Claims Canada April/May 2009

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Contents APRIL/MAY 2009 • VOLUME 3 • NUMBER 2

Cover Feature

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12 Get Cracking On Recruitment With fewer people “falling” into insurance and an increasing number of retirees, finding a way to recruit the millenials into the industry is becoming paramount.

BY LAURA KUPCIS

Spotlight 18 No Stone Left Unturned At P.C.A Adjusters, ensuring that all aspects of a claim are covered is top priority.

BY LAURA KUPCIS

Education Forum

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34 Contamination Coverage Environmental claims can involve either bodily injury or property damage. Understanding how to analyze environmental coverage is key for an adjuster.

News Features 20 Bedbugs These critters were a pest thought to be left in the past, but bedbugs have been creeping up again both in homes and high-priced hotels, causing adjusters to revisit vermin coverage in policies.

BY JEFF GIBBS

23 What is a ‘Human Factors’ Expert Anyway?

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Human factors experts are able to a significant role in handling claims and litigation by studying the limitations of the human body.

BY JASON YOUNG

24 Read the Lease!

A recent New Brunswick appeal case decision reviews the impact of the lease on the insurer’s right to subrogate.

BY MONIKA ZAUHAR and MATTHEW HILTZ

26 Decoding Medical Rehabilitation Terms An overview of medical terms and their acronyms commonly found in a file.

BY JUDY FARRIMOND

28 Social Networking Websites The impact that social networking sites are having on litigation and overview of recent cases which take these websites into account.

BY GARY ZIMMERMANN

32 The Economic Crisis The current economic situation will not only impact business interruption losses this year, but well after the economy has lifted again.

BY GERRY BOUWMAN

Departments 4 First Notice 36 On The Scene

Columns 34 Education Forum

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Increase in fraud as recession looms The threat of global recession and the current financial turbulence will result in an increase in whitecollar crime, coupled with significant changes in how fraudsters operate, according to the Kroll Global Fraud Report.

An increase in full-scale fraud investigations involving legal disputes, regulatory action and prosecution is expected in 2009 as whistle blowing becomes more common, the report says.

While the last few years have been relatively calm in respect to litigation activity, the storm will break; those likely to be affected should start to prepare, the report cautions.

It goes on to note that financial institutions, regulators and law enforcement agencies should: • expect more claims, new legislation and regulation and increased regulatory and law enforcement scrutiny; • evaluate existing policies, procedures and internal controls to determine any need for restructuring, revision, elimination or new areas to address; and • assess the adequacy of resources, including personnel, to deal with likely increase in complaints, inquiries and legal actions.

“Finally, despite all that is coming to light, people will always be vulnerable to false hope schemes,” Nancy Goldstein, associate managing director of business intelligence and investigations for Latin America and the Caribbean, writes in the report. “Financial institutions must therefore fully embrace concepts such as enhanced due diligence, as well as intensify screening of prospective employees, business partners and other third parties with whom they conduct business.” ●

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Governments should improve efforts to prepare for large-scale disasters Governments need to improve how they prioritize efforts to prepare for large-scale disasters, according to an Organization for Economic Co-operation and Development (OECD) report, produced in conjunction with Swiss RE and Oliver Wyman, Innovation in Country Risk Management. Furthermore, they should work more closely with the private sector to ensure crises can be dealt with quickly and cost-effectively.

“Government efforts to assess large scale risks often focus on specific types of events like a flood or earthquake,” Jack Radisch, OECD’s risk policy analyst, warned. “There has been a tendency for ministries, departments and regulatory agencies at various levels of government to work in parallel and separate silos. This form of governance is far from optimal in today’s interconnected world, where risks are more complex. The current financial turbulence is a telling example of how the

management of risks we face in society should be coordinated from A to Z.” The countries covered in OECD’s study include Canada, Japan, the Netherlands, Singapore, the United Kingdom and the United States.

Each is attempting to establish an ‘all-hazards’ view of potential sources of risk,including natural disasters, major accidents, terrorism or an event such as a flu pandemic.

“Looking at risks across the board allows these countries to work more strategically to target limited resources at the exposures they consider a top priority, and it relies on close interaction not only between national, regional and local government, but also with the private sector,” said Alex Wittenberg, a partner at Oliver Wyman. “If we consider that over 80% of critical infrastructure is owned by the private sector in most of the nations featured in the report, there is a clear need for extensive public-private cooperation in a number of areas.” ●

Vehicle manufacturers urged to give independent repairers access to tools, training and diagnostics The Canadian Collision Industry Forum (CCIF) is supporting a private member’s bill before the House of Commons that would oblige vehicle manufacturers to provide independent repairers access to tools, training and diagnostic information.

“In Canada, certain vehicle manufacturers are denying [independent repairers] access to the tools, training and diagnostic information required to carry out repair and service work on their vehicles,” the CCIF notes in a press release.

“This is creating a competitive disadvantage that will impact independents at all levels, from distribution to repair and service.”

The private member’s bill will be debated in the House of Commons on Mar. 5.

AIA Canada, a national trade organization representing Canada’s $16.7 billion automotive aftermarket industry, has launched a ‘Right to Repair’ campaign. More information on the campaign can be found at

http://www.righttorepair.ca.

The AIA says the restricted access effectively prevents independent vehicle repairers from working on late-model vehicles.

The AIA notes 59 per cent of the 18.4 million light duty vehicles on the road in Canada today are equipped with on-board diagnostic capabilities, referred to as OBD II. OBD II equipped vehicles were introduced in 1998.

“Blocked access to OBD II information shifted as much as $2 billion in auto repair work to the car company dealer network in 2004,” the AIA says. “The loss of business [for independent repairers] is expected to grow at a significant rate, potentially reaching $3.9 billion by 2010.” ● www.claimscanada.ca

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F first notice Insurers differentiate duties of counsel from adjuster Insurers must avoid turning counsel into loss adjusters, which not only wastes money, but risks turning counsel into a witness.

Furthermore, counsel lose objectivity when they are asked to play the role of frontline investigators, Marcus Snowden, partner at Blaney McMurtry, told attendees at the Insurance Law: Winter Update 2009 in Toronto.

He told of a case in which one lawyer began to act in the role of a frontline investigator, resulting in a messy, expensive outcome for the insurer. A policyholder had certificates of insurance issued for other additional insureds.

Defense counsel was told to defend and investigate. After counsel interviewed all the insured parties, it came to light that the original information supplied to counsel was incorrect. Because of this, there was going to be a legal fight between the policyholders.

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“If you have your independent adjuster investigating solely for the named insured you’re going to avoid that scenario,” Snowden said.

Defense counsel was kicked off the file and the file was shipped to Snowden.

He told the client to hire a new lawyer and sent the file pertaining to that lawyer to the new counsel and sent the other part of the file to the additional insured.

“But I shouldn’t have had to do that if we remembered that counsel had a role, but the role isn’t on the frontline until you get us into court or until you get a plea,” he cautioned. “Don’t use us as an investigator, because otherwise you are going to end up wasting good money.” ●

Canadian insurance industry records bleakest hiring outlook since 1994 The hiring outlook in the finance, insurance and real estate segment of Canada’s economy has declined to its least optimistic level in 15 years, according to survey data released by Manpower Canada.

The Manpower Employment Outlook Survey is conducted quarterly to measure employers’ intentions to increase or decrease the number of employees in their workforces during the next quarter. All employers participating in the 2009 Q2 study were asked: “How do you anticipate total employment at your location to change in the three months to the end of June 2009 as compared to the current quarter?”

The global study surveyed nearly 72,000 public and private employers across 33 countries and territories, and various national reports were prepared.

The margin for error in the Canadian survey is +/- 2 per cent. Looking just at results for Canada’s finance, insurance 6

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and real estate industry, the report says hiring prospects are uncertain for 2009 Q2, with employers reporting a net employment outlook of +1 per cent.

“This comparatively weak outlook reflects quarter-over-quarter and yearover-year declines of 7 and 9 percentage points, respectively, and is the least optimistic in the sector since Quarter 2 1994,” the report notes.

Again, looking just at the finance, insurance real estate industry category, 6 per cent of the survey respondents said they expected an increase in hiring over the next three months, 4 per cent said they expected a decrease, resulting in a net employment outlook of +2%.

Eighty-seven per cent said they expected no change.

By way of comparison, public administration was the industry with the positive outlook on its 2009 Q2 hiring (+18 per cent), whereas the manufacturingdurables segment had the least optimistic outlook (-4 per cent). ●

NB collaborates with insurers, brokers to improve access to non-profit insurance The Province of New Brunswick has announced a formal collaboration with insurers and brokers to help find appropriate insurance coverage for non-profit organizations at the most competitive rates. Partners in the collaboration are the province's Community Non-Profit Organizations Secretariat, Insurance Brokers' Association of New Brunswick (IBANB) and Insurance Bureau of Canada.

"Insurance can be an expensive necessity for many non-profit groups in our province," Brian Kenny, minister responsible for the community non-profit organizations secretariat, said in a release. "The coverage they require varies between organizations, and they often do not have the resources or the expertise to shop for a package that best suits their needs and budget. These stakeholders (IBC and IBANB) have come forward to assist non-profits with access to insurance information and with more assistance in obtaining appropriate and affordable insurance coverage. This will help nonprofits with their bottom line and their ability to fundraise and deliver community-based programs and services."

Liability insurance packages include coverage for directors and officers, general liability, group accident benefits for volunteers and property coverage.

Kenny said the collaboration with the insurer and broker organizations is designed to bring non-profits closer to industry stakeholders.

Bill Adams, vice-president of IBC's Atlantic region, said a recent task force on insurance found the industry has made positive changes over the past two or three years to better serve the non-profit sector.

But a closer working relationship, facilitated by the government's secretariat, should allow for even more improvement in New Brunswick. ●

www.claimscanada.ca

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Breach of policy waived if insurer takes too long to claim no coverage: court An insurance company that takes three years to assert no coverage in a claim effectively waives the breach of a client’s policy that otherwise would have voided the insurer’s obligation to pay the full policy limit of its third party liability, the Ontario Court of Appeal has upheld.

In Logel Estate v. Wawnesa Mutual Insurance Company, the appeal court issued a short endorsement upholding the position of the Ontario Superior Court.

The Superior Court ruled Wawanesa was correct in asserting that it did not owe the full, $1-million policy limit of third party liability coverage to its deceased client, Lori Logel. Nevertheless, the court ruled, the insurer waited too long in the proceedings to establish its no-coverage position, thus waiving its ability to deny coverage.

Lori Logel was killed in a single car accident and her passenger, Bryan Gill, sustained serious injuries. Gill sued Logel’s estate, and the proceedings started in the lower court sometime in early 2002. “Wawanesa’s position on the motion was that Ms. Logel’s breach of the statutory condition of her policy meant that its contractual liability for third party liability policy limits of $1,000,000 was voided, thus potentially limiting Gill to a maximum recovery of $200,000 under the Wawanesa policy,� the Appeal Court noted.

The Ontario Superior Court held that Wawanesa’s interpretation of the terms of the policy was correct. But Wawanesa’s conduct from January 2002 to August 2005 constituted “a continuing election that amounted to a waiver by conduct of Ms. Logel’s breach.�

The Appeal Court agreed with the motions judge, noting Wawanesa filed a Statement of Defence in July 2002. “In the following three years, the action proceeded through discoveries, production and settlement discussions, including the dismissal of the action against two parties,� the Appeal Court observed. “Not until August 2005 did the appellant raise the potential coverage issue.� www.claimscanada.ca

In these circumstances, the appellate court ruled, the Ontario Superior Court was entitled to apply the law in this area, citing another case that held: “[i]n the present case the insurer finally took an off-coverage position but‌ much too late.â€? â—?

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F first notice Safety gains related to truck speed limiters come with caveats: Transport Canada study The introduction of speed limiters for trucks set at 105 kmh increases safety for all geometric highway configurations, especially straight highways, a report for the federal transportation department says.

The basic aim of the study, posted on Transport Canada’s web site, is to assess the safety implications of mandating speed limiters for large trucks (weight greater than 11,794 kg) for different speeds, including the 105 km-h threshold suggested by recent Ontario and Quebec legislation.

The study is modeled on a stretch of the QEW freeway in the Halton region. It found the “maximum safety gains” of speed limiters “were obtained when the maximum control speed was set to 90 km-h for uncongested traffic volumes.”

Safety gains were also realized at 105 km-h, but as control speeds increased, the safety gains decreased, the report notes.

“As maximum speed is set to 110 km-h, the safety gains with the introduction of mandatory limiters become less prominent,” the report says.

Safety gains also decreased as the volume and percentage of trucks on the road increased.

“As the volume is set close to capacity (200 vehicles per hour per lane), more vehicle interactions take place and this

Paul Aquino Publisher, (416) 510-6788 paul@canadianunderwriter.ca Fax: (416) 510-6809

Steve Wilson Senior Publisher, (416) 510-6800 steve@canadianunderwriter.ca Fax: (416) 510-6809

Mike Wells Account Manager, (416) 510-5122 mike@canadianunderwriter.ca Fax: (416) 510-6809

Laura Kupcis Editor (416) 510-5215 laura@claimscanada.ca

Phyllis Wright Print Production Manager

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SUBSCRIPTION INQUIRIES (416) 442-5600 • 1-800-668-2374 Fax: (416) 442-2191

Produced by the publishers of Canadian Underwriter magazine.

A bi-monthly magazine (6x per year), Claims Canada is published by Business Information Group, a division of BIG Magazines LP, a leading Canadian information company.

Business Information Group is located at: 12 Concorde Place Suite 800, Toronto, ON, M3C 4J2.

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

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leads to a reduction in safety, especially for those segments with increased merging and lane-changing activity, such as on and off ramp segments,” the report notes. “In these instances, the introduction of truck speed limiters can actually reduce the level of safety when compared to the non limiter case.”

The report also notes more research needs to be done on the use of speed limiters when trucks are driving on rural, twolane highways.

“The implementation of mandatory speed limiters on rural, two-lane highways may lead to an increase of passing manouevres onto the opposing traffic lane,” the report says.

“The possibility for increased unsafe passing manouevres poses special safety challenges where trucks are set by limiters for two-lane undivided rural highways.” ●

Claims Canada

April/May 2009

Gary White Production Manager (416) 510-6760

non-member independent claims adjusting firms; insurance and reinsurance company executive, claims management 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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Defence counsel should seek to gain benefit of co-defendants’ contracts that limit professional liability issue for trial. The court ruled there was a genuine issue for trial, and thus the question of being able to use the architect’s contractual wording to limit liability for the other, non-architectural professionals was never addressed.

Heal said defence lawyers “should

always be pleading, if you’re in a case with an architect or someone who has a contractual limitation on liability, as a co-defendant, because you want to take advantage of that protection. We’ll finally get to a trial where that issue is going to get debated.” ●

Insurance lawyers defending professional liability claims should look into the possibility of limiting liability on the basis of contractual provisions, especially when co-defendents (such as architects) have contracts that limit the scope of liability.

Andrew Heal of Blaney McMurtry made the comment at the Blaney McMurtry “Insurance Law: Winter Update 2009,” held in Toronto.

Heal was outlining a number of strategies for defending professional liability claims. One way to limit liability, he noted, was to look at not only statutory limits on liability, but also contractual limits as well.

He noted architects often include language within their contracts that mirrors insurance policy language, and that expressly calls for contractual limits on their liability.

Lawyers tried to take advantage of this provision in one case connected with the leaking of a roof at an airport terminal. A number of professionals in the construction case were sued and the architects had language in their contract that limited their liability to $250,000.

The other professionals named in the suit argued that since the roof leaked because of a poor design, and the architects that designed the roof had a contract limiting liability to $250,000, the other professionals should be able to gain the benefit of the architects’ limited contractual liability.

The appellate court didn’t specifically address the argument, however, because it was asked to rule on whether the case involved a genuine www.claimscanada.ca

April/May 2009

Claims Canada

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MESSAGE

LA PLUME

From the President

Du Président RENO DAIGLE

What a winter this has been from many aspects. So much snow to shovel, so much news to digest and so many economic concerns over the past several months. Well, spring has sprung and I am sure we are all ready for a little sunshine, warmer weather and most importantly the emergence of the sports cars!

Your executive remains hard at work on several significant initiatives, one of which includes conducting market research to gain objective feedback from our membership and industry stakeholders regarding the association’s role, strategic initiatives, structure, services and expectations — in order that we are better equipped to identify industry trends, unmet needs within the industry, and opportunities for association growth and development. This undertaking is important for the association as we continue to reassess where we are and where we want to be. The process will include the assistance of a consultant to help facilitate the exercise. CIAA will publish research findings back to the stakeholders and I encourage all members and stakeholders to participate when called upon.

I was extremely pleased to attend the 5th Annual “Sugar Shack” in Montréal. Many thanks and sincere congratulations to AESIQ, our affiliate association in Québec, for hosting another tremendous event, with a record attendance in excess of 280 industry colleagues.

Traditionally, spring is the busiest traveling time for the National President and I am very much looking forward to attending our regional events across the country. I will be in Vancouver in late April attending their annual CIAA/CICMA Joint Conference. CIAA Pacific Region has partnered with the Insurance Institute this year in presenting a seminar later that same day, providing members with a great opportunity to gain their continuing education credits. In early May, I will join our Western Region executive at the CIAA booth, promoting the Association and our members at the Alberta Broker’s Conference Tradeshow in Jasper. I also look forward to representing CIAA and discussing matters of mutual interest and concern with our U.S. colleagues at the National Association of Independent Insurance Adjusters’ annual conference.

CIAA’s journal and claims manual are considered the most influential insurance claims publications in the country. Since the release of the 2009 CIAA Claims Manual in early February, national office has been inundated with requests for additional copies. I think it is important to share the following comments from claims managers across the country with our valued members, who through their support, help make these types of ventures possible.

“I can tell you on behalf of my coworkers and myself that we just love the manual — we keep one on our desk at all times for contact information regarding independent adjusting firms both within our own territory and beyond. Plus there is a ton of useful information.

“We really appreciated receiving those extra copies of the CIAA manuals. It is packed full of great information. We decided to send some overseas and keep some for ourselves. We have since ordered two

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April/May 2009

L’hiver a été pénible à bien des égards. Au cours de ces derniers mois, nous avons eu beaucoup de neige à pelleter et de nouvelles à assimiler. Nous avons également eu de nombreux soucis d’ordre économique. D’accord, mais le printemps est là. Je suis sûr que nous sommes tous prêts à accepter un léger ensoleillement et, surtout, à voir les voitures sport envahir les rues!

Vos dirigeants continuent de travailler sérieusement sur plusieurs projets importants, dont une étude de marché auprès de nos membres et des personnes intéressées de l’industrie. Cette étude vise à obtenir des données objectives sur le rôle, les enjeux stratégiques, la structure, les services et les perspectives d’avenir de notre association. Elle nous permettra de mieux déterminer les tendances et les besoins latents de l’industrie et de saisir les occasions de développement et d’accroissement. Cette démarche est importante pour notre association, alors que nous continuons de réexaminer notre situation actuelle et future.

L’embauche d’un consultant nous facilitera la tâche. L’ACEI communiquera les résultats de l’enquête aux personnes intéressées. Je demande donc à ces derniers et aux membres de collaborer lorsqu’ils seront sollicités.

C’est avec grand plaisir que je suis allé à Montréal assister à la 5e fête annuelle de la Cabane à sucre. Je remercie et félicite sincèrement l’AESIQ, notre association québécoise affiliée, pour avoir organisé ce joyeux événement. Un nombre record de plus de 280 de nos collègues de l’industrie y étaient présents!

Traditionnellement, le printemps est la saison au cours de laquelle le président national se déplace le plus souvent. J’ai vraiment hâte d’assister aux diverses réunions qui se tiendront à travers le pays. Je serai à Vancouver fin avril, pour la conférence conjointe annuelle de l’ACEI/ACDSA. Cette année, la section de la région pacifique de l’ACEI et l’Institut d’assurance, organiseront conjointement un séminaire qui se tiendra plus tard dans la même journée. Les membres auront ainsi une occasion unique d’obtenir des crédits en formation continue. Début mai, je serai au stand de l’ACEI avec l’exécutif de la région de l’Ouest, pour promouvoir notre association et ses membres lors de l’Alberta Broker’s Conference Tradeshow à Jasper. J’aurai aussi le plaisir de représenter l’ACEI à la conférence annuelle de la National Association of Independent Insurance Adjusters durant laquelle j’aborderai, avec nos collègues américains, des sujets et des préoccupations d’intérêt mutuel.

La revue et le Claims Manual de l’ACEI ont la réputation d’être les publications les plus influentes en matière d’assurance des sinistres dans notre pays. Depuis la publication du 2009 CIAA Claims Manual début février, le bureau national est inondé de demandes pour des exemplaires additionnels. Je pense que nos membres liront avec plaisir les commentaires suivants reçus de directeurs de sinistres de partout au pays. C’est grâce à vous et à votre soutien que de tels projets voient le jour!

‘Je peux vous dire, en mon nom et en celui de mes collègues, que nous aimons le manuel. Nous en gardons toujours un sur notre bureau.

www.claimscanada.ca

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supplies of these manuals from you. I must tell you that the response to your manual has been terrific, especially from our offices in the U.K. The information is very useful”.

“We think your claims manual is excellent. It is a great resource book.

Thanks for the effort in publishing it for us on a yearly basis”.

“This is a useful guide for locating adjusting firms available in Canada for us to use”.

“Thank you for the copy of the claims manual. This book serves as a good reference for learning material for training adjusters, especially new ones and the guiding principles is great for new and old to help adjust claims. The book is a handy reference for limitations. It serves as a quick guide to adjusting firms across Canada where we write business. It is one more tool used to help our company serve the public better.”

I have always believed business, like life, is a reciprocal arrangement.

You have to give something back in order to make things move ahead. Congratulations CIAA members — the industry appreciates your professionalism! ■

Il nous permet d’obtenir des informations de contact concernant les sociétés d’experts indépendants de notre territoire et d’ailleurs au pays.

On y trouve, de surcroît, des tonnes de renseignements utiles.’

‘Nous avons vraiment apprécié le fait de recevoir ces exemplaires supplémentaires des manuels de l’ACEI. Ils sont remplis d’informations importantes. Nous avons décidé d’en envoyer quelques-uns outre-mer et de garder le reste pour nous. Depuis, nous en avons commandé d’autres à deux reprises. Je dois vous dire que l’accueil qui leur a été réservé a été extraordinaire, en particulier dans nos bureaux du Royaume-Uni. L’information est très utile.’ ‘À notre avis, votre claims manual est excellent. C’est un merveilleux livre- ressource. Merci de faire l’effort de le publier chaque année à notre intention.’

‘C’est pour nous un guide très utile pour situer les sociétés d’experts en sinistres dont nous avons besoin au Canada.’

‘Je vous remercie pour l’exemplaire du claims manual. Ce livre est un bon outil de référence où trouver le matériel d’apprentissage pour les experts en formation, surtout les débutants. Les principes de base sont précieux comme aide de règlement des sinistres, tant pour les nouveaux que pour les anciens experts. Le livre est également fort utile pour la limitation de responsabilité et permet de trouver rapidement les sociétés d’experts en sinistres canadiennes avec lesquelles nous faisons affaires.

C’est un outil de plus qui aidera notre société à mieux servir le public.’

J’ai toujours cru que les affaires, comme la vie, sont faites d’ententes réciproques. Il faut savoir donner quelque chose pour les faire avancer.

Mes félicitations aux membres de l’ACEI — l’industrie apprécie votre professionnalisme! ■ Translation provided by Henry Arcache, Themis Translations.

NATIONAL EXECUTIVE 2008 – 2009 PRESIDENT Reno Daigle, CIP, CLA, FCIAA Crawford & Company (Canada) Inc. 326 McIntyre Street W. North Bay, ON P1B 2Z1 Phone: (705) 476-2120 Fax: (705) 476-9280 Email: Reno.Daigle@crawco.ca

SECRETARY Marie C. Gallagher, FCIP, CRM McLarens Canada 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 Email: marie.gallagher@mclarens.ca

1ST VICE-PRESIDENT 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 Email:pkernaghan@kernaghan.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 Email: Randy.Labrash@crawco.ca

2ND VICE-PRESIDENT Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 Email: Mary.Charman@crawco.ca

PAST-PRESIDENT Fred R. Plant, AIIC Plant Hope Adjusters Ltd. 16 Coronation Drive Moncton, NB E1E 2X1 Phone: (506) 853-8500 Fax: (506) 853-8501 Email: fplant@planthope.com

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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 Email: pbattle@ciaa-adjusters.ca DIRECTOR John R. Smith Crawford & Company (Canada) Inc. 166 Charing Cross Street Brantford, ON N3R 2J4 Phone: (519) 759-5760 Fax: (519) 759-5691 Email: John.Smith@crawco.ca

DIRECTOR John Jones, BA McLarens Canada Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 Email: john.jones@mclarens.ca DIRECTOR Carol A. Messervey, CIP, FCIAA, FIFAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 Email:cmesservey@marshadj.com

DIRECTOR Wendy Fralick, CIP Cunningham Lindsey Canada Limited 50 Burnhamthorpe Rd. W., Suite 1102 Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: wfralick@cl-na.com

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With a rapidly decreasing entry to exit ratio, changing the stereotype of insurance is key to attracting the millenials into the coop.

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BY LAURA KUPCIS

he first image conjured up for many students when the word insurance is used, is a figure dressed in expensive clothes; someone serious, humourless, powerful, brash, slick and shifty, according to focus groups conducted by The Insurance Institute of Canada. It seems Tommy Lee Jones in Men in Black is the picture of insurance.

Right on the heels of that is the stereotype of the travelling salesman.

Thoughts around insurance tend to go straight to the negative, not only for consumers in general, but for students, as well: Insurance is evil, insurance companies are out to rip you off, there are no benefits to paying insurance. In fact, there are some who have such a negative view of insurance that pests is a subcategory of insurance on Wikipedia. It seems someone felt so strongly about the insurance industry that they took the time to create a link between insurance and vermin. (http://en.wikipedia.org/wiki/Category:Insurance) While overcoming negative stereotypes about the insurance industry is certainly beneficial to boost consumer confidence, the

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need is far greater when it relates to attracting new faces into the industry.

The insurance industry is facing a recruitment and retention problem, which will only increase over the next five to 10 years, according to the Insurance Institute’s research study A Demographic Analysis of the Property & Casualty Insurance Industry in Canada, 2007-2017.

As a large number of Baby Boomers look to retire from the insurance industry, there are currently not enough students or young persons interested in filling those vacant roles.

In 1976 the entry to exit ratio in the Finance, Insurance, Real Estate and Leasing industry was 3.5, by 2006 it had dropped to 0.6, according to the Labour Force Survey in the Institute’s report. Census data in the report shows that the entry to exit ratio for insurance adjusters and claims examiners was 1.2 in 1991 and by 2001 had dropped to 0.5.

“The entry to exit ratio is horrendous,” Heather Matthews, chair of the Canadian Independent Adjusters’ Association’s (CIAA) career recruitment planning committee, notes.

She went on to note that while there exists a temporary lag in the retiring of Baby Boomers due to the current economic situation, the industry cannot lull itself into a false sense of security, because when these Boomers have recouped their losses they will retire and there will still be proportionately far more people leaving than coming in.

Most currently working in the insurance field are there because they “fell into the job.” Other more recent additions to the field, stumbled into insurance while looking for a stable, longterm career after having worked in other industries that didn’t prove to be as stable.

Elliott Spagat, program coordinator for the business — insurance program at Seneca College, notes that about 50 per cent of the students in his class have family members in insurance, while another 25 per cent fall into it by accident because the insurance program is the first business program that appears on the school’s website. There are roughly 25 per cent who are there because they thought it was an interesting program. www.claimscanada.ca

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These figures suggest that there is an opportunity for the industry to target college students, no longer relying on filling positions through happenstance.

There is, however, a large question market as to how the industry can recruit the next generation of insurance professionals.

For customers and those not considering a career in insurance, insurance is boring, slow moving, lacking innovation and full or bureaucratic red tape.

For those currently working in the field, or studying to eventually enter the field, insurance is exciting, ever changing and recession-proof.

Two parallel views of the same industry show the gap between those working in the field and those not even considering working in the field.

How to bridge the gap between those two viewpoints must be determined sooner rather than later.

Reasons for not choosing insurance Aviva Canada sponsored two separate Harris/Decima surveys of 1,000 Canadians in early 2008. The consumer surveys found that more than one-third of the 1,000 polled believe that insurance companies are all the same, 71 per cent believe that insurance companies are always looking to increase prices and 61 per cent believe the industry hides behind complicated legal jargon to avoid paying claims. More than 50 per cent of Canadians surveyed hold a negative perception of home and auto insurance companies. Only 21 per cent agree that insurers are “genuinely interested in helping their customers,” while 40 per cent disagree with this statement If this is the consensus of the general public, there is little doubt that young students might feel the same way about the insurance industry.

Job seekers gravitate to companies they know and can connect with, Helen Bozinovski, senior vice president of human resources for Aviva Canada Inc., notes.

A random poll conducted by Daniel Plant, a third year commerce student at Queen’s University, of his peers in the economics and commerce programs found that: • there is confusion about the insurance industry and what

career opportunities exist; • there is no recruitment or communication with young graduates; • the insurance industry is viewed as a fallback plan when other options are not available; • nobody knows what people in the industry do; • insurance is boring; • there is a lack of education about the potential within the industry — the potential for marketers, sales, finance, accounting staff, etc; • there is no contact with people in the field. Successful recruiters bring the CEO in to talk to graduates, which sends a strong message to young graduates that they are the future and important. The CEO is able to discuss the different aspects and divisions of the company because they have worked their way up; • more marketing is necessary — while the insurance industry sponsors events there is no mention about what the industry actually does and the variety the insurance industry offers.

It’s not just Queen’s University students who notice a lack of presence on campus. Cyrus Molavi, a third year Bachelor of Commerce student at University of Victoria, notes that he is interested in pursuing a career in government and banking upon graduation, partially due to the strong on-campus visibility and the availability of co-op jobs.

“I have never considered a career in insurance,” Molavi notes. “Insurance is only tangentially mentioned in class, and there is little, if not no, campus education or participation from major insurance industry players.”

Further to that is the lack of insurance-related jobs posted on university career sites. As an example, Plant notes that on the Queen’s University career postings, out of 298 postings aimed at economics majors in February of this year, two were insurance-related, both at Lombard and for a graduating stu-

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dent. There were no summer or co-op positions available, which would allow much of the training to be completed prior to graduation, Plant points out.

According to Plant, all the financial, accounting and corporate firms offer summers positions. “Perhaps Lombard and their associates in the industry would have more luck if they opened the door.”

Perhaps it’s worthwhile for the industry to question those students that did make the conscious decision to enter the industry in order to gain insights on what the draw is that shatters the stereotypes. Ask any insurance program student, and typically they’ll tell you that when they announced to family and friends their career plans, the remarks they received were less than congratulatory. Rather, they were often met with comments about travelling salespeople, how much of a rip-off insurance is, how premiums are too high and how parasitic the industry is.

Still, these students that choose the industry cite the opportunity for chal-

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lenging careers with growth, advancement opportunities and good earning potential, Elaine McCormick, director of human resources at Cunningham Lindsey Canada, notes.

What’s attractive about the industry For those who have seen past the stereotypes, the industry is very rewarding. The idea of dealing with and measuring risk is what attracts Kyle Vickers to insurance. Currently Vickers is a first-year student in Seneca College’s business — insurance program. Furthermore, the freedom of movement around the industry is appealing to him.

“It sounds like there’s very little monotony, it’s always moving around, so there’s new legislation or new kinds of risk that people are trying to insure,” Vickers notes. “But the job security is definitely there, too.”

Nelio Jordao, graduating business — insurance student at Seneca College, agrees that the stability is a draw, as is

the money that can be made.

For Jessica Cuvaj, graduating business — insurance student at Fanshawe College, the opportunity for movement within the industry is a huge draw.

“I love the job security and I love that you can do so much with it,” she says. “I want to get into claims, but I love that if it doesn’t work out for me, it’s just another experience and . . . you can take what you learned and move into a different area. I like the options.”

According to the Insurance Institute, students are most interested in a career that demonstrates variety: different roles (brokers, underwriters, adjusters, and more), different skill sets required (knowledge gained in a different sector can be applied in insurance), different types of insurance, different types of things insured (insurance is everywhere), different points of entry, etc.

For others, the insurance industry proved to be a lucrative second career, one guaranteed to be there in the long haul.

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young adult life assuming he would take over the family business. Unfortunately, due to the economy, he was forced to close the consumer electronics store. While attending a staff party at his wife’s office, he happened to meet another guest at the event, Gilbert Fournier, an adjuster at Plant Hope. Levesque assumed that a job in insurance meant sales, which peaked his interest due to his background.

But Fournier told him that he was an adjuster; he doesn’t sell anything.

Levesque began researching insurance adjusters — learning that there is investigation and interaction with people and the public. “And I said that job is a job for me,” Levesque chuckles. “It’s a job that you don’t sit in your office every day, you can go out and you see new people.”

He likes that he works in an industry where the product is a necessity.

“For me, it’s like as if I won the lottery,” Levesque says of working as an adjuster. “I wanted to have a good job and I wanted to work. I want to be able to serve people and be busy.”

For others, insurance was not even

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on the radar while going to school.

When Sameer Ahmad first started his MBA at the Ivey School of Business, his intent was to focus on the financial industry, initially in the corporate banking sector, but also opportunities that would provide a flavour of the various areas in the industry. He ended up working in insurance completely by chance.

Ahmad, who graduated in September 2008, happened across a Prudential plc posting on the career website wherein participants would work in various areas of the companies business, including insurance, for 18-25 month assignments over a period of four to five years.

As he works in the field in Vietnam, Ahmed, senior manager in the corporate strategy department at Prudential, is learning that insurance is certainly not boring compared to banking, and that there are so many parts of the world where there is tremendous room for growth, especially in Asia.

Ways to improve While the industry definitely affords a lot of opportunity for those who choose to enter it, finding a way to intrigue young students has proved challenging. There is a general consensus that the industry needs to become more involved with high school, college and university students, but how to go about doing this does not always have a straightforward and surefire solution.

Campus involvement and student recruitment at the college and university level is one area that needs improving.

“If there was more awareness about the industry in general, and the reputation of the industry was positive, there would be more interest in a career in insurance from students,” Molavi points out.

This could be done through information nights, sports and event sponsorship on-campus fundraisers, as students become very familiar with the companies that are at events on a regular basis.

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Molavi gives an example of a small technology company that supports the student’s society at UVic and because of this, the company’s co-op position is one of the most hotly contested.

“Everyone knows who they are and many are considering pursuing a job there after graduation,” he adds.

Christina Welton, branch manager for Peterborough and Kawartha Lakes at McLarens Canada, notes that in addition to the events, the industry needs to be visible at job fairs and on university and college websites to help make the business a little less mystifying.

“We have an exciting array of potential for the students or anyone else looking for employment but if they don’t know about us, how can they consider us?” she notes.

Cuvaj agrees there needs to be more presence at job fairs. She went to a recent career fair at Fanshawe College and out of roughly 60 companies, there were only two insurance companies present.

Students need to be informed of all the possibilities that exist for a career in the insurance industry, an industry which is not only personally, but financially rewarding as well.

The industry would be more attractive if people saw the type of work that had to be done — that it is challenging and rewarding and helps people in the end, Plant says.

The word insurance does not in itself attract or lure young people into the industry, Wendy Fralick, AVP of quality and education/privacy officer at Cunningham Lindsey Canada notes.

Young people want to choose careers that are highly exciting and they are often attractive to jobs that have a large capacity for great creativity. “It does not take a lot of communication with students to open their eyes to the fact that insurance adjusting can be just that — an exciting career,” she notes. “There is a sense of belonging in the insurance industry,” Fralick, who sits on the CIAA’s career recruitment planning committee, notes. “Although it is a huge industry, there are many industry associations that bring people together and everyone has something in common and the industry can be quite social.”

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Expressing the benefits during faceto-face time with students is essential.

Letting them know that the industry offers stability, variety, recognition, rewards, advancement, challenges and community reach.

Furthermore, the breadth of career options as well as the education levels, personality types and experience that are sought for various roles: risk manager, underwriter, marketing representative, claims adjuster, loss control specialist, appraiser, broker and agent,

“It will be a long journey, but it is not a tough one, it simply takes time and passion.” ~ Heather Matthews claims investigator, actuary, needs to be expressed, Carey-Ann Oestreicher, vice president of business development and communications at The Insurance Institute of Canada, suggests.

“I think part of the solution is some in-the-trenches work,” Matthews notes.

“We have to educate people,” about the career options available in the industry.

Starting this education at the high school level is another suggestion for increasing interest in the industry. Students most often are only aware of careers their parents have or their friends’ parents have, and even at that,

it’s usually just a passing awareness.

“If kids were to have people to answer questions if they are interested — and you can’t force anybody to do anything — but just generally answering questions and making information about the industry available to them in a way they can understand,” Cuvaj notes, “then there’s something there for them to look in to.”

Welton, who sits on the CIAA’s career recruitment planning committee, agrees that if students understood what job availabilities there are in the industry, they would start to consider them and enter the education stream to allow that potential.

Gabriela Hrdlicka, graduating insurance student at Mohawk College, suggests finding a way to implement insurance into the business courses in schools. Currently, the courses cover the basics, such as economics, accounting and law, but there are no lessons on insurance.

There needs to be interaction with guidance and career counselors so that information about the insurance industry can be passed along to student, in addition to co-op placements and summer employment opportunities, McCormick, who sits on the CIAA’s career recruitment planning committee, notes.

Meetings should be set up with the various boards of education across the country to determine what venues are open to the industry to reach the student-wide population, Fralick adds. It must be determined, with their help, what the best age to introduce insurance to student is and how can specific education about the industry be implemented into the curriculum.

Matthews notes that the key to attracting youth seems to be a connection to mainstream media. She notes interest is definitely peaked when she discusses that adjusters are able to work on claims such as Hurricane Katrina and Heath Ledger’s death.

There is a great deal of grassroots work that needs to be done and those in the industry must become ambassadors; people must take time to get out to all levels of schools and talk about what the industry is really like, Matthews says.

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buzz and each company can start with their own staff,” she adds.

Another means for attracting new recruits to the industry is a mentorship or internship program. Brian Laur, manager of insurance and risk management for the Toronto Community Housing Corporation (TCHC) runs an insurance intern program, wherein a qualified candidate from within the community is hired for a one-year working term with the risk management team. The corporation has substantial liability and property retentions and manages most claims internally.

The intern is enrolled in the Insurance Institute and begins working alongside the risk management department investigating liability and property losses. They attend mediations, landlord-tenant hearings, work with fire investigations, contractors, produce scope of damage reports, draft reports to our independent adjusters and lawyers, attend loss reduction inspections, interview claimants and witnesses and participate in claim settlements, Laur notes.

“Our goal is that by October, the intern will have two institute courses and a basic understanding of insurance and claim process making them suitable for employment as junior adjusters,” he notes.

These are students who have graduated from college or university and are looking for work experience. Often they are not familiar with insurance, they are looking for real-time job experience that they can use in the future, Laur notes. However, once they start working on the job, they start to enjoy the investigation and analyzing and responding to claims, in addition to the independence of the job.

“The current lad that’s working for me was typical, he didn’t really have any insurance background, he was looking for working experience,” Laur says. “He’s now convinced that he wants to be an independent adjuster and his friends who are all completing university are looking at him and he keeps coming in saying how do they get in.”

The idea of being an independent adjuster is almost considered an infectious disease among this intern’s friends, he says.

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A mentorship program is a wonderful idea, because as opposed to youth being stuck in a classroom, they are out in the field and getting tangible handson experience, Welton says.

Turning the ship around The internet is also a valuable marketing tool when reaching out to young students.

Students are often searching the web for educational choices that will lead them to an exciting career. In many cases the first introduction to insurance might be the only chance to lure them in to the industry, so it had better be interesting. “We must redefine insurance so that whoever is looking at the insurance link becomes immediately aware of the different choices within insurance, with information that promotes an exciting career for the reasons we all remain in this sector throughout our careers,” Fralick suggests.

Unfortunately, the negative perception about insurance has been around for so long and is so prevalent that it will take time, energy and dedication to turn this ship around, Fralick says.

She recommends the formation of a strategic planning committee, with individuals from every sector of the industry to focus on: • Defining the public’s perceptions that create a negative stereotype of the insurance industry; • Re-defining the insurance industry’s vision as to what it is and how it would like the public to see it; • Creating a strategic plan on how it can go forth in order to create this new image with delivery processes that are economically favourable and that will be most effective in reaching the public; • Establishing realistic time frames; • Determining accountability; • Determining processes to measure success of public’s new perception of insurance industry • Identifying successes and identifying images that should remain unchanged; and • Revising the strategic plan as necessary.

“It will be a long journey but it is not a tough one, it simply takes time and passion,” Matthews says.

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S spotlight

No Stone Left Unturned At P.C.A. Adjusters, ensuring that all aspects of a claim are covered is a top priority.

BY LAURA KUPCIS

efore closing a file, P.C.A. Adjusters ensures that all the T’s are crossed and the I’s are dotted.

“We don’t process claims here, we investigate and adjust them and that’s our main focus,” David Cernak, president of P.C.A. Adjusters notes. “We like to make sure that there is nothing left unturned, that everything has been covered.”

What started as a one-office company with two employees in 1970 in Montreal has grown into a three-office operation with 14 staff covering Eastern Ontario. This is not including the newest addition in Belleville, Ont. scheduled to open in May. This is in a big part thanks to the dedication of the entire staff doing the most thorough job possible every time.

“Experience the difference experience makes,” Cernak says.

B

Not just a ma and pa shop P.C.A Adjusters was founded in Montreal in 1970 by Val Cernak and was federally chartered in 1971. By the late ’70s, the staff count had risen from two to 28.

The company moved from Montreal to Ottawa in 1978, and opened up its second office, this one in Cornwall, Ont. in 1998. In 2001 the company 18

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opened a third office, this time in Kingston, Ont. and is currently working on its fourth location in Belleville.

Opening a new office poses challenges in and of itself, what with all the unknowns, but Cernak is confident in the markets the company works with and the need for another location within those markets.

“It’s rounding us out much better as a regional firm,” Cernak says. “As a regional firm if one particular area in the region gets hit we take a team approach. One office gets inundated and a lot of the players from the other offices will jump in and work as a team in getting everything resolved — especially on the service side of things for our markets.”

Focusing on customer service Are there plans for further expansion? “You can never say never,” Cernak chuckles. “We’ll just have to see how the market handles itself right now. From what I gather there seems to be a whole lot of shaking going on!”

Cernak hopes, however, that there might be a positive to the shaking economy: that it might help to bring back old-school service values across the industry — something P.C.A. has never lost sight of. He notes that the main focus across the industry as of late

seems to be on expense containment rather than on the policyholders who are providing the industry with its livelihood. “The cost containment can happen much more effectively by controlling an insurer’s exposure to a loss,” Cernak notes.

The goal is to provide the insured and the insurer with the level of professional service that they are paying for.

“Their premium is paying for insurance, yes, but it’s also paying for a service to be taken care of in the event of a claim and we just think that’s been overlooked,” Cernak points out. “Following Val’s (the founder) belief that we must always remember that the policyholder is buying what you are delivering.” The claims process takes time and by speeding it up, much of the service and the good points in the claims experience are taken away.

By hiring the levels of professionals required, who understand that providing top-notch customer service is a priority, P.C.A Adjusters is able to guarantee that they stand out in the service they provide to customers.

“Everybody takes a very personal approach to their file, paying special attention to detail, to ensure that both the insured public and the [insurance] companies themselves are getting the information that they need an in a www.claimscanada.ca

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timely manner,” Cernak says. “We do a full and proper job and bill our time accordingly. We don’t work off book rates, we don’t work off a set structure.

The actual time that is spent working on a file is what is billed, no more, no less.”

Constant training is a priority And in order to ensure that the files are worked on by the most skilled adjusters, the company supports training industry-wide, be it accident benefits or legislative changes, or required software or attending seminars. The company supports their staff in the quest to complete their CIP or FCIP or any other investigative degree, in addition to reimbursing any costs associated with that.

“We have had the good fortune of gathering a team of individual adjusters that stand out on delivering a quality product and quality service and are well-diversified in the breadth of knowledge that they have,” Cernak says.

But it isn’t just about work all the time at P.C.A. Adjusters. There is a great deal of emphasis placed on respect and fairness and understanding. Staff meetings are held offsite as a way to get away from the office to clear the mind and come up with new ways www.claimscanada.ca

to improve business or productivity.

Holiday office parties are treated as a time to get together and do something creative, be it heading out of town on an excursion or chartering a bus and heading somewhere in town.

Even heading out to trade shows becomes a company affair and not just something attended by upper management, providing staff with the opportunity to meet with clients and keep in contact with the industry.

And being in constant contact with its peers is important for P.C.A. Adjusters. This is why being a member of the Canadian Independent Adjusters’ Association is so essential.

By being involved, the company is able to stay abreast of what is happening within the industry and what changes are coming down the pipe, Cernak notes. Not to mention, the associations one can build with other member firms. “We’ve built great relationships with a number of firms from one end of the country to the other, and we do a lot of third party administration work with them,” he adds.

And what is coming down the pipe at P.C.A. Adjusters? Comfortable growth with a continued emphasis on professional claims handling coupled with customer service excellence.”

Standing (l-r): Eric Colson, Bkin., C.I.P; Patrick O’Shaughnessy, BA; Andrew Lillico, BA; David Cernak, President; Matthew Stevens, C.I.P. Seated (l-r) Tracy Dawson; Jennifer Graham, Hons BA., C.I.P; Marion McVey, C.I.P. April/May 2009

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Bedbugs A Problem from the Past Is Coming Back

BY JEFF GIBBS

problem from the past is coming back, showing up in a number of places, even in high-end hotels.

I remember hearing stories growing up about my grandmother walking into hotel rooms in the 1930s and pulling back the sheets to check for scurrying bedbugs.

Over the years, techniques and chemicals to deal with bedbugs seemed to virtually eliminate the problem.

When they did appear, high power chemicals were brought in, places were cleaned, and comfort levels restored.

But now “bed bugs have also made a comeback in the U.S.,” according to the University of Kentucky’s Department of Entomology. “They are increasingly being encountered in homes, apartments, hotels, motels, dormitories, shelters and modes of transport. International travel and immigration have undoubtedly contributed to the resurgence of bed bugs in this country.

Changes in modern pest control practice — and less effective bed bug pesticides — are other factors suspected for the recurrence.” 1 In an article about the increase in reports of bedbugs, a spokesperson for Abell Pest Control tells CTV.ca that, “About 85 per cent of our technicians now continually deal with bed bugs . . .

We see them in any transit destination, the Niagara belt, Toronto, Vancouver — pretty much in every city across the country.” 2

property policies would not cover a bedbug infestation.

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problem can exist.

The starting point, like any other claim, is to determine if coverage might be available and what questions you need to ask in your investigation to determine the coverage issue. If you are also dealing with a potential liability situation, you need to determine the legal basis for any claim, then investigate your claim accordingly. Understand the principles which would apply to determine the value of the claim, both for reserving purposes and, if liability exists, for ultimate settlement negotiations.

Property policies For property policies, review the wording. Named perils polices generally don’t provide coverage since bugs are not a listed peril, and most all perils property policies have an exclusion for “vermin.” Dictionary definitions for the term vermin include “small animals or insects, such as . . . cockroaches, that are destructive, annoying, or injurious to health,”3 and “small common harmful or objectionable animals (as lice or fleas) that are difficult to control.”4 If there is a vermin exclusion, the typical

Legal liability If property policies do not cover bug infestations, when could you see a legitimate claim? Your claims will usually be liability claims, especially when there is either a physical or a psychological reaction. Most people are not accustomed to seeing bedbugs and we live in a very litigious age.

Just because bedbugs are found does not necessarily create legal liability for resulting damage. There has to be a duty, a breach, and resulting damages.

Bedbugs have been found in basically all settings, no matter how clean they are kept. Simply having bedbugs present does not mean that a significant physical injury or harm results. Toronto Public Health notes in a Fact Sheet that, “Currently there is no evidence that bed bugs transmit blood-borne infectious diseases such as Hepatitis B, Hepatitis C or HIV. It has been determined that these viruses do not replicate inside the insect’s body, and animal model studies have never been able to demonstrate insect-to-animal transmission. Infestations, however, can cause anxiety, secondary infections, allergic reactions and financial hardship.” 5 Duty of care created by statute Statutes can create a duty of care, which, if breached can create liability in tort or contract. This responsibility is not absolute, and often knowledge is www.claimscanada.ca

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required for there to be liability. In provinces with Occupiers Liability legislation, property owners are held to a duty of “reasonable care” to ensure the premises are “reasonably safe”.

Innkeepers are held to a level of conduct and cleanliness by various innkeeper and related acts. Rental properties can come under legislative control, both under landlord-tennant legislation, and various health bylaws.

Toronto Board of Health says that landlords are responsible for ensuring that homes are pest free, and tenants are responsible to cooperate with the landlords in making this happen.6

Duty of care created by case law While legal principles related to duty of care and negligence can always be applied to show the applicable duty of care, there is very little specific case law dealing with bedbugs.

Reported cases in the last few years which mentioned bedbugs attempted to use their presence as evidence in either child custody cases or mental competence cases.

Cases decided between 1983 and 1994 dealt with landlord-tenant situations or property sale situations. In Fleming v. Bradwin Properties the tenant alleged bedbugs and cockroaches in a furnished apartment, but stayed for months without written complaint. The judge allowed partial abatement of rent, feeling the situation could not be as bad as claimed since no written complaints were made.7 Hagan v. M. Bergen involved premises infected with bugs, including bedbugs, and repudiation was made within reasonable time.The judge held the tenant was entitled to vacate and was not required to give specified notice.8 Perison v. Watson involved a property that was sold, infested with bedbugs and the buyer was not advised of the situation. The judge held there was a fraud in the sale of the property because of this failure to advise. These cases have little to do with typically insurance claims.

Cases decided between 1933 and 1957 dealt with several issues. In Kruciak v. Antoniuk the landlord alleged the tenant was responsible for bedbugs, and www.claimscanada.ca

the court would not decide on a summary basis.10 In Hurt v. Keroack representations were made there were no bedbugs on the premises, the court held this was a condition of sale, and rescinded the purchase agreement.11 In Bowes v.

Fec the court held found an implied condition existed that the premises would be in a fit state for their intended use and allowed rescision.12 Karasevich v. Brin-

boim ruled the other way, holding nothing was said or asked about bedbugs when the property was viewed by the tenant, no representations were made about condition, the claimant was not protected, and there was no implied term in the contract about condition.13 Martin v. Larsen was a landlord-tenant case on the other side, it was shown that infestation of premises with bedbugs came through

Security Services Physical evidence – often key to winning a court case – is increasingly important to protect. The courts have recently asserted that the proper collection and preservation of evidence is vital to its admissibility.

The security professionals at ASAP are specially trained to handle and protect evidence at the scene of a fire or disaster. They can also help reduce the risk of liability concerning public safety and theft.

ASAP Fire Scene Videography Services ASAP takes scene documentation to the next level with its new Professional Video Documentation Services. At ASAP, we record with high quality digital video equipment operated by technicians who have over 30 years of combined fire scene experience. With the professional visual documentation of all contents and scene damage, clients have the added advantage of providing an expeditious overview in the event critical issues are later disputed.

24-HOUR EMERGENCY RESPONSE

1-877-923-ASAP (2727) www.asapsecured.com April/May 2009

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tenant’s fault, and the tenant breached the implied duty to use the property in a tenant-like manner.14 As you can see from the cases, under the right circumstances, there can be a duty owed by a landlord, by a tenant, and by someone offering a property for occupancy.

Damages If liability exists, what are damages?

In hotel situations the adjuster is involved because the hotel’s internal customer service did not resolve the issues or demands made are beyond beyond what is reasonable. Generally damages must be foreseeable. Foreseeable items include temporary housing (or a change of rooms at hotel) and cleaning costs for any contents which might be contaminated by the bedbugs. As well, the normal minor dis-

comfort, rash, etc, is also foreseeable.

Minor anxiety, secondary infections, allergic reactions and financial hardship may also be foreseeable.

Abnormal psychological reactions, claims for ruined vacations, and out of the ordinary physical reactions, need to be closely examined. As the Supreme Court pointed out in the Athey case,15 thin skull situations can create damages, while crumbling skull ones only result in damages to the extent of the aggravation.

Summary Bedbugs are on the rise. Generally first party policies exclude damage caused by vermin. If you get a liability claim, be sure to properly assess the situation, starting with the duty of care. If liability is present, check to see if damages claimed are foreseeable.

Jeff Gibbs, F.C.I.P, C.R.M., J.D.(LL.B.) is currently part of Crawford’s Quality Division, is an active participant in Crawford’s Professional Standards reviews and is casualty supervisor for Western Canada. He is a former lawyer and implemented and ran the first ISO quality system for an adjusting firm in Canada.

1.http://www.ca.uky.edu/entomology/entfacts/ef63 6.asp 2.http://www.ctv.ca/servlet/ArticleNews/story/CTV News/20071115/bedbug_spread_071117/200711 19/ 3. http://www.thefreedictionary.com/vermin 4.http://www.merriamwebster.com/dictionary/vermin 5. www.toronto.ca/health/bedbugs/pdf/healthcareprofessionals.pdf 6. http://www.toronto.ca/health/bedbugs/pdf/rightsandresponsibilities.pdf 7. 1994 CarswellOnt 2879 8. 28 Man. R. (2d) 271 [1984] 9. [1983] B.C.W.L.D. 092 10. [1946] 3 W.W.R. 252 11. [1943] 1 W.W.R. 715 12. [1933] 1 W.W.R. 101 13. [1957] 22 W.W.R. 613 14. 59 B.C.R. 398 [1944] 15. Athey v. Leonati, [1997] 1 W.W.R. 97

we assess all kinds of risk Liability Risk - Risk Reduction - Risk Control - Coverage Analysis - Litigation Defence Risk Management Counsel of Canada is a national association of independent law firms with expertise in providing legal advice and representation to insurers, insureds, brokers and companies with self-insured or high SIR liability exposures.

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BLANEY MCMURTRY LLP | CARFRA & LAWTON | CHOMICKI BARIL MAH LLP | COX & PALMER | DONATI MAISONNEUVE LLP | FILLMORE RILEY LLP KELLY SANTINI LLP | LINDSAY KENNEY LLP | MCKERCHER LLP | SCOTT HALL LLP | STEIN MONAST LLP

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What is a ‘Human Factors’ Expert Anyway?

BY JASON YOUNG

ave you ever wondered exactly what ‘human factors’ referred to, but were to afraid to ask?

Over the last decade, human factors experts have played an increasingly significant role in the handling of claims and litigation. Presumably, most claims stem from human involvement at some point, so a better question to ask might be which types of claim investigations require human factors expertise.

Human factors refers to the study of the interaction between people and their environment, in particular with technology, products and tools.

Human factors experts study the limitations of the human body in three general areas: physical limitations, sensory limitations and cognitive limitations.

Physical human limitations include strength limits for various tasks, speeds of ambulation, range of motion and anthropometry (the study of bodily dimensions of population groups). The study of traditional ergonomics typically falls within this category.

Sensory human limitations include perception, nighttime vision, visual masking, sound masking, tactile sensation and tolerance to acceleration and deceleration.

Cognitive human limitations include reaction time, complex decision making, mental fatigue, control display design, signage design/complexity, warnings/instruction design and the ability to estimate speed, distance or time.

In the insurance and legal industries, “human error” is typically identified as a contributing factor to a claim.

However, human factors goes beyond just the assessment of human error. For example, human factors knowledge

H

www.claimscanada.ca

Jason Young

can be used to help assess the accuracy of witness estimations, the appropriateness of a particular safety factor, or the time required for a particular series of decisions.

Consider the following three actual case studies where the insurer or plaintiff benefited from the use of human factors expertise.

Case 1: A garage repairman working on a crank at the top of a ladder is seriously injured when his ladder suddenly slides out. Knowledge of the maximum pull/push force that a male can typically exert in that position allowed for a detailed analysis of the potential for ladder slippage at various ladder angles.

Case 2: A male driver, traveling at night on a well-lit road, struck a pedestrian who ran onto the road and was seen well in advance by a driver traveling in the opposite direction. A precise nighttime visibility study revealed that the background lighting behind the pedestrian was drastically different from the two driver perspectives. As a result, the view of the pedestrian was completely masked during the time of interest from the insured’s direction of travel.

Case 3: A man operating a ‘jet-skitype’ recreational watercraft was thrown forward off of the vessel and injured in mild-to-moderate waves, despite years of experience on previ-

ous models of recreational watercrafts.

A human factors assessment of the product revealed that the stability control system for that model of watercraft did not provide users with feedback regarding the current setting of the control system. As a result, an incorrect setting was used, leading to an unexpected loss-of-control.

Case 4: A female driver, driving home during the day, encountered a sharp curve while travelling at high speed and lost control, resulting in fatal injuries to the occupants of the vehicle. Opposing counsel produced a road assessment report, demonstrating that the curve was too sharp and claiming that the warning signage was insufficient. After assessing the signage and finding it to be appropriate for that curve, a human factors expert then noted the driver was thoroughly familiar with the road in its current condition, having driven it regularly for years. Using human factors sources, it was demonstrated that the driver’s expectation of the curve made the issue of signage irrelevant to the case.

In summary, human factors expertise adds a valuable layer of knowledge to litigation and multi-disciplinary claim investigations that may otherwise go unnoticed. The use of a human factors expert to draw upon reliable studies and data can be the difference between a successful litigation process and a ‘Daubert junk science’ ruling.

Jason Young, P.Eng., is a senior investigator and head of the personal injury unit at Giffin Koerth Forensic Engineering and Science, specializing in the human factors of motor vehicle collisions, personal injuries, and product failures.

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p24-25 Lease RMC

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Read the Lease!

New Brunswick Court of Appeal Reviews Impact of Lease on the Insurer’s Right of Subrogation Against the Lessor

BY MONIKA M.L. ZAUHAR AND MATTHEW R. HILTZ

n its natural state, the relationship between the landlord (lessee) and tenant (lessor) is relatively straightforward. If either the lessee or lessor negligently causes damage to the leased premises, there would be a right to sue for losses arising from the negligence.

Modern leases have modified this natural position, often by including “covenants to insure” requiring either the lessee or lessor to obtain insurance coverage for the benefit of both parties.

This nexus of contract and insurance law has been subject to judicial scrutiny over the years, so the recent New Brunswick Court of Appeal decision of Pharmacie Acadienne de Beresford Ltée v. Beresford Shopping Centre Ltd./Ltée1 should be of great interest to insurers.

It is trite law that the right of an insurer cannot be greater than the right of action of its insured because subrogation is the same as substitution: An insurer cannot succeed where an insured cannot succeed. If the insured lessee has contractually insulated its lessor from liability claims, then its insurer will also be foreclosed upon when attempting to attach liability to the lessor. It follows from this premise that much attention is focused on the exact words used by the contracting parties to limit liability, and more importantly, the context in which those words are used.

Any discussion on landlord and tenant covenants to insure should begin with four Supreme Court of Canada cases: Agnew-Surpass Shoe Store Limited v. Cummer-Yonge Investments Ltd.2; Ross Southwood Tire Ltd. v. Pyrotech Products Ltd.3; T. Eaton Company v.

Smith4; and Greenwood Shopping Plaza v. Beatty5. In these cases the Supreme Court laid down several principles regarding such clauses6:

I

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Monika M. Zauhar

Matthew R. Hiltz

• a landlord’s covenant to insure the leased premises is a covenant for the benefit of the tenant and immunizes the latter against any claims by the landlord (or its subrogated insurer) for covered losses; • a lessee’s covenant to pay insurance premiums transfers the risk of loss under the insured perils to the landlord and immunizes the tenant against subrogated or landlord claims for such losses; and • in certain circumstances, privity of contract may exist between the lessor’s employee and the lessee, thereby insulating them from liability.

Most recently, the New Brunswick Court of Appeal has held that a tenant’s covenant to insure may insulate the landlord from subrogated or other claims7.

In Pharmacie Acadienne, some of Pharmacie’s leasehold improvements,

inventory and office equipment were damaged due to water escaping from a frozen sprinkler pipe, allegedly due to Beresford’s negligence. Pharmacie’s insurer paid its claim and brought a subrogated claim against Beresford.

Beresford then brought a third party action in negligence against the law firm that drafted the lease for failing to insulate it against subrogated claims.

The trial judge decided in favour of Pharmacie and the law firm appealed.

Determining the intention of the parties is the touchstone for interpreting the covenant to insure and therefore the courts will look at all admissible and relevant indicators and not just the words themselves when construing a contract. The doctrine of contra proferentem, a rule by which any ambiguities in the language will be construed against the drafter, may also be employed. Two of the disputed clauses were taken directly from the Standard Forms of Conveyances Act8. In particular, clause 24 of the contract (Covenant 38) was essentially intended to insulate the lessor from any liability for personal or property damage resulting from its negligence. The disputed parts of Clause 28 (Covenant 42) are: All lessee’s insurance policies shall contain a waiver of subrogation.

All policies of insurance placed by the lessee shall contain a waiver or waivers of subrogation against the lessor and the lessee waives, releases and discharges all rights, claims and demands whatsoever which the lessee might have or acquire against the lessor arising out of damage to or destruction of the building or any part thereof occasioned by any of the perils insured against by the lessee or which the lessee has agreed to insure against, whether or not such rights, claims and demands shall arise www.claimscanada.ca

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through the negligence or other fault of the lessor, his servants, agents or contractors.

Pharmacie offered two arguments: First, it did not covenant to insure the property for the benefit of Beresford and second, that even if it did, the second paragraph of Clause 28 restricts the operation of the first. The judge was not impressed with the first argument, given that Clause 28 is designed to apply whether or not an explicit covenant exists, “any of the perils insured against by the lessee or which the lessee has agreed to insure against”. The Court was more interested in Pharmacie’s second argument and since the contract was drafted by Beresford’s lawyers, contra proferentem would dictate an interpretation favourable to Pharmacie. The appellant took the position the first part of Clause 28 was an unlimited and independent covenant that is not restricted by the second part.

While the trial judge agreed with Pharmacie, the Court of Appeal found the lower court’s interpretation of the contract incorrect. The trial judge interpreted the emphasized words, “arising out of” in Clause 28 as meaning “for damage to the building.” However, the appellate Court noted the only claim the lessee could advance would be for integrated leasehold improvement because it lacked a proprietary interest in anything else. Following this logic, if the sole purpose of the clause was to insulate the lessor from claims for damage to integrated leasehold improvements, why did it not just say so? The Court concluded a more rational interpretation would be that the intention of the parties was to release all claims “loosely traceable to the occurrence of damage to the building” with the only condition being that the type of damage arise from an insured peril. The Court also found it significant that Clause 28 used very broad wording and the plural for both “claim” and “policy” (all policies . . . all claims). The Court also decided that contra proferentem did not apply as neither party had drafted the clause in question (or its underlying statute).

The Court ruled that Clauses 24 www.claimscanada.ca

and 28 of the lease operated together to create a coherent loss bearing scheme that limited the lessor’s liability to claims in negligence for uninsured property damage and which disallowed subrogated claims in negligence arising out of property damage falling within (at the very least) the class described in the second part of Clause 28. The object of Clause 28 was to favour the lessor’s insurer in relation to any lossbearing obligations.

Commercial lease arrangements are variable, as the landlord and tenant may use statutory language like in this case, or may outline their respective obligations via personalized language.

Regardless of the form it takes, if the Court determines its essence is to shield either party from liability, it will affect some or all of their insurer’s subrogation rights. As the New Brunswick Court of Appeal said in Pharmacie Acadienne, “ . . . if the ability to successfully prosecute a subrogated action is truly valued as a payout recovery option, a

close inspection of the lease is an absolute must.”

Monika M.L. Zauhar is a partner with Cox & Palmer in the Fredericton, N.B. office. She specialises in commercial and insurance litigation.

Matthew R. Hiltz, is an articling student at Cox & Palmer, Barristers & Solicitors in Fredericton, N.B. He is currently studying law at the University of New Brunswick.

Cox & Palmer is a member firm of the Risk Management Counsel of Canada.

1 2008 NBCA 12.

2 [1976] 2 S.C.R. 221.

3 [1976] 2 S.C.R. 35.

4 [1978] 2 S.C.R. 749.

5 [1980] 2 S.C.R. 228.

6 As summarized in “Tort Immunity: Covenants to Insure and Waivers of Subrogation” by Nigel Kent, Clark Wilson LLP at p. 13.

7 Atlantic Shopping Centres v. CNR (1985), 40 R.P.R. 185 (N.B.C.A.).

8 S.N.B. 1980, c. S-12.2.

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p26-27 Decoding Rehab

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Decoding Medical Rehabilitation Terms

BY JUDY FARRIMOND

n today’s multi-cultural society, there is no doubt it is helpful to know a second or even third language in addition to English. However, in the insurance industry, although being multi-lingual is an asset, the most critical language to have a solid understanding of is the ‘language of insurance’. The complex nature of insurance industry documentation sometimes makes it seem as though it is written in its own language: a cross between insurance, medical and legal terms.

To decode file information, the adjuster seemingly needs to be part insurer, part rehabilitation professional and part lawyer. Furthermore, many terms have abbreviations, making it all the more difficult to decipher the language.

A few of the most commonly used terms and their abbreviations include:

musculoskeletal system (i.e., complex system that includes bones, joints, ligaments, tendons, muscles and nerves) and function of the body, especially the spinal column and nervous system.

I

ABI = Acquired Brain Injury Injury to the brain which results in a change in its functioning be it temporary or permanent.

ADL = Activities of Daily Living Activities normally conducted daily including self-care (such as eating, bathing, dressing, grooming) work, homemaking and leisure. The ability or inability to perform activities of daily living can be used as a practical measure of ability/disability in relation to many injuries and disorders.

ADP = Assistive Devices Program Funded and managed by the Ontario Ministry of Health and Long Term Care with the objective of providing consumer centered support and funding to Ontario residents who have long-term physical disabilities and to provide access to personalized assistive devices appropriate for the individual’s basic needs.

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DOB = Date of Birth Date the client was born.

Judy Farrimond

Ax = Assessment Indicates the assessment that was recommended or conducted.

CCRC = Canadian Certified Rehabilitation Counsellor Designation for individuals engaged in rehabilitation counseling.

CLCP = Certified Life Care Planner Professional who has achieved the Certified Life Care Planning designation (usually a regulated health professional who has gone on to do further training). Trained to develop future care cost assessments/life care plans and/or critiques by outlining the injured individual’s current and future needs and quantifying the costs related to these needs over the client’s entire lifespan.

Typically completed for individuals who have experienced catastrophic injury or have chronic healthcare needs.

DOL = Date of Loss Date that the client’s injuries were sustained.

FAE = Functional Abilities Evaluation Assessment that tests and quantifies an individual’s physical abilities in order to determine his/her ability to perform essential duties related to work and activities of daily living.

FSCO = Financial Services Commission of Ontario An organization that integrates the operations of the former Ontario Insurance Commission, Pension Commission of Ontario, and Deposit Institutions Division of the Ministry of Finance. It is made up of three main parts: the Commission, the Financial Services Tribunal and the Superintendent and Staff.

CT or CAT Scan = Computed Tomography Scan or Computed Axial Tomography Used to diagnose a wide range of illnesses and injury because it has the ability to create computerized images of a combination of soft tissue, bone and blood vessels.

GCS = Glasgow Coma Scale A neurological scale that provides a reliable, objective way of assessing the conscious state of an individual based on criteria that provides a score between three (indicating deep unconsciousness) and 15 (indicating fully awake and responsive). The scale includes three tests: eye, verbal and motor responses and each value is considered separately, as well as in combination.

DC = Doctor of Chiropractic Medicine (Chiropractor) Registered healthcare professional trained in the relationship between the

IBC = Insurance Bureau of Canada national industry association representing Canada’s private home, car and business insurers. www.claimscanada.ca

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IE = Insurer Examination assessment by a regulated health-care professional that provides an objective review and examination of an individual’s injury/disability and necessary treatment.

LMS = Labour Market Survey Involves surveying potential employers specific to the client’s identified job/occupation. This outreach is combined with additional research via databases, the internet and employment periodicals about potential employers, job availability in desired geographic region(s), and salary information to provide a comprehensive overview of the job market specific to the client’s identified job/occupation.

MRI = Magnetic Resonance Imaging Diagnostic technique that produces computerized images of internal body tissues and organs by applying radio waves to induce a nuclear magnetic resonance of atoms within the body.

MSW = Social Worker with Master of Social Work degree Registered health-care professional trained to help people develop their skills and their ability to use their own resources and those of the community to resolve problems. Social workers can help assist individuals and families understand the complexities and changes following life-altering injury.

OT = Occupational Therapist Registered health-care professional trained to help individuals manage activities of daily living, as well as activities related to leisure and work (e.g., dressing, grooming, cooking and specific motor skills required for vocation).

PSW = Personal Support Worker Designation of individuals who assist in a wide range of rehabilitative activities to facilitate the rehabilitation process including: range of motion exercises, taking blood pressure, temperature and pulse, ambulating and mobilization, collecting specimens for medical tests, personal hygiene, meal preparation, grocery shopping, dietary planning, etc. www.claimscanada.ca

PT = Physiotherapist Registered health-care professional trained to assess and manage the underlying cause of joint, muscle and nerve injuries and provide treatment to restore function or, in the case of permanent injury, to reduce the impact of dysfunction.

RHP = Regulated Health-care Professional Designation of individuals who have met the requirements of a regulatory body and are governed by them. The Regulated Health Act regulates 23 health professions through various regulatory bodies called colleges that set the standards for skills, knowledge and behaviour for their members.

RMT = Registered Massage Therapist Designation of individuals who provide massage therapy. To become a Massage Therapist in Ontario an individual must complete a 2200 hour educational program at an educational institution recognized by the Ontario Ministry of Training, Colleges and Universities. The individual must register with the College of Massage Therapists of Ontario (CMTO)which includes the completion of certification examinations.

RN = Registered Nurse Designation of individuals who hold a Bachelor of Science in Nursing and are trained to provide medical care under supervision of a physician.

RRP = Registered Rehabilitation Professional Designation of individuals who work with people with disabilities and disadvantages and their families to provide services and supports such as assessment, affective/adjustment counselling, vocational counselling, case management and job placement services. They facilitate, manage and implement individual rehabilitation plans.

port to people with disabling conditions, chronic health, mental health and addictions.

RVP = Registered Vocational Professional Designation of individuals who provide vocational/employment services within the rehabilitation field. For example: vocational/employment counselors, job placement and job development specialists, supported employment counselors/coordinators, return-to-work coordinators, transition specialists, administer preemployment/job readiness programs, etc.

Rx = Medicine Indicates the medicine prescribed.

SCI = Spinal Cord Injury Injury to the spinal cord that results in a change in its functioning that is temporary or permanent.

TMJ and TMD TMJ is the temporomandibular joint — an important joint in the jaw.

Although it is the specific joint’s name, it is commonly used to describe a group of muscle disorders called temporamandibular disorder or TMD. It is the wide range of disorders that cause pain and dysfunction to the jaw and surrounding muscles.

TSA = Transferable Skills Analysis Identifies transferable skills and provides recommendations of suitable alternative jobs/occupations.

Tx = Treatment Indicates the therapy recommended or conducted.

Judy Farrimond, R.N., CLCP, is supervisor of complex and catastrophic services at Sibley Inc.

RSW = Rehabilitation Community Support Specialist Designation of individuals who provide front-line community based supApril/May 2009

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Social Networking Websites Changing the Face of Litigation and Document Production

BY GARY ZIMMERMANN

ocial networking websites are a relatively new phenomena which carry significant potential for parties to all sorts of litigation. For example, the police are now using such sites to locate criminals that have evaded detection for years. Also, the courts in Australia have recently allowed service of a default judgment on defendants by notification posted to Facebook. To this end, it appears as if the use of this new media is limited only by one’s ingenuity.

Because many of the claims made by plaintiffs are subjective complaints of pain accompanied by alleged disability, defendants have been looking for ways to verify or refute such allegations for years. Perhaps the best known method is through the use of a private investigator who takes photos or video of the plaintiff engaged in day-to-day activities. Then, when the photos contradict the plaintiff’s version of events, his credibility will be brought into question.

Based on the presumption that most of us want to be famous, there is a treasure trove of unused “surveillance” on the terabytes of data stored

by User Generated Content (UGC) sites like Facebook, You Tube and MySpace.

Arguably, the most dominant current social networking website is Facebook. As proof of its dominance, it has recently hit 200 million active users.

Such a “population” makes Facebook the fifth largest “country” in the world.

While Facebook has many features, each user’s account is broken down into four main categories: home, profile, friends and inbox.

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In simple terms, a home page contains a “news feed” which provides information about an individual user or his “friends” (as posted by the “friends”). The profile page will contain a “mini-feed” which provides information about the individual user or his “friends” (as posted by the individual). As such, recent items on one person’s profile page will form the basis for the recent items on his friends’ home pages.

Typically the information found on home pages and profile pages will include photos and videos. An astounding 850 million photos and eight million videos are uploaded to Facebook monthly. Such photos and videos can be “tagged” with the identities of people contained in them.

Then, by clicking one button, you can see all of the photos/videos which contain a specific person.

Further, profile pages include personal information such as marital status, sexual preference, work/education history, favorite activities, interests, and the like.

Finally, profile pages also include status updates, which generally advise a user’s “friends” what s/he is doing at any point in time. In fact, Facebook

suggests that at least 20 million users update their status daily. While my Facebook profile would never be able to brag that “Gary ran a marathon today” or “Gary benched 250 lbs”, such status updates are common.

Facebook boasts about its customizable privacy settings however, most people don’t know how to use them or opt not to use them because to limit the information opposes the concept of “social networking.”

While most people do not limit the privacy settings significantly, many do require that one must be a “friend” before seeing their profile. Such accounts are considered “private.”

With that said, strangely enough, it is common for people to accept friend requests from total strangers. While private investigators may be tempted to “befriend” their subjects (to get access to “private” pages), for reasons that go beyond the scope of this article, it is not recommended.

You Tube is another social networking website. It is devoted to the sharing of video clips. People can upload or view clips that range from personal family videos to commercially produced short films. You Tube suggests that it receives 10 hours of video uploaded every minute. Statistics reveal that over 150,000 videos are uploaded daily. While it too has certain privacy settings, the same are even more remote than those found in Facebook.

Finally, MySpace rounds out the top three social networking websites.

It is very similar to Facebook in that users post information for others to view and comment upon. The inforwww.claimscanada.ca

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mation includes specializing one’s web page including reference to moods, blogs, bulletins, videos and pictures.

The amount of UGC available on the Internet is truly amazing. There are hundreds of websites devoted to social networking. The number of nonexclusive conglomerated users is estimated to exceed one billion people!

How then does one get access to this wealth of information if the desired account is “private�?

At its basic level, for information to be producible in a civil action, it must be considered relevant and material to the proceedings. For example, the information found on various social networking websites will be considered irrelevant in a debt action. With that said, counsel for the defendants in a personal injury action will surely argue that where a plaintiff puts his health in issue and claims that injuries have affected his activities of daily living, the candid “lifestyle� information, photos and videos found on the social networking sites is entirely relevant and material.

Leduc v. Roman, a personal injury case decided in late February of this year, is one of the few Canadian decisions on the topic of relevance and materiality as it relates to UGC. In Roman the defendant appealed to an Ontario Superior Court Justice who ruled that the Master was correct in stating that “lifestyle� information should be referenced in the plaintiff’s Supplemental Affidavit of Records “even if it is contrary to his interests�.

But (unlike the Master) instead of finding that the defendant was on a fishing expedition, the Justice ruled it was reasonable for the court to infer the Facebook account contained information relevant to the proceedings.

While further production was not ordered on appeal, Justice D.M. Brown ruled that the defendant could crossexamine the plaintiff on his Supplemental Affidavit of Records thus ostensibly opening up the door for a further application to compel the Facebook records.

Assuming that the UGC information is relevant, what methods can be used to obtain such information? www.claimscanada.ca

First, a plaintiff can disclose printouts of the relevant pages voluntarily in the initial document exchange. With that said, social networking websites are new and this area of record production is far from settled law. In fact, most counsel on both sides haven’t even contemplated the use of social networking information in litigation.

As such, their continual absence from a plaintiff’s production is the norm and most often goes unnoticed.

Second, a defendant can seek to have records provided through the oral discovery phase of the litigation. In such case, the defendant will want to lay the proper foundation for the relevance and materiality of the peer network information.

The defence counsel will want to ask if the plaintiff has a social networking account. Assuming the plaintiff answers in the affirmative, the defence counsel will want to question the

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www.bdo.ca/advisory

ASSUR ANCE

| ACCOUNTING | TA X ATION | ADVISORY SERVICES

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plaintiff on the contents of such account. Does the plaintiff post pictures, videos, status updates? Have they been tagged in photos or videos?

The defence counsel will also want to lock the plaintiff into the information found on the site. To this end, they will want to ensure that the plaintiff is the only person that posts to the individual site and that they are in sole control of the individual accounts.

Once the foundation has been laid, defence counsel should ask for an undertaking to preserve the account in its current state until a printout of each of the relevant pages has been provided to the defendant. Such would include photos, basic information and even relevant emails.

A third method to obtain the documents can occur through an application brought by the defendant for a further and better Affidavit of Records.

Finally, many jurisdictions allow a party to compel production of relevant

and material documents held by third parties, not involved in the litigation.

While there are few precedents regarding the application of this principle to UGC websites, it should apply.

By way of example, a subpoena Duces Tecum without deposition (an order compelling a witness to provide specified documents, without oral evidence) was recently granted to the State of Florida in their criminal case against Casey Anthony. Some will recall that Casey Anthony was indicted for the first-degree murder of her twoyear-old daughter whom she did not declare missing for over one month. In that case, the subpoena provided that MySpace was to hand-over “[a]ny and all internet usage activity of record, whether current or deleted from the internet user’s page, including but not limited to: private messages, page comments, friends, friend requests, blogs, bulletins, IP addresses from visitors viewing profile, etc which pertain

CIAA New Members — February 2009 CORPORATE MEMBERSHIP Curo Claims Services – Waterloo, ON Georgian Claims Services Inc. – Barrie, ON Canadian Claims Services Inc. – Edmonton, AB ProFormance Adjusting Solutions Inc. – Whitby, ON INDIVIDUAL MEMBERSHIP Curo Claims Services Monica Kuzyk, FCIP, CRM

Waterloo, ON

Investigator

Licentiate

Canadian Claims Services Inc. David Riddell, FCIP, CRM Edmonton, AB Christine Maydew Edmonton, AB Marnie Mittelsteadt Edmonton, AB

Licentiate Investigator Licentiate

ProFormance Adjusting Solutions Inc. Tammie Norn, FCIP Whitby, ON

Licentiate

Crawford & Company (Canada) Inc. Fatima Chafi Hamilton, ON Anton Stadnikov, CIP Hamilton, ON Heather Matthews, CIP, CRM Kitchener, ON Lori Spencer Kitchener, ON Dennis Ferris, AIIA, CRM Ottawa, ON Rui Taborda Toronto, ON Laurie Sanford Waterloo, ON Laura Potts Waterloo, ON Marcie Trudeau Dartmouth, NS Cicely Sparks Dartmouth, NS

Student Investigator Licentiate Investigator Investigator Student Student Investigator Investigator Investigator

McLarens Canada Joseph Giannini, FCIP, CRM

Licentiate

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Gary Zimmermann is an associate with McLennan Ross in Edmonton, Alberta.

McLennan Ross is a member firm of the ARC Group of Canada Inc.

CIAA New Members — March 2009 INDIVIDUAL MEMBERSHIP Crawford & Company (Canada) Inc.

Georgian Claims Services Inc. Brian Polimeni Barrie, ON

Toronto, ON

to Casey Marie Anthony.” By analogy, an order should apply to any case where the records are relevant and material.

Because most social networking websites are less than five years old, there is very little case law in Canada (or elsewhere in the world for that matter) related to production of UGC. With that said, the rules of court in most jurisdictions already apply and it is simply a matter of applying the old rules to new technology. Through such process, there is a vast array of information, photos and videos that will go a long way to support or discredit many of the plaintiff’s allegations.

Warren Nicholson, ARM Mary-Lou Huculak,CIP William Adriaensen Kenneth Lloyd, CIP, CRM Gael Dicht, CIP Robert Sapinski Lee-Anne Klawsuc Melissa Ayotte Charles A. Morrison, CIP, CFEI Cuong Chau, B.Sc., CIP Richard Del Chiaro Sonal Patel Meghan Watson

Kamloops, BC Kelowna, BC Medicine Hat, AB Kitchener, ON North Bay, ON North Bay, ON Oakville, ON St. Catharines, ON Toronto, ON Toronto, ON Waterloo, ON Waterloo, ON Waterloo, ON

Investigator Investigator Investigator Licentiate Investigator Student Student Student Investigator Investigator Investigator Investigator Investigator

Marsh Adjustment Bureau Limited Sean MacDonald, B. Comm. Bedford, NS

Student

Canadian Claims Services Shannon Wiebe, CIP

Licentiate

Edmonton, AB

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The Economic Crisis The Impact on Business Interruption Losses

BY GERRY BOUWMAN

hile the signs have been there for some time now, the significant fallout that has occurred in the worldwide economic market became a reality to everyone this past September. In particular, and close to many of us who work in the insurance industry, the sudden fall of the AIG stock sent a signal that no particular industry is safe in these difficult economic times. However, life indeed does go on and in the insurance world, policies continue to be written, losses continue to occur and claims continue to be made.

From a standpoint of measuring the business interruption losses associated with the claims occurring in a time of economic turmoil, one must ask “how does the current situation affect the measurement of business interruption losses?” At first glance it may seem the answer would be a simple one: revenues can be expected to be down and the impacts are far reaching and affect businesses in many different ways. During both our internal training seminars and external client seminars, we always stress the need to fully understand the “affected business” and the economic climate it operates in before attempting to measure the loss. Never has this been more important.

In the process of measuring a business interruption loss, the first step is most often to project what revenues the business would have achieved, if not for the loss. In stable, predictable times this is an involved and at times, cumbersome task. Add in the instability of the market as a whole, the ability of companies to get financing, the bleak future outlook and the task of predicting what

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Gerry Bouwman

would have occurred becomes one that takes careful analysis. In order to predict what a business would have done, the following approaches are often used to develop projected sales levels: • Comparison to prior year and adjusted for revenue growth • Experience just prior to the loss • Comparison with budgets and forecasts • Comparison with industry trends In each of the above methods, the change in the market conditions that hit hardest in September 2008 could significantly impact the potential revenue levels that would have been expected in the last quarter of 2008. For instance a comparison of the revenue levels in the two years prior to an August 2008 loss may show significant gains. However, depending on the business, applying this growth to the loss period (which runs August to December 2008), could drastically overestimate the revenues that would have been earned.

Typically, a company prepares an annual budget in advance of its fiscal year end. Therefore, for calendar 2008 many companies would have projected sales in December 2007. The automak-

ers and their suppliers would be prime examples of companies that would have projected good to moderate sales levels throughout 2008. However, when the current crisis hit, and even prior to, automakers were in a state of declining orders and eventually into plant shutdowns as 2008 progressed. Therefore, you may have an auto parts supplier that expected steady revenue throughout 2008 and even continued to produce under those assumptions through the first half of 2008. However, assuming a loss in August 2008, those projections from late 2007 or early 2008 were unlikely to come to fruition.

Generally, utilizing industry trends and analyzing them before and after the loss should allow for a relatively good basis for projecting the expected revenue levels of a business. But, the continued decline of many commodity prices throughout the fall of 2008 indicates that in these current conditions, it cannot be assumed that there is a “reasonable floor” to base calculations on.

As an example, throughout the first half of 2008, steel prices soared and increased by nearly 100 per cent between January and July. Assuming a loss in August, one might expect that a similarly aggressive decline in prices would be unlikely to occur in the period from August to December 2008 and project losses based on July 2008 prices.

However, the current crisis did hit the steel industry and may now lead to assumptions that a loss, while impacting production, would result in no revenue loss whatsoever.

The effects of these impacts can be far reaching and cascading throughout many different industries. The domiwww.claimscanada.ca

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no effect certainly can take place in recessionary type conditions that we are currently in In Canada, we experienced a “white Christmas” all across the country for the first time since the early 1970’s. The snow continued to fall well into April, which tends to lead weary Canadians with sore backs to purchase snow blowers. Because of two consecutive snowy winters, snow blower sales have been quite high. If you were to assume a loss at one of these locations, you might expect to continue to project increasing revenue figures for the sale of snow blowers.

However, consider the following headline which was recently in The Globe and Mail, “Shutdown of U.S. motormaker leaves many retailers across the GTA sold out of or very low on inventory.” While many consumers were still looking and searching for a snow blower, the economic recession had resulted in the inability to manufacture something that was in high demand.

There is a need to be cautious in the current economic situation when placing reliance on past or historical results. It should be noted, the current situation can also result in instances where prior year’s results and budgets may in fact understate the potential revenue loss a business may suffer.

Walmart Canada saw its sales increase in September and October, largely driven by higher sales of food products as individuals chose to stay home and cook rather than dining out.

Kraft Foods and Campbell’s have also experienced significant gains following the market crash, again due to the consumer purchasing more staple foods and backing away from discretionary spending. While in many cases the current economic situation would result in decreases in projected revenues, there are others that will benefit from the same economic turmoil.

It is expected that eventually the economy will recover and revenues will return to prior levels at many businesses, impacting projections of revenue levels for several years to come as well. If we were to assume the economy slowly recovers in 2009 and in 2010, the 2008 and 2009 periods would www.claimscanada.ca

represent your base period in losses occurring in 2010. On first glance, an analysis would show significant growth occurring. However, this would in fact be largely due to the low revenues experienced as a result of the economic crisis and not represent a trend to be carried on into the future.

While policies continue to be written and claims continue to be made, for the foreseeable future business

interruption losses will need to be analyzed carefully to properly consider how the current economic crisis is impacting the business world.

Gerry Bouwman, CMA is a partner and vice president with Matson Driscoll & Damico Ltd. in the Toronto office.

Bouwman specializes in economic damage quantification and has handled losses throughout Canada and across the world.

GILBERTSON DAVIS EMERSON LLP Barristers and Solicitors

Practice restricted to CIVIL LITIGATION, INSURANCE LAW Including Defence, Subrogation, Personal Injury, Bad Faith & Punitive Damages, Legal Opinions, Coverage, Products Liability, General Casualty, Motor Vehicle Litigation, SABS, Disability, Life, Arson & Fraud Claims, & ADR Representation.

• ANGELA EMERSON • JOHN L. DAVIS • JOHN L. DAVIS PROFESSIONAL CORPORATION • R. LEE AKAZAKI • JODY W. ICZKOVITZ • JONATHAN J. WEISMAN • JAMES E. ADAMSON - Counsel

Suite 2020, 20 Queen Street West, Toronto, Ontario M5H 3R3 Telephone: (416) 979-2020 • Fax: (416) 979-1285 E-Mail: office@gilbertsondavis.com www.gilbertsondavis.com April/May 2009

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p34,35 EDUCATION FORUM

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education forum

A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA

Contamination Coverage Examining Environmental Claims n 1989, the oil tanker Exxon Valdez ran aground and discharged more than 10 million gallons of crude oil, polluting 1,300 miles of Alaskan coastline and over 10,000 square miles of ocean. Most environmental claims handled by loss adjusters are much less spectacular, but they happen frequently. This article discusses how to analyze environmental coverage.

Environmental claims may involve either bodily injury or property damage arising in various ways: oil spills from residential heating oil storage tanks; methane gas seeping into the basement of a home; gasoline getting into drinking water; the release of toxic fumes or substances; or the dumping or escape of toxic wastes. They may involve both first party coverage and liability coverage. Where coverage exists, adjusters must be careful to attribute it to the appropriate policy.

As in other claims, the policy obligations of both the insurer and the insured must be assessed, beginning with the scope of the insuring agreement. The loss adjuster considers whether an “accident” has occurred and whether there is any damage as defined by the policy.

I

Protecting the insurer’s rights Environmental claims often require significant investigation because years may have passed between the damaging event and its discovery. Estoppel is a serious concern, and insurers typically send the insured a reservation of rights letter or ask the insured to sign a non-waiver agreement. The loss adjuster should explain any specific coverage issues that are in question.

Late reporting of claims is a serious issue. If the insurer is not notified of the potential for loss early enough, the insurer may be prejudiced by the delay because details of deductibles, facultative reinsurance and aggregate limits may be lost.

Moreover, some reinsurance agreements contain sunset clauses limiting coverage to losses reported within a prescribed period. These clauses put limits on the reinsurer’s exposure to long-tail liability losses, which is particularly relevant to environmental claims.

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What happened when?

When damage occurs over a protracted period of time, an adjuster must determine whether the actual pollution-causing event can be pinpointed. For example, suppose drums containing toxic chemicals were buried or dumped. The loss would only be discovered once the drums had deteriorated, leaked and left detectable evidence of chemicals in the soil or the water table. The adjuster would have to try to establish when the actual “event” precipitating the leakage occurred.

Environmental claims often involve more than one policy term. An insurer on risk for more than one year may be exposed to the limits of each policy for each year of coverage.

When more than one insurer is involved over the pollution period, they may be asked to share the costs of defence or indemnification.

Policy? What policy?

The task of verifying whether a policy was in existence, what the limits were, and what wording was used can be espeEXCLUSION EXAMPLE In a current CGL wording, coverage is excluded for any “pollution condition,” which is defined as: A. the actual, alleged, or threatened spill, discharge, emission, dispersal, seepage, leakage, migration, release or escape of “pollutants”, or B. the actual or alleged existence of “pollutants”, regardless of premises, site or location, whether or not owned by any insured.

Pollutants are defined in the policy as follows: “Pollutants” means any solid, liquid or gaseous, or thermal irritant or contaminant including smoke, odour, vapour, soot, fumes, acids, alkalis, chemicals and waste.

Waste includes materials to be recycled, reconditioned or reclaimed.

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cially challenging. The onus of proving that a policy exists rests with the insured, who should be asked to produce the policy at the outset. If it is not available, the insured can be asked to produce other proof that coverage exists, such as correspondence from the insurer or broker, or proof of payment of premium. Other policies issued later may provide policy numbers or other references. Specialized policy search companies can be hired by the insured.

Once the insured proves that a policy exists, the onus shifts to the insurer to establish the existence of policy limits or exclusions. The loss adjuster may have to interview the underwriter for information on coverage issues. If nothing can be found in the insurer’s files, the broker may have records of policies going back many years. Former employees of the brokerage or the insurer may also be sources of information.

Containment and clean-up not covered Liability policies generally do not cover measures to prevent the possibility of a claim, such as costs incurred to contain a spill. For example, if a toxic chemical leaks from an insured’s storage tank and threatens to pollute municipal drinking water, clean-up measures might be required to prevent the contamination. However, the insurer might argue that the “damage” has not yet occurred and therefore the clean-up does not qualify for coverage.

Insurers have also argued that the cost of clean-up represents part of the cost of doing business: the waste produced in a manufacturing process is foreseeable and should be dealt with by the manufacturer as a matter of course.

Explicit exclusions Most liability policies contain a pollution exclusion. In older forms, exceptions to the exclusion provided limited coverage for certain events, whereas newer wordings contain a comprehensive exclusion (see sidebar) with options to buy back limited pollution coverage.

The broad wording of the pollution exclusion has led to some confusion about its intention. For example, courts have held that injury claims arising from inhalation of insecticide were not barred by an absolute pollution exclusion, on the grounds that a substance that can cause harm is not necessarily a pollutant — a pollutant is a toxic or particularly harmful material that is recognized as such in industry or by government regulators.

Another common exclusion is property owned, occupied or rented by the insured. In more current wordings this exclusion applies to real property. Suppose that a neighbourhood’s water supply has been contaminated and the source of the contaminant is the insured’s industrial site. Clean-up the site as ordered by the provincial authority entails the removal of contaminated soil from the insured’s premises.

The insurer may argue the soil is property the insured owns or occupies and is therefore excluded. www.claimscanada.ca

The personal property exclusion concerning care, custody and control also applies to pollution claims, as it does to other claims.

The question of causation Many different contaminants are present in the air we breathe, the water we drink, the food we eat, and the ground we walk on. Some are known to come from only one source; for example, dioxin contamination, which pollutes rivers and lakes, arises from the pulp-and-paper bleaching process.

Other contaminants can have many possible sources, both industrial and natural, alone or in combination. In a claims situation, the exact nature of the contaminant that caused the damage must be clearly established.

Once the contaminant is discovered, its source must be identified. Perhaps the insured is not responsible, or perhaps someone else shared in the polluting activity.

Causation is a subject for careful claims investigation, which will be the focus of the Education Forum pages in the upcoming June/July issue of Claims Canada.

This article is based on excerpts from the study material in the Claims Professional Series of applied courses – a core of the CIP Program that helps adjusters learn the functional knowledge and skills required of their profession.

)NDEPENDENT -EDICAL %VALUATIONS /CCUPATIONAL 4HERAPY %VALUATIONS &UNCTIONAL !BILITIES %VALUATIONS 6OCATIONAL %VALUATIONS 4RANSFERRABLE 3KILLS !NALYSIS ,ABOUR -ARKET $IAGNOSTIC 4ESTING &ILE 2EVIEWS Ìi \ {£È x£ä Ó{Èn v>Ý\ {£È x£ä nÇÈÈ Ì vÀii\ £ nÇÇ Îä{ ÓÓÎ i > \ v J>Àà °V> ÜiL\ ÜÜÜ°>Àà °V>

&OR !LL 9OUR !SSESSMENT 2EQUIREMENTS !CROSS #ANADA 8jj\jjd\ek I\_XY`c`kXk`fe J\im`Z\j @eZ%

April/May 2009

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p36-37 on the scene

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O on the scene

Peter Maurer and Bran Craig

On behalf of the Canadian Independent Adjusters’ Association, Ontario Region, Peter Maurer presented the Peter Uffleman Bursary to Bran Craig of The Co-operators at the Insurance Institute of Ontario, Conestoga Chapter Awards Luncheon on Feb. 26, 2009. The bursary, created in memory of Peter Uffleman who was actively involved in CIAA Ontario Region, is presented to the student with top marks in C14 Automobile Insurance — Part 1. Congratulations Bran! ●

Sandy Cyr, secretary of the Nova Scotia region of the CIAA, presents a cheque to Gilberte Theriault, chair of the Nova Scotia Insurance Women’s Association Cancer Crusade, during the February NSIWA meeting. ● Gilberte Theriault and Sandy Cyr Vince Brine is the new owner of Winmar Kingston.

A certified insurance professional with 27 years experience in the insurance industry both in management and adjusting, Brine required a broad knowledge of the services provided by restoration companies with a thorough understanding of the task involved and the people who performed them.

Vince Brine As an owner, he is committed to fostering long-term relationships, customer satisfaction and is devoted to servicing the insurance industry and their clients, according to a release.

Brine is certified through IICRC in fire, smoke, and water restoration who believes in continuing education and continues to take courses ensuring he is knowledgeable in all aspects of property restoration. ● The Ontario Pond of the Honorable Order of the Blue Goose has launched a redesign of its web site.

The new site has many great features to be explored including: • the 100th Anniversary magazine is available as a PDF on the “About US” page • All Past Most Loyal Ganders for the last 100 years can be found on the “Membership” page.

• The “Gallery” page is complete with a slide show, downloadable 3D software or individual photos.

• The “Events” page will house up-and-coming events with either PDF or Word documents for RSVPing.

To visit the newly redesigned site visit: www.bluegooseontario.org.

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Captain John Hosty has been appointed director for the new health, safety, environmental training and emergency response branch for Environmental Solutions Remediation Services.

Hosty will be responsible for development and implementation of a broad range of health and safety and environmental response training and emergency response planning John Hosty services that include: • hazardous materials handling; • regulatory compliance; • spill and emergency response; and • confined space management.

Cunningham Lindsey has entered into a definitive agreement to purchase GAB Robins’ international businesses (excluding its UK operations) and its U.S. forensic engineering firm EFI Global.

GAB Robins’ international businesses include operations in France, the Netherlands, Belgium, Ireland, South Africa, Australia, New Zealand, Malaysia, Taiwan, Hong Kong and China.

The transaction is expected to close within seven days.

The combined business will result in more than 600 offices and 5,600 employees in more than 70 countries.

The combined company will operate under the Cunningham Lindsey brand while EFI Global will continue to use its name.

EFI Global will continue to offer forensic engineering, fire investigation, environmental and specialty consulting services in the United States. Its clients include commercial, industrial, institutional, insurance, government, public and private entities that typically engage EFI Global for forensic analyses, defendable loss evaluations and strategic environmental solutions.

Brera Capital Partners LP will continue to own the loss adjusting businesses of GAB Robins in the United Kingdom, United States and Canada, as well as third party administration operations in the United States.

Philippe Bès, formerly the president of the international operations of GAB Robins, has been appointed CEO of the Cunningham Lindsey Group. “Cunningham Lindsey’s shareholders, Stone Point Capital and Fairfax Financial, see the strategic benefit of merging selected businesses of GAB Robins with Cunningham Lindsey to create an international business with truly significant scale and expanded global reach,” Bès said.

“This merger will provide our customers with expanded service capabilities and expertise while presenting employees of both companies with enhanced opportunities.” ●

Claims Canada Wants You! Claims Canada magazine wants you to send us your company news, appointments and event photos for possible inclusion within our ‘On the Scene’ department. Please help us share your items with the claims industry across the country.

For more information, please email: laura@claimscanada.ca www.claimscanada.ca

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The Insurance Institute of Nova Scotia hosted an Institute Appreciation Night on Feb. 26. The event was in honour of those who have contributed to the success of the Institute over the past year. The nearly eighty guests were treated to a two-hour reception complete with drinks and hors d’oeuvres, background music provided by a flutist and cellist, and a presentation highlighting the Institute’s achievements over the past year. Attendees were able to participate in a quiz for a chance to win one of 10 gift bags, a gift certificate for a massage and a gift certificate for two to dinner and the theatre. Certificates of appreciation were given to special guests. ●

The Canadian Association of Fire Investigators South Central Ontario Chapter 006 is hosting a two-day educational seminar and national AGM on Sept. 30 and Oct. 1, 2009.

The event is being held at the Embassy Suites Niagara Fallsview Hotel in Niagara Falls.

Highlights of the seminar will be the practical approach of effective fire scene investigations, mandatory fire sprinkler systems in new homes, from the fire scene to the court room, interviewing a serial arsonist & how to catch him.

For a complete agenda, speaker information package and registration form, log on to www.cafi.ca. ●

Alan L. Austin

Alan L. Austin has joined the Vancouver branch of Kernaghan Adjusters.

Austin’s expertise includes large transportation claims in both Canada and the United States.

He has also adjusted large complex property losses, professional liability matters (including broker E&O) and larger jeweler block claims. ●

INSURANCE INSURANCE CLAIMS CLAIMS EDUCATION EDUCATION BURSARY BURSARY Canadian Canadian Insurance Insurance Claims Claims Education Education Benevolent Benevolent Foundation Foundation OBJECTIVE • To assist with funding needed to further education of Canadian students entered in an insurance claims related discipline.

• Applications must be received at the CIAA National Office by July 31st annually.

• Awards will be announced at the CIAA Annual General Meeting in August.

VALUE • A minimum of one $500.00 award annually.

DONORS • Canadian Independent Adjusters’ Association • Canadian Federation of Insurance Claims Associations.

SUBMISSION • Applications are available at the Canadian Independent Adjusters’ Association National Office: CIAA Centennial Centre, 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Tel: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca

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p38 CIAA NSC

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National Standing Committees 2008 – 2009 ADVISORY 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 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 Fred R. Plant, AIIC Plant Hope Adjusters Ltd. 16 Coronation Drive Moncton, NB E1E 2X1 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: fplant@planthope.com John R. Smith Crawford & Company (Canada) Inc. 166 Charing Cross Street Brantford, ON N3R 2J4 Phone: (519) 759-5760 Fax: (519) 759-5691 E-mail: John.Smith@crawco.ca Wendy S. Fralick, AIIC Cunningham Lindsey Canada Limited 50 Burnhamthorpe Rd. W., Suite 1102 Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: wfralick@cl-na.com John Jones, BA McLarens Canada Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@mclarens.ca Carol A. Messervey, CIP, FCIAA, FIFAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: cmesservey@marshadj.com CAREER RECRUITMENT PLANNING Heather Matthews Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca Wendy S. Fralick, AIIC Cunningham Lindsey Canada Limited 50 Burnhamthorpe Rd. W., Suite 1102 Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: wfralick@cl-na.com Christina Welton, FCIP McLarens Canada 743 Fortye Drive Peterborough, ON K9K 2G4 Phone: (705) 740-0023 Fax: (705) 740-2296 E-mail: christina.welton@mclarens.ca

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CONSTITUTION & RULES John Jones, BA McLarens Canada Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@mclarens.ca CONVENTION Jean-Marc Laurin, FPAA, CRM, FCIAA Cunningham Lindsey Canada Limited 1250 Guy Street, Suite 1000 Montreal, PQ H3H 2T4 Phone: (514) 938-2124 Fax: (514) 938-5445 E-mail: jmlaurin@cl-na.com DISCIPLINE Fred R. Plant, AIIC Plant Hope Adjusters Ltd. 16 Coronation Drive Moncton, NB E1E 2X1 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: fplant@planthope.com EDITORIAL 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 Gary A. Ellis, BBA, FCIP, RF, FCIAA, CLA, FIFAA Crawford & Company (Canada) Inc. 18 Great George Street Charlottetown, PE C1A 4J6 Phone: (902) 566-1011 Fax: (902) 894-3044 E-mail: Gary.Ellis@crawco.ca W.E. (Ted) Baker, BA, CFE, FCIAA Baker, Bertrand, Chassé & Goguen Claim Services Limited 3660 Hurontario St., Suite 601 Mississauga, ON L5B 3C4 Phone: (905) 279-8880 Fax: (905) 279-5338 E-mail: webaker@bbcg.ca EMERGENCY MEASURES Roger S. Bickers, CIP, FCIAA McLarens Canada 600 Alden Road, Suite 600 Markham, ON L3R 0E7 Phone: (905) 946-9995 Fax: (905) 946-0171 E-mail: roger.bickers@mclarens.ca Carol A. Messervey, CIP, FCIAA, FIFAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: cmesservey@marshadj.com FCIAA 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

April/May 2009

Robert V. Pearson, CLA, FCIAA HBA Adjusters Ltd. Suite 201 – 1217 Centre Street NW Calgary, AB T2E 2R3 Phone: (403) 245-4599 Fax: (403) 287-1775 E-mail: rpearson@hbaadj.com Jean-Marc Laurin, FPAA, CRM, FCIAA Cunningham Lindsey Canada Limited 1250 Guy Street, Suite 1000 Montreal, PQ H3H 2T4 Phone: (514) 938-2124 Fax: (514) 938-5445 E-mail: jmlaurin@cl-na.com

NOMINATING Fred R. Plant, AIIC Plant Hope Adjusters Ltd. 16 Coronation Drive Moncton, NB E1E 2X1 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: fplant@planthope.com Reno Daigle, CIP, CLA, FCIAA Crawford & Company (Canada) Inc. 326 McIntyre Street W. North Bay, ON P1B 2Z1 Phone: (705) 476-2120 Fax: (705) 476-9280 E-mail: Reno.Daigle@crawco.ca

FINANCIAL 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

John Jones, BA McLarens Canada Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@mclarens.ca

Reno Daigle, CIP, CLA, FCIAA Crawford & Company (Canada) Inc. 326 McIntyre Street W. North Bay, ON P1B 2Z1 Phone: (705) 476-2120 Fax: (705) 476-9280 E-mail: Reno.Daigle@crawco.ca Fred R. Plant, AIIC Plant Hope Adjusters Ltd. 16 Coronation Drive Moncton, NB E1E 2X1 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: fplant@planthope.com FORMS Tammie Norn, CIP ProFormance Adjusting Solutions Inc. 32 Bayern Drive Whitby, ON L1M 0A3 Phone: (905) 431-8774 E-mail: tnorn@proadjusting.ca INDUSTRY LIAISON & PROMOTION Craig J. Walker, CIP, FIFAA, FCIAA Maltman Group International 1049 McNicoll Avenue Toronto, ON M1W 3W6 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 401 – 5204 – 50 Avenue Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca LEGISLATIVE Russell E. Malkoske, BA, FIIC, CLA QA Adjusting Company 279 Provencher Blvd.

Winnipeg, MB R2H 0G6 Phone: (204) 233-8844 Fax: (204) 233-7793 E-mail: qa-russ@shaw.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 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

Carol A. Messervey, CIP, FCIAA, FIFAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: cmesservey@marshadj.com PRIVACY James B. Eso, BA, CIP Crawford & Company (Canada) Inc. #280, 2985 Virtual Way Vancouver, BC V5M 4X7 Phone: (604) 574-6275 Fax: (604) 739-3817 E-mail: Jim.Eso@crawco.ca Wendy S. Fralick, AIIC Cunningham Lindsey Canada Limited 50 Burnhamthorpe Rd. W., Suite 1102 Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: wfralick@cl-na.com 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 WAYS & MEANS 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

CIAA REGIONAL PRESIDENTS 2008 – 2009 NEWFOUNDLAND & LABRADOR Neil F. Lacey, CIP, FCIAA Crawford & Company (Canada) Inc. 44 Torbay Road, Suite 300 St. John’s, NL A1A 2G4 Phone: (709) 753-6351 Fax: (709) 753-6129 E-mail: Neil.Lacey@crawco.ca NOVA SCOTIA Jane Richardson, BBA, FCIP Crawford & Company (Canada) Inc. 237 Brownlow Avenue, Suite 120 Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Jane.Richardson@crawco.ca NEW BRUNSWICK & PRINCE EDWARD ISLAND Luc Aucoin, BBA, FCIP Plant Hope Adjusters Ltd. 16 Coronation Drive Moncton, NB E1E 2X1 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: laucoin@planthope.com QUEBEC/AESIQ Charles A. Berthiaume Réclamations C. Berthiaume 44, Chemin d’Oka Saint-Eustache, PQ J7R 1K5 Phone: (450) 491-6165 Fax: (450) 491-6230 E-mail: rcb@reclamationscberthiaume.ca ONTARIO John D. Seyler, AIIC Cunningham Lindsey Canada Limited 1240 Commissioners Rd. West, Suite 206 London, ON N6K 1C7 Phone: (519) 432-8335 Fax: (519) 432-0054 E-mail: jseyler@cl-na.com MANITOBA Cory R. Malkoske, B.Sc., CIP QA Adjusting Company 279 Provencher Blvd.

Winnipeg, MB R2H 0G6 Phone: (204) 233-8844 Fax: (204) 233-7793 E-mail: qa-cory@shaw.ca SASKATCHEWAN Rob Johnston Midwest Claims Services 320 Gardiner Park Court Regina, SK S4V 1R9 Phone: (306) 522-1656 Fax: (306) 569-1256 E-mail: rob@midwestclaims.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 James B. Eso, BA, CIP Crawford & Company (Canada) Inc. #280, 2985 Virtual Way Vancouver, BC V5M 4X7 Phone: (604) 739-3816 Fax: (604) 739-3817 E-mail: Jim.Eso@crawco.ca

www.claimscanada.ca

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O on the scene

Bill Hanlon

The fourth annual HKMB HUB Hockey Challenge for Charity took place on Mar. 11 at the Air Canada Centre. Almost 40 players gathered for a friendly game of hockey, with Team Claims beating out Team Underwriters by a score of 9 to 4. The event raised $9,400 for the United Way and $222 for WICC. ● L'Association des experts en sinistre indépendants du Québec (AESIQ) held its fifth Annual Sugar Shack on March 19. Over 280 industry colleagues were in attendance, including Reno Daigle, CIAA national president, and Charles Berthiaume, AESIQ president. ●

Senior Estimator

Masterclean Contracting & Cleaning is proud to announce that Bill Hanlon, Senior Estimator has successfully completed the requirements for RIA’s Certified Restorer (CR) certification and acknowledge Bill’s diligence and mastery of the certification.

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Masterclean services the Greater Toronto area north to Midland as well as Oakville to Oshawa. Since 1971, the Masterclean team is a trusted emergency service provider for damage due to floods, fire, smoke, wind and any other property damage issues.

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Customer service is our number one priority.

1-800-361-6900 www.claimscanada.ca

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O on the scene More than 150 exhibitors from across Canada showcased the latest and greatest in the industry at the Ontario Independent Insurance Adjusters’ Association’s Professional Development & Claims Conference in Toronto. In addition to the trade show, there were a number of seminars with topics that spanned from a legal update on accident benefits to becoming a great recruiter, and chronic pain and associated disorders. Ron MacLean of Hockey Night in Canada fame was the luncheon keynote speaker. He regaled delegates with memorable moments from his broadcasting career. During the lunch the OIAA presented a cheque for $6,845 to the Big Brothers and Big Sisters of Canada. ●

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O on the scene Insurance industry guests from the CICMA/CIAA Joint Conference escaped the winter chill at the 3rd annual Joint Conference Cocktail Party. The event, hosted by Blouin, Dunn and Giffin Koerth, was held at the Loose Moose Tap & Grill immediately following the conference on Feb.3 â—?

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CIAA/2009ad/CUW

4/1/09

9:35 AM

Page 1

THE CIAA COMMITMENT Commitment Over 1,200 Canadian Independent Adjusters FROM COAST TO COAST have pledged to follow the Rules and Regulations and adhere to the CODE OF ETHICS and PRIVACY CODE of the association.

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CIAA - Dedicated to fair practice and integrity on all claims-related services.

Canadian Independent Adjusters' Association L'Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Avenue West, Suite 100 Etobicoke, Ontario M9C 5K6 416-621-6222 Toll Free 1-877-255-5589 Fax 416-621-7776 E-mail info@ciaa-adjusters.ca

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O on the scene The Flock of The Ontario Pond of the Honourable Order of the Blue Goose gathered at the Old Mill in Toronto on Feb. 18 for the 2009 initiation of the Goslings. The evening started with a dinner and cocktails before Jamie Dunn, custodian of the goslings, presented the 15 candidates. Only Ontario ganders were present during the initiation ceremony. Jack Fitch, most loyal grand gander, read the charge and Bob Jackson, most loyal gander, read the admonition. â—?

www.claimscanada.ca

April/May 2009

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O on the scene The seventh annual GK (KOVA) Cup was held on Mar. 26 at Moss Park arena. Over 20 players came out for a friendly game, which saw the It’s Our Faults, coached by Laurel Dimaso of Masterclean, beat out the No Faults, coached by Sandy MacSpayden of DirectIME, by a score of 9 to 7. Mark Howey, Mark Fabbroni and Rob Parkinson were the Stars of the game. A reception was held immediately following the game at P.J. O’Brien’s, where Tom Moran was awarded the Herbie Sportsmanship Award and Scott Broad received the Horse’s Ass Award. ●

The Toronto Insurance Women's Association (TIWA) hosted its annual wine and cheese reception on Feb. 12. Well over 1,000 guests indulged in fine culinary offerings, enjoyed live music and raised their wine glasses with fellow industry peers at this year's reception, held at the Metro Toronto Convention Centre– Constitution Hall. ●

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