommendations to principals who might be used in other countries or, indeed, direct assignment of work from one adjuster to another. The social calendar is such that the spouses of deceased members maintain spousal membership to continue friendships developed with those from other countries, over the years.

For more information, visit the IILA website at http:// www.iila.com. ~ Fred Plant, president of the International Institute of Loss Adjusters. l The British Columbia Pond of the Honourable Order of the Blue Goose hosted its annual Christmas luncheon on Dec. 7, 2011. More than 40 members and guests attended the event, held at the festive Vancouver Golf Club. More than 100 children’s gifts were donated to the Salvation Army for their Christmas gift drive thanks to the generosity of members and guests. l www.claimscanada.ca

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National Standing Committees 2011-2012 ADVISORY Delores Thorbourne, BA, FCIP, CRM Granite Claims Solutions Suite 103 Greystone VII 4208 - 97 Street Edmonton, AB T6E 5Z9 Phone: (780) 442-3077 Fax: (780) 466-0325 E-mail: delores.thorbourne@graniteclaims.com John D. Seyler, AIIC ProFormance Group 2 Robert Speck Parkway, Suite 700 Mississauga, ON L4Z 1H8 Phone: (905) 270-1723 Fax: (905) 272-7486 E-mail: jseyler@prospecialty.ca

Jo-Ann Eccleston, CIP Aviva Canada Inc. 2206 Eglinton Ave. East Toronto, ON M1L 4S8 Phone: (416) 689-3328 Fax: 1-866-805-8585 E-mail: jo-ann_eccleston@avivacanada.com Bob Grouchy, BA, FCIP, CRM Allianz Global 1600 – 130 Adelaide Street West Toronto, ON M5H 3P5 Phone: (416) 915-4247 Fax: (416) 849-4555 E-mail: bob.grouchy@agr.allianz.ca

Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca

Carol Jardine, FCIP, CRM TD Insurance 2161 Yonge Street, 4th Floor Toronto, ON M4S 3A6 Phone: (416) 486-2507 Fax: (416) 545-6022 E-mail: Carol.Jardine@tdinsurance.com

James B. Eso, BA, CIP 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

Justin J. MacGregor Martin Merry & Reid Limited 3 Church Street, Suite 404 Toronto, ON M5E 1M2 Phone: (416) 366-3333 Fax: (416) 366-0730 E-mail: jmacgregor@mmr.ca

John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com

Glenn F. Martin Aviva Canada Inc. 2200 Eglinton Ave. East Toronto, ON M1L 4S8 Phone: (416) 288-5280 Fax: (416) 288-5092 E-mail: glenn_martin@avivacanada.com

CIAA NATIONAL INSURANCE INDUSTRY ADVISORY BOARD Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 - 1575 West Georgia Street Vancouver, BC V6G 2V3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 E-mail: pkernaghan@kernaghan.com

Mark Stewardson, FCIP Royal & SunAlliance 2225 Erin Mills Parkway, Suite 1000 Mississauga, ON L5K 2S9 Phone: (905) 403-2333 Fax: (905) 403-2326 E-mail: Mark.Stewardson@rsagroup.ca

Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 401 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca Delores Thorbourne, BA, FCIP McLarens Canada Suite 103 Greystone VII 4208 - 97 Street Edmonton, AB T6E 5Z9 Phone: (780) 442-3077 Fax: (780) 466-0325 E-mail: delores.thorbourne@ graniteclaims.com Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca Patricia M. Battle Canadian Independent Adjusters’ Association/L’Association Canadienne des Experts Indépendants 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

Mark Weir Intact Financial Corporation 700 University Avenue, 13th Floor Toronto, ON M5G 0A1 Phone: (416) 341-1464 Fax: (416) 217-0562 E-mail: mark.weir@intact.net Peggy Wong, CIP The Economical Insurance Group 111 Westmount Road South Waterloo, ON N2J 4S4 Phone: (519) 570-8500 Fax: (519) 570-8690 E-mail: Peggy.Wong@teig.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 COMMUNICATIONS Teresa Mitchell, FCIP, CRM, FCLA, FCIAA, FIFAA Crawford & Company (Canada) Inc. 14 – 431 Bayview Drive Barrie, ON L4N 8Y2 Phone: (705) 728-5597 Fax: (705) 728-2167 E-mail: Teresa.Mitchell@crawco.ca

John M. Sharoun, FIIC, CFE, FCIAA 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

CONSTITUTION & RULES John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com

Dennis N. Schembri, CIP, CFEI Granite Global Solutions 133 King Street East, 3rd Floor Toronto, ON M5C 1G6 Phone: (647) 789-2438 Fax: (647) 789-2449 E-mail: dennis.schembri@graniteglobalsolutions.com

CONVENTION Karen Kuronen, CIP, Dip. Mech. Eng. Arctic West Adjusters Ltd. 401 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: kkuronen@arcticwest.ca

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DESIGNATION Paul W. Greening, CLA, FCIAA Greening Aviation Claims Inc. 26C Palliser Park, Box 190 Riverhurst, SK S0H 3P0 Phone: (306) 353-2000 Fax: (306) 353-2200 E-mail: pgreening@sasktel.net E. Brian Gough, FCIP, CLA, FCIAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: ebgough@marshadj.com Robert V. Pearson, CLA, FCIAA AAL Alberta Ltd. 600 – 2424 4th Street S.W. Calgary, AB T2S 2T4 Phone: (403) 452-2195 Fax: (403) 452-3568 E-mail: bob.pearson@aaladjusters.com DISCIPLINE Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca EDITORIAL Fred Silvestri, BA, CIP Sedgwick CMS Canada Inc. 21 Four Seasons Place, Suite 100 Toronto, ON M9B 6J8 Phone: (416) 695-5100 Fax: (416) 695-5120 E-mail: fred.silvestri@sedgwickcms.ca John M. Sharoun, FIIC, CFE, FCIAA 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 Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca EDUCATION David Porter, LL.B., FCIP, CRM Advance Claims Service Ltd. 206 - 2323 Boundary Road Vancouver, BC V5M 4V8 Phone: (604) 642-0660 Fax: 1-888-452-5246 E-mail: davidp@advanceclaims.com 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 Randy P. LaBrash, CIP, CFE, CFEI Crawford & Company (Canada) Inc. 300 – 191 Lombard Avenue Winnipeg, MB R3B 0X1 Phone: (204) 947-2340 Fax: (204) 943-9168 E-mail: Randy.Labrash@crawco.ca Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 401 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca

IBC: LIAISON, LEGISLATIVE & FORMS Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca LICENSING J. Miles O. Barber, B.Comm. (Hons.), FCIP, CRM Network Adjusters Ltd. 67 Folkestone Blvd.

Winnipeg, MB R3P 0B4 Phone: (204) 897-5793 Fax: (204) 897-5797 E-mail: mbarber@mts.net MEMBERSHIP & QUALIFICATIONS Santo Carbone, CRM, FCIAA Crawford & Company (Canada) Inc. 300-123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 364-6341 Fax: (416) 435-0546 E-mail: Santo.Carbone@crawco.ca NOMINATING Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 401 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca James B. Eso, BA, CIP 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 PRIVACY James B. Eso, BA, CIP 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 Keith P. Edwards, FCILA, CLA, FUEDI-ELAE CIAA Honorary Life Member c/o CIAA National Office 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca

CIAA REGIONAL PRESIDENTS 2011 – 2012 NEWFOUNDLAND & LABRADOR Marcel Pitcher, CIP, CRM Crawford & Company (Canada) Inc. 300 – 44 Torbay Road St. John’s, NL AlA 2G4 Phone: (709) 753-6351 Fax: (709) 753-6129 E-mail: Marcel.Pitcher@crawco.ca NOVA SCOTIA E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca NEW BRUNSWICK & PRINCE EDWARD ISLAND Luc Aucoin, BBA, FCIP Plant Hope Adjusters Ltd. 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: laucoin@planthope.com QUEBEC/AESIQ Elaine Savard, LL.B., FPAA Les Expertises Richard Racette 1090, rue Principale Sainte-Agathe des Monts, PQ J8C 1L6 Phone: (819) 326-0012 Fax: (819) 326-2023 E-mail: elaine.savard@exprr.ca ONTARIO Teresa Mitchell, FCIP, CRM, FCLA, FCIAA, FIFAA Crawford & Company (Canada) Inc. 14 – 431 Bayview Drive Barrie, ON L4N 8Y2 Phone: (705) 728-5597 Fax: (705) 728-2167 E-mail: Teresa.Mitchell@crawco.ca MANITOBA Timothy W. Bromley J.P. Hamilton Adjusters Ltd. 125 Enfield Crescent Winnipeg, MB R2H 1A8 Phone: (204) 944-1057 Fax: (204) 944-1606 E-mail: tbromley@mts.net SASKATCHEWAN Lee Dixon Crawford & Company (Canada) Inc. 210 – 227 Primrose Drive Saskatoon, SK S7K 5E4 Phone: (306) 931-1999 Fax: (306) 931-2212 E-mail: Lee.Dixon@crawco.ca WESTERN Bea Boutcher, CIP Horizon Adjusters Ltd. #207, 9814 – 97 Street Grande Prairie, AB T8V 8H5 Phone: (780) 402-8383 Fax: (780) 402-7888 E-mail: bea.boutcher@horizonadjusters.com PACIFIC David Porter, LL.B., FCIP, CRM Granite Claims Solutions 206 - 2323 Boundary Road Vancouver, BC V5M 4V8 Phone: (604) 642-0660 Fax: 1-888-452-5246 E-mail: david.porter@graniteclaims.com

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• on the scene OTS Matson, Driscoll & Damico, a forensic accounting firm, hosted their annual American Thanksgiving Event on Nov. 24, 2011 at the Real Sports Bar & Grill in Toronto. The event raised $3,714 for the Starlight Children’s Foundation. l

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• on the scene OTS Friends of Hughes Amys LLP gathered at the Irish Embassy in Toronto for the firm’s annual Holiday Cocktail Party on Nov. 30. The event included a photo booth, in which people could have their pictures taken wearing accessories such as wigs, hats, etc. Attendees enjoyed hors d’ouevres, such as oysters, while listening to music and talking to colleagues. l

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• on the scene OTS The Ontario Pond of the Honourable Order of the Blue Goose hosted its annual Galabration on Dec. 8, 2011. More than 100 ganders and guests attended an elegant evening of fellowship and dining in the true spirit of the Christmas season. The event was held at the prestigious University Club of Toronto. l

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shame on him. On the other hand, we could provide all of the information, Many years ago, I was told warts and all. I was then told that if I that an unethical person The Ontario Chapter Risk & Insurance Managewas not prepared to provide allofofthethe ment Societyseek (ORIMS) held its Christmas Luncheon on was one who stole money. information, I should employment Dec. 15, 2011, at the Westin Harbour Castle in Toronto. elsewhere.

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More than $8,000 and hundreds pounds food were raised to help the food bank in its fiasco andof so manyof similar situations to eliminate hunger in and around Toronto. l that havefight been prevalent in recent times, we have to wonder if there is any such thing as a concept of business ethics. But when we consider the consequences of these activities, we have to realize we cannot survive without a clear concept of what is acceptable and what is not.

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The industry has a great tradition of mentoring. Even as the most senior professionals retire from the workforce, there is no reason this tradition cannot continue. Just as today’s senior professionals learned from the previous generation, they must be encouraged to pass their knowledge down to the new generation of professionals.

And as the ranks of junior professionals gain knowledge and experience, they are no longer “junior.” They should be encouraged to participate in the mentoring process, thereby continuing the existing cycle on its endless loop.

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• on the scene OTS On Jan. 18, 2012 the partners and staff of McCague Borlack LLP hosted their 18th annual “Christmas in January” party. McCague Borlack LLP is the Ontario affiliate of the Canadian Litigation Counsel and the Harmonie Group. Members from both groups were in attendance to enjoy cocktails, hors d’oeuvres and networking. l

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