Claims Canada June/July 2009

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June/July 2009

BUILDING ON THE BASICS Increasing Adjuster Knowledge

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Contents JUNE/JULY 2009 • VOLUME 3 • NUMBER 3

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Cover Feature 12 Building the Basics With the release of FSCOs recommendations for the five-year auto review, industry representatives discuss training for adjusters working in accident benefits.

BY LAURA KUPCIS

Spotlight 18 The Independent of the North At Arctic West Adjusters Ltd. adjusting claims means working with claimants in communities with no road access and no availability of experts and technicians.

BY LAURA KUPCIS

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Education Forum 38 Environmental Claims There are two aspects to investigating an environmental claim: The role of experts and the importance of assessing the insurer’s exposure.

News Features 20 Caci v. MacArthur Recent case remains a major factor in determining the relation between Civil justice systems and the Court of Appeal.

BY LAUREN BLOOM and BRENDAN LANIGAN

22 Managing Catastrophe Claims Tips for adjusters when handling large loss claims.

BY LAURA KUPCIS

24 Career Connections The Career Connections program is improving the understanding of the industry, illustrating the role of insurance in society and encourage job seekers to pursue a skilled professional in the field.

BY PETER HOHMAN

30 Take Your Life to a 10 Learn how to reduce the impact stress and negative thoughts has on your life — both personally and professionally.

32 Scoping the Loss — Two Perspectives Tips to effectively scoping a loss to ensure an appropriate estimate is reached.

BY GREG MILLER and GRAHAM DICK

36 Defining Pain Disorder How to effectively assess pain in chronic cases.

By ZOHAR WAISMAN

26 Addressing Different Viewpoints It is becoming necessary for insurers to seek experts who are able to identify and address issues related to a claim.

BY ROBERT PARKINSON, JAMIE CATANIA, RUSSELL BROWNLEE and EDWARD NAGEL

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BY TAMMIE K. ROSS

Departments 4 First Notice 40 On The Scene

Columns 38 Education Forum

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F first notice Insurer not liable for AB when claimant fails to attend examinations An insurer is not liable to pay for accident benefits when the accident victim has failed to attend insurer examinations without a reasonable explanation, a Financial Services Commission of Ontario (FSCO) arbitrator has decided.

Illiia Troubitsine alleges he was on a TTC bus on Nov. 10, 2006 when he claims the bus stopped suddenly and that he hit his face and head on the seat in front of him and sustained injuries to his back, neck, jaw, teeth and eyes.

TTC Insurance Company Limited advised Troubitsine that examinations had been set up to determine his entitlement to income replacement benefits, attendant care benefits, housekeeping and home maintenance benefits and medical and rehabilitation benefits.

He failed to attend any of the scheduled assessments or provide reasons as to why, FSCO wrote in its arbitration decision.

“As a result of Mr. Troubitsine’s failure to attend insurer examinations without a reasonable explanation, TTC is not liable to pay Mr. Troubitsine for income replacement benefits, attendant care benefits, housekeeping and home maintenance benefits and medical and rehabilitation benefits for the period from Feb. 27, 2007 to Nov. 10, 2008,” the arbitrator wrote.

“As a result of Mr. Troubitsine’s failure to attend scheduled examinations under oath without a reasonable explanation, TTC is entitled to rely upon section 33(2) of the Schedule and is not liable to pay benefits from Jan. 22, 2007 to June 15, 2007 and then ongoing from Nov. 1, 2007 until such time as Mr. Troubitsine complies with section 33(1.1).” ●

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Alberta rate board seeks permission to move to file-and-use system for setting auto insurance rates The Alberta Automobile Insurance Rate Board (AIRB), which regulates the province’s auto insurance rates, is seeking approval from the provincial government to introduce a new file-anduse system for determining auto insurance rates.

In a “pure” file-and-use system, insurers can file for changes in their auto insurance rates with the government and then use the filed rates pending formal government approval.

Aspects of this kind of filing system exist in jurisdictions across Canada, although the move to such a fileand-use system would represent quite a change in Alberta’s private auto insurance market.

“If approved by government, working on the implementation of a new regulatory model [would] move Alberta away from an annual industry-wide rate

adjustment process to a file and approve process, where the [AIRB would] review companies on an individual basis to determine if rate changes are appropriate and fair,” the AIRB says in its 2008 Annual Report.

If accepted, the AIRB goes on to note, “this model will change the way premiums are regulated from an annual, ‘one-size-fits-all,’ industry-wide adjustment to an individual company application process.”

The intended result, the AIRB notes, is “to reduce market uncertainty, provide quicker response times to rate applications and lower rates over the long term.”

The AIRB says it would retain its authority to accept or decline rate adjustments, but it would be able to respond on a timely basis to changes in market conditions. ●

Time to “reset” Ontario auto system The auto insurance reforms suggested by the Financial Services Commission of Ontario (FSCO) are essentially a wash, Barb Addie, a principal at Baron Actuaries, argued.

Addie’s article, Ontario Auto – Control-Alt-Delete?, is featured in the MSA/Baron Outlook Report: Q4-2008.

In it, she notes the overall Ontario auto direct loss ratio reached 84 per cent and its average expense ratio 25 per cent in 2008, leading to a combined ratio of 109 per cent.

Even if investment income had been healthy, “this still implies a return of equity of less than 1 per cent.”

Accident benefits calendar year loss ratio climbed to 124 per cent in 2008 from 2007’s 103 per cent, Addie noted. “The underlying trends are in the 12 per cent to 13 per cent range, so just keeping up with the costs will require substantial and sustained rate increases.”

Several sub-coverages — including housekeeping, examinations and caregiver disability income — have trends in excess of 20 per cent, she added, noting that the trend analysis was completed using data from before the economic meltdown.

Ontario’s system is simply too expensive,” she wrote. “Tweaking a few accident benefits rules and regulations will not bring the system under control. Increasing tort costs with such rich first party benefits makes no sense.

“We’ve tried controlling Ontario auto, we’ve also tried altering it to little avail, maybe it’s time to go ahead and delete it.”

“Perhaps the time has come to reset the system, move back to full tort with minimal accident benefits coverage. It seems very unlikely that the system would cost more, it would be less complex and there would be substantially less opportunity for fraud.” ●

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F first notice Independent adjusters should write two reports to ensure privilege Independent adjusters attending a claims scene should be writing up two reports instead of one larger report, thus increasing the chances of covering the report under litigation privilege, according to Richard Lindsay, partner with Lindsay Kenney LLP. The “dominant purpose” test is used to determine whether a documentation falls under litigation privilege, Lindsay told delegates at a Risk Management Counsel of Canada seminar in Toronto.

If the dominant purpose of the preparation of the document was for the anticipation of litigation then it will fall under litigation privilege. If, however, the document has multiple purposes, problems can arise as to whether it falls under privilege.

Independent adjuster reports tend to be the biggest problem, Lindsay notes.

In a loss, an adjuster will attend the scene with a multi-faceted task: determine quality, sort out coverage, make

recommendations with respect to reserves, check for potential subrogation and look at origin and cause.

Often one report is written to cover all of these points. But this can cause an issue during litigation, since parts of the report — such as coverage issues, for example — have nothing to do with litigation. This can make the document discoverable in court.

In order to avoid this, Lindsay recommends that adjusters write up two reports. One should deal with ordinary adjustment issues that are not in the least bit related to litigation, such as coverage. A separate report should be prepared to address liability and other potential litigation issues.

Handled in this manner, it can be put into an affidavit that the litigation was anticipated in preparation of the liability report, which deals strictly with a particular issue of liability, and which cannot be done if the report also contains references to coverage or quantum. ●

“No assurances” Ontario auto insurance reforms will help reduce frequency, claims costs: OSFI The financial woes of Canada’s private auto insurance system are squarely on the radar of Canada’s federal solvency regulator, the Office of the Superintendent of Financial Institutions (OSFI).

“On the auto side, many of you know that Ontario auto has been on our radar for awhile,” Penny Lee, OSFI managing director, said at the 2009 IBC Financial Affairs Symposium. “We actually [believe] the inherent risk for Ontario auto is above average.

“And there are no assurances that the impending regulatory reforms will be sufficient to help with claims activity or claims costs.”

The Financial Services Commission of Ontario (FSCO), has recently submitted

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to the province’s finance minister 39 recommendations for reforming the province’s auto product.

The industry is still trying to determine the impact of the recommendations, but many say the impact on auto insurers’ claims costs will be “a wash” at best.

Lee also noted uncertainty will prevail for some time as the auto industries in Alberta and in the Atlantic provinces await final outcomes on court challenges to caps on claims payments for minor auto injuries.

“Uncertainty will persist,” Lee said.

“And if caps are struck down, and if [the impact of such decisions on claims] are retroactive, this will be a big blow to the industry.” ●

HCAI on track for voluntary rollout The Health Claims for Auto Insurance (HCAI) is on track for a voluntary rollout at the end of summer, provided the testing phase meets required outcomes.

Currently, the system is in an extended test cycle which will continue until July. A quality assurance team, whose job is to review the functionality of the remediated system is conducting the testing.

Additionally, the software developer and an independent third party will be validating the number of users the system can support and how fast the system can perform.

Evidence from test activities will be reviewed by Insurance Bureau of Canada (IBC)’s IT oversight committee and shared with other governance bodies, including the Financial Services Commission of Ontario (FSCO).

Public testing will begin in August and will include clinical and administrative staff from health facilities as well as volunteers from the insurance industry.

This testing will provide additional evidence that will be used to decide whether to go forward with the current reintroduction schedule or to proceed with further remediation efforts, IBC notes.

After a voluntary period of six months, the performance of HCAI will be assessed and if the criteria have been met, FSCO will be asked to support reintroduction with a full adoption before the end of 2010. ●

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F first notice Ontario’s harmonization of sales tax with GST predicted to drive up insurers’ claims costs Ontario’s harmonization of the provincial sales tax with the GST will definitely drive up claims costs for property and casualty insurers, an audience attending the 2009 IBC Financial Affairs Symposium in Toronto heard.

“There is going to be a definite impact on costs [to property and casualty insurers] both on an operating level and, on a broader basis, claims,” said speaker Danny Cisterna, a partner at Deloitte & Touche LLP. “For sure, your claims costs are going to go up.”

Cisterna said his firm is currently crunching numbers to estimate the financial impact to insurers.

Although financial services will be exempt from the proposed new Ontario Harmonized Sales Tax (OHST), Ontario intends to maintain beyond June 2010 the 8 per cent Retail Sales Tax (RST) on group insurance and certain property and casualty insurance, Cisterna said.

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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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RST currently applies to many purchases businesses make in the course of providing goods and services for sale. It is embedded in the price of the goods and services throughout the supply chain and eventually passed on to consumers.

Cisterna said property and casualty insurers now incurring costs currently not subject to the RST but subject to the 5 per cent GST can expect to see increased fees for services as a result of the harmonized tax. For example, insurers might see increased bills for fees paid for legal, accounting and other professional services, as well as for real property contracts including leasing, towing and storage.

He predicted the effective use of “net of GST” claims settlements will become more valuable in the future.

One attendee asked if it wouldn’t be a good idea for insurers to try and leverage reduced rates from suppliers that are exempt from paying the OHST. ●

Claims Canada

June/July 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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MESSAGE

LA PLUME

From the President

Du Président RENO DAIGLE

I was forewarned the year would fly by, but I never expected just how quickly it truly would go.

Since my last President’s Message, I have done a considerable amount of travelling on behalf of CIAA and the membership.

I was pleased to attend a Pacific Region executive meeting, followed by the CIAA/CICMA annual joint luncheon and a seminar jointly sponsored by CIAA and the Insurance Institute of B.C. on Apr. 22. The seminar explored not only the mechanics of mediation, but also the pros and cons of mediation in different claim or business scenarios. Discussion included common sense ways to avoid, manage and transform conflict. Congratulations to Jim Eso, CIAA Pacific Region president, for his role in providing the B.C. insurance community with an excellent networking and educational opportunity.

Next stop was the Insurance Brokers Association of Alberta convention in Jasper, May 3 to 6. I was delighted to assist Bea Boutcher, CIAA Western Region president and Greg Merrithew, immediate past president of Western Region in manning the CIAA exhibit booth, which was very well received. CIAA Western Region is a proud supporter of this conference and I was honoured to be a part of it this year.

The National Association of Independent Insurance Adjusters (NAIIA) annual conference was held in Tucson, Ariz., May 11to 14, where we were warmly received. The CIAA booth at the trade show was well attended and many of our associate members advised they are receiving claim assignments from having their firm listing in the CIAA Claims Manual. We recruited a few new CIAA associate members and several others expressed an interest, which we continue to pursue.

Quite a few insurance company representatives were also in attendance and appreciate receiving copies of our Claims Manual as well. The conference agenda included interesting and topical education seminars and was an extremely well attended event. I was over-

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J’avais prévu que l’année passerait rapidement, mais n’avais jamais cru qu’elle le ferait aussi vite!

Depuis mon dernier message, j’ai beaucoup voyagé pour le compte de l’ACEI et de ses membres.

Le 22 avril, j’ai eu le plaisir de participer à la réunion de l’exécutif de la région du Pacifique, laquelle était suivie du déjeuner annuel conjoint de l’ACEI/ACDSA et d’un séminaire commandité conjointement par l’ACEI et l’Institut d’assurance de la CB. Ce séminaire traitait non seulement de l’aspect pratique de la médiation mais, également, des avantages et des inconvénients de la médiation selon divers scénarios sur les expertises et les affaires. La discussion a aussi porté sur les moyens pratiques à adopter pour éviter, gérer et transformer les conflits. Je félicite Jim Eso, président de l’ACEI de la région du Pacifique, dont l’influence a permis d’établir un excellent réseau de travail et de formation pour le secteur de l’assurance de la Colombie-Britannique.

Ensuite, du 3 au 6 mai, je me suis rendu à Jasper, assister à la conférence annuelle de l’Insurance Brokers Association of Alberta. J’ai été ravi d’aider Bea Boutcher, présidente de l’ACEI de la région de l’Ouest, et Greg Merrithew, président sortant de cette même région, à tenir le stand d’exposition de l’ACEI qui a eu beaucoup de succès. L’ACEI de la région de l’Ouest est fière d’accorder son soutien à cette conférence, et ce fut pour moi un honneur que d’y participer cette année.

La conférence annuelle de la National Association of Independent Insurance Adjusters of America (NAIIA) s’est tenue à Tucson, Ariz., du 11 au 14 mai.

Nous y avons été chaleureusement accueillis. À la foire commerciale, le stand de l’ACEI a reçu de nombreux visiteurs et nous avons appris que plusieurs de nos membres associés reçoivent des demandes d’expertise parce que le nom de leur firme figure dans notre Claims Manual. Nous avons recruté quelques nouveaux membres associés et ne manquerons pas de

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whelmed by the tremendous goodwill between our two associations, which we continue to foster.

I look forward to attending CIAA Ontario Region’s annual meeting, AESIQ’s golf tournament and the Atlantic joint conference and I hope to see many of you at our annual conference in Montreal in August.

The convention committee has done a superb job in putting together an excellent program sure to be enjoyed by all.

Until next time — have a safe and enjoyable summer! ■

communiquer avec les autres firmes qui s’intéressent à notre association. De nombreux représentants des compagnies d’assurance étaient également présents et, eux aussi, apprécient recevoir des exemplaires de notre Claims Manual. D’intéressants séminaires sur la formation axés sur l’actualité étaient au programme de la conférence et ont attiré beaucoup de participants. J’ai été enchanté de constater combien nos deux associations travaillaient bien ensemble. Nous nous efforcerons donc de favoriser encore davantage cette collaboration.

Je suis impatient d’assister à la réunion annuelle de l’ACEI de la région Ontarienne, au tournoi de golf de l’AESIQ, et à la conférence conjointe de l’Atlantique.

Par ailleurs, j’espère que vous serez nombreux à Montréal, où se tiendra, en août, notre conférence annuelle.

Grâce à l’excellent travail du comité des congrès, le programme prévu est fort intéressant et devrait plaire à tous les participants. À la prochaine! Entre-temps, passez un bel été! ■ 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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BUILDING ON THE BASICS

Increasing Adjuster Knowledge

BY LAURA KUPCIS

After FSCO’s release of the recommendations surrounding the five-year auto review and before the Minister of Finance releases his decision, industry representatives discuss the positives and pitfalls of recommendation number 35. While there might not be a clear opinion as to whether the recommendation is warranted, there is a definite consensus that further training is always beneficial.

This is especially important given the high turnover rate in accident benefits.

N

otwithstanding the fact that there is always room for improvement in any industry, there are mixed feelings as to whether or not adjusters are significantly trained and experienced to handle serious injury claims.

As part of the five-year auto review, the Financial Services Commission of Ontario (FSCO) released a report with 39 recommendations intended to improve the effectiveness and administration of Part VI of the Insurance Act and any regulations therein. These recommendations are, in part, a reflection on the comments received by FSCO during the stakeholder consultation process held in the latter part of 2008.

While all the recommendations will affect all facets of the industry as it relates to accident benefits and bodily injury, recommendation number 35 looks directly to insurance adjusters and their ability to manage claims involving serious injuries.

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“Insurance claims departments need to better focus on the needs of claimants with serious injuries,” the recommendation reads. “The IBC, Insurance Institute of Ontario and the Ontario Insurance Adjusters Association should work together to train adjusters on the needs of claimants with serious injuries to reduce exposure to potential allegations of unfair and deceptive acts or practices [UDAP].”

The report suggests that the potential lack of training and experience can lead to unnecessary assessments, high rates of benefit denials and delays in assessing benefits.

There is among many in the industry — whether they agree or disagree in whole or in part with the recommendation — a feeling that claimants have not been denied any treatment they required or were entitled to. There is, however, a common concern among many in the industry about the difficulty in keeping staff who are trained in accident benefits or recruiting new staff to the field. Accident benefits is one of the most demanding sectors in terms of people management, recruiting and developing, due to the increased stress and constant changes.

Training is always valuable But when it comes to further training and education, most agree this is an essential component of staying on top of their game.

Independent adjusters have the experience to handle someone who has been in a crisis, according to John Seyler, president of the Ontario region of the Canadian Independent Adjusters’ Association (CIAA). The nature of the independent adjuster business is such that they are on call 247 as insurance companies are relying on independents to handle client emergencies, he adds. “We absolutely have the skill set to deal with people in traumatic situations,” Seyler notes. “We are quite often the first point of contact; adjusters as a whole — and certainly independents in a significant amount — we are the first point of contact after (the claimant) deals with the emergency responders.”

That said, there is always the opportunity to learn how to deal with situations better, he adds.

Having something in place where adjusters could talk to each other and learn from each other to ensure that the

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best practices are in place is definitely an asset, Franca Reale, Ontario automobile manager, Cunningham Lindsey Canada, says.

“What we’re administering is a very complex piece of legislation in both the legal sense of the entitlement that are afforded to a person, the timelines to administer it and just the minutia, the detail, you need to do a transaction within the system,” David Owen, director of accident benefits for Ontario, Intact Insurance, says. “We’re talking about people who suffered the most serious injuries that we’ll administer and so you are dealing with the most complex medical cases, as well. So I think that everybody would recognize that there is a need for education.”

The legal and medical landscape change, which requires an adjuster to have an understanding and appreciation of where things have changed and how it impacts administration of a policy, Owen adds.

“I don’t think that there is a standardized training like there is in other lines of business,” Lisa Fazzari, claims technical advisor for accident benefits, The Economical Insurance Group, says.

“For that level of expertise (required) — when I think of CIP courses, accident benefits gets one chapter in auto — that’s ridiculous when you look at how complex the legislation is.”

She adds that having Institute courses specifically on accident benefits would be very beneficial given the complexity of accident benefits.

Laurie Walker, president of the OIAA, notes that while there is definitely training and education in the field and adjusters are well-versed in procedures, there is a lack of medical knowledge, such as terminology and rehabilitation. Adjusters do not always understand the full impact a serious injury has on a claimant’s life and the future care needs required and then subsequently interpreting the data into reserve, payments and consideration of treatment. She notes that back in the days of Bill 164, insurance companies would hire nurses and rehabilitation coordinators who would explain the treatment process surrounding an injury to adjusters. There is now not always an understanding in the type of treatment an injury should receive.

“An adjuster may lack medical knowledge and treatment knowledge of what is standard protocols,” Walker

says. “If they had that understanding, there may be a decrease in assessments or examinations that may occur, which is, I think, what the gist of the recommendation really is.”

Training specific to accident benefits would be to everybody’s benefit, Rocco Neglia, vice president of claims, The Economical Insurance Group, says.

“Nobody is ever going to argue against training, it’s like apple pie,” he says.

“From that standpoint we don’t want to take issue with FSCOs recommendation, we think training is imperative right across all levels of activity, right across the industry.”

It is essential that there be adequate numbers of properly trained adjusters in accident benefits, Steven Del Greco, branch manager of the Toronto West office, Crawford and Company (Canada), Inc., notes.

Available training And there is certainly a number of places an adjuster can look to expand their training base.

Within the CIP program through the Insurance Institute, students have access to course material that deals specifically with serious injuries resulting from an automobile accident — particularly courses within the claims professional series, Carey-Ann Oestreicher, vice president of business develop with the IIC, says. Additionally, the issue of serious injury under the accident benefits coverage in Ontario is addressed in an AB claims training program offered by the Insurance Institute of Ontario (IIO). The program is offered at two levels: one addresses the needs of the junior claims handler and the other focuses on issues that would be handled by more senior claims personnel, including serious injury. In addition to the CIP courses, information seminars and training is provided by the IIO, which is particularly appropriate when changes are made to regulations or claims-handling techniques, she adds.

Seneca College offers a rehabilitation benefits administration certificate in conjunction with the Institute and most companies encourage ongoing education and offer in-house training or support sending their staff to off-site training seminars.

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Educational seminars are frequently put on by the CIAA that discuss issues impacting adjusters, such as changes in legislation and handling of claims. The OIAA and the CICMA hold seminars geared towards those in the field, as well.

There remains, however, no formalized education in the province for accident benefits.

Increased costs But, this has not had an impact on claimants being denied care they are entitled to.

Mike Tolan, director of quality and professional standards, Crawford and Company (Canada), Inc., notes that when he attended the Auto Insurance Summit in early 2008, during the opening comments it was noted that the insurance industry does a good job with serious and catastrophic losses. The issue, for the plaintiff and defense lawyers and health care personnel in attendance, was with the minor whiplash associated disorder claims, he adds.

“I don’t know that there’s been serious repercussions because of (lack of training),” Del Greco says. “I don’t think claims are being denied that shouldn’t. I think there’s too many checks and balances in place.”

Either a senior adjuster, who has a smaller caseload, handles the serious injury claims, or they are sent to head office to an adjuster who specifically handles injuries over a certain dollar figure.

“It is our impression that, in general, the industry has an excellent reputation for its claims handling of serious injury cases,” Barbara Sulzenko-Laurie, vice president of policy with IBC, notes, adding that IBC has not been made aware of any systemic problems in claims handling for claimants with serious injuries.

There has been concern raised, however, in the high costs surrounding assessments.

There is a large cost in assessing whether a claimant is catastrophic or not, Fazzari says. Furthermore, while an insurance company is waiting on assessments to be completed to determine whether the claimant is catastrophic, there are still treatments submitted under the catastrophic realms and they cannot be denied or held until an original verdict is submitted, which 14

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means they must be moved on to an insurer examination (IE), Fazzari adds.

According to the IBC for every dollar of treatment, another 70 cents is spent on assessments. But, the legislation mandates that in accident benefits an insurance company must pay for treatment until medical evidence proves that is not required. In order to deny a claim, there must be an assessment done.

There is also concern around the strict timelines that must be adhered to in accident benefits.

“I think the constant changes in the legislation have almost tied our hands as adjusters and, I think, be it at an independent adjuster and at a company level, you’ve got these strict timeframes

A key component of the adjuster’s job is to understand the mechanism of the injury, how it affects function and to ensure the appropriate resources are being utilized in the most cost effective way. to deal with (and) sometimes you feel like you are just paper pushing, just because you have these stringent timeframes to deal with,” Reale says. “The timeframes are shorter and shorter.”

“Being able to keep on top of the very stringent timeframes that the legislation brings to us sometimes is very difficult to proactively handle your file,” she adds.

Need for adjusters To add insult to injury, there is an extremely high burn-out rate in accidents benefits.

“There is, without a doubt, a shortage of good accident benefits people and the industry tends to steal from each other,” Tolan notes. “I would certainly wholeheartedly support if the industry could get together and almost put together a standardized accident

benefits training program.”

Accident benefits is probably one of the most technical product to administer because it is extremely onerous, complicated and filled with tight timelines, Tolan adds.

It is a very high pressure job where the adjuster must make sure they are reserving properly, make sure that the adjuster is adjudicating and abiding by the regulations and all of this combined causes a high turnover.

Many insurance companies compensate for the high turnover by bringing in independent adjusters to handle the overflow of claims, Sharon Clark, Ontario chapter president, Canadian Insurance Claims Managers’ Association, says.

To help combat the burn out rates and bring in more adjusters to accident benefits, Reale brings in assistants who, under the direction of senior adjusters, respond to forms. By shadowing the more senior adjusters, and being immersed in the accident benefits field, these assistants are able to work their way up through the channels to senior adjuster. They now have hands-on training in the accident benefits field and are well-versed in accident benefits claims and legislation, Reale notes.

“The key is getting adjusters and keeping them in accident benefits,” Clark says.

Discussing regulation But does all this validate the implementation of a regulation? It appears there is no straightforward answer to the question, and there does not seem to be much consensus among parties, short of the benefits surrounding further training.

“FSCO’s recommendation number 35 is an extremely weak recommendation that we believe originates in a submission made by the Speech-Language Pathology Association,” Karin Ots, senior vice president, injury and casualty claims, Aviva Canada, says. “We disagree with the recommendation as no evidence has been presented to support it or indicate that claims handling is a problem. Most insurers do a very good job of claims handling but are severely curtailed by the system complexity and the burden of paperwork. In addition, the legislation/regulations are disputecentric, when they should be claimantcentric.”

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these recommendations are simply innuendoes or whether there is concrete evidence to show there is a problem. Clark echoes Neglia’s sentiments: Is there an issue and what is it specifically. “I don’t think they have given it a lot of thought,” Clark says.

FSCO has the ability, Neglia says, through its risk-based assessments to determine if there is a gap in the claims handling. “That’s the whole problem with this report,” he says. “It’s just a lot of mishmash and there’s nothing coherent about it, they just threw (recommendation number 35) in there for the hell of it. And there’s probably another 25 recommendations that are probably just as incoherent.”

“There is merit to (additional training), and it should just be left at that,” he adds. “Training is important and company’s should heighten their training, but the last thing we need is more regulations from FSCO around this or anything else.”

From Ots’ point of view there is no need to impose further regulations or accountability on insurers in this area.

“Rather, there is a need to impose more accountability on healthcare providers who bill millions of dollars to the system and are unable to demonstrate success in returning claimants to pre-accident status,” she states. “FSCO’s focus should be on healthcare providers and whether there should be criteria for those who treat seriously injured claimants.”

Tolan says he firmly believes in the recommendation that insurers and the insurance industry take an active approach in training as a general statement. “However, I disagree with the proposal that insurers aren’t doing a

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good job handling serious claims and therefore are exposing themselves to allegations under UDAP,” he adds.

There is a very attractive and expensive accident benefit coverage, a nofault coverage, which is supposed to have a non-adversarial spirit to it, Tolan says. There is a certain assumption that the insurance company should take everything submitted at face value and never question anything.

On the other side, is the insurance company’s responsibility to restrict indemnity to those things that are reasonable and necessary and to be financially responsible, he adds.

The recommendation should not be read as a stand-alone, but rather in context with all the recommendations. It is a layering of several recommendations to remove the complexity and the layering that prevents the ideal of getting to the customer as quickly as possible and resolving the claims as best as we can, Owen says.

For its part, the OIAA would be delighted if the regulation was mandated and became a piece of legislation, Walker says.

“I think it’s a fabulous idea,” she adds. “It’s the first time the OIAA has been able to kind of start to participate with a legislative body and have some weight to say here, because before, some adjusters would participate in educational seminars, some might not and this is a situation where we can really contribute to our profession.”

“It’s a long-term project if it comes to fruition, but it’s a worthwhile one,” Walker says. “I would like to at least implement some sort of program whether it can be considered an accredited program or something like that.”

Looking forward Whether or not the recommendation is ultimately mandated, the OIAA will continue to look at how to ensure adjusters are trained through such means as ongoing seminars, certification programs or education requirements, Tammie Norn, incoming secretary with the OIAA, notes, adding these are just preliminary ideas that have been tossed around.

“We do definitely believe that ongoing education is critical, especially for AB and BI adjusters, because you are dealing with injuries and you are dealing with limits and large amounts of money,” Norn, who is the president of ProFormance Adjusting Solutions, notes. “As an adjuster you need to be well-trained and well-versed about how to handle these funds.”

The CIAA is also committed to furthering adjuster training and education in the field of accidents benefits. While the recommendation notes that the OIAA should work in conjunction with the Insurance Institute and the IBC, the CIAA would like to be involved, as well.

“I think the OIAA is certainly wellsuited to do that type of training of adjusters,” Seyler notes. “However, I do think that CIAA has a role to play in it because clearly we focus on the interests and requirements of independent adjusters specifically. So we come at it from somewhat of a different perspective than a generic adjuster. I think we come at it form a more specialized approach and I think between the two organizations we can definitely put together some excellent training that would prepare adjusters to deal with that.”

Adjuster’s Role in Catastrophic Injury Handling

BY TAMMIE NORN

There are varying degrees of catastrophic injuries and because of this, each claim must be handled based on the uniqueness of the circumstances pertaining to the case.

The adjuster’s job starts immediately upon receipt of the claim. It is crucial to meet with the family immediately as they are undoubtedly going through an extremely difficult time and need reassurance that someone will be there to help guide them through the process. The adjuster must also consider the impact the injury will have on

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family members. Individual or group counselling is often required to educate the family about the physical injuries and behavioural effects as well as provide coping strategies and techniques on how to deal with the victim and their own emotions.

When faced with a clear catastrophic case, it is imperative a skilled case manager, who has expertise that aligns with the specific injuries being dealt with, be assigned to the file. Ideally the case manager is assigned while the individual is in the acute trauma

centre or rehabilitation facility, to monitor rehabilitation outcomes and coordinate discharge planning to ensure a seamless transition back into the individual’s home or new living environment.

A key component of the adjuster’s job is to understand the mechanism of the injury, how it affects function and to ensure the appropriate resources are being utilized in the most cost effective way. Catastrophically injured individuals have access to $1,000,000 in medical and rehabilitation

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benefits plus $1,000,000 in attendant care benefits. At face value, there appears to be a considerable amount of funds available to help treat these victims. In reality however, when you are dealing with significantly injured individuals who require home modifications, vehicle modifications, attendant care, treatment, medication, equipment and other services for the rest of their lives, you are left with a very aggressive burn rate.

Accessing publicly funded services and community resources such as ADP, CCAC and disability benefits through ODSP and CPP will supplement the funding available under the SABS. It is necessary for the adjuster to have a solid understanding of pre-accident function and how this relates to post accident rehabilitation. Once an adjuster identifies the individual’s future potential it is essential to understand from the treating health practitioners whether or not the individual will be physically or cognitively capable of attaining these goals.

Oftentimes in an effort to maintain a certain quality of life, a catastrophically injured person may be eager to partake in any type of employment. This sometimes poses a problem when dealing with severe brain injured victims. These individuals often have difficulty multi-tasking and tend to display inappropriate behaviour, which makes it difficult to integrate them back into a workplace. In an effort to facilitate rehabilitation, it may be prudent to invest in a job coach with specific expertise who will attend the work place with the individual, help them to stay on task or circumvent inappropriate behaviour. In other cases, volunteer work may be considered.

Many catastrophically injured individuals are not suited to return to the workforce at all. As an alternative measure, rehabilitation efforts should focus on activities the individual can participate in that will provide meaning and give some sort of structure and/or purpose to their lives.

Similar to any injury as recovery occurs and medical and rehabilitation needs need to evolve. By continually being involved with the medical and rehabilitation professionals, listening to the claimant and keeping abreast of their current stage of recovery, the adjuster will be well informed and fully equipped to adjudicate the claim effectively and ensure appropriate allocation of funds. It is important to understand that what may be good for the individual today will most certainly change tomorrow.

At some point, although not usually within the first two years, the claimant’s condition will stabilize and maximum

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medical improvement will be attained. At this time, it may be practical to consider resolution of the claim by way of structured settlement to ensure the claimant has access to funds for the duration of their life.

A future care cost analysis will need to be completed in order to understand what the claimant will require over the course of their life.

A settlement meeting usually takes place with all of the parties involved in the claim: insurer, adjuster, plaintiff counsel, claimant, and may include a public guardian or trustee, case manager and a

representative from the structured settlement company.

By effectively handling a catastrophic case, the adjuster can take pride knowing they have worked with the treating health care practitioners to ensure prudent allocation of funds, have lessened the burden on the family by providing superior claim service and support all while protecting the interests of the insurer by successfully managing their indemnity and expenses.

Tammie Norn is the president of ProFormance Adjusting.

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S spotlight The Independent of the North Arctic West Adjusters Ltd. handles all the challenges that comes with claims adjusting in the North

BY LAURA KUPCIS

overing a territory of three million square kilometers, the five adjusters working at Arctic West Adjusters Ltd. have an entirely different definition of ‘it’s just around the corner.’

Reporting to branch offices of insurance companies from British Columbia to Quebec, adjusters at Arctic West handle claims throughout the Northwest Territories, Yukon and Nunavut territories. It is an airplane ride to everywhere, as the only area, outside of Yellowknife where the office is located, that an adjuster would drive to is Behchoko, an aboriginal community about 110 kilometers down the road.

Even Hay River, where an adjuster would go weekly, is a 200-kilometer flight across Great Slave Lake.

A typical trip to an easy-to-reach location would include: On Monday, fly out of Yellowknife at 10 a.m., arrive in Iqaluit on Baffin Island at 4 p.m. — there are no direct flights, plus a two hour time difference. Tuesday through Thursday the adjuster would handle a few claims and then Friday is another travel day back to Yellowknife. A more remote location, such as Pond Inlet on the shores of north Baffin Island, would require two travel days each way, leaving usually only one day for investigation and assessment of losses.

“We are not talking about travelling into communities with services, we’re talking about travelling into communities with a population base of 900 to 1,500 people that has no other resources available,” Greg Merrithew, owner of Arctic West Adjusters, says.

“We don’t have disaster restoration technicians in these communities; there is no such thing in the North. So we will fly into a place where the con-

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tractor has never done a water escape claim before — and we only have the one contractor.”

Cost-effective adjusting Because there is no competitive contractor, the adjuster from Arctic West will assess the loss and determine the scope of work, before sitting down with the contractor to help him/her develop quotations on the repairs because it is such an unusual event for the contractor. “It’s either that, or we have to fly a (specialized) technician in from either Yellowknife or Edmonton or Ottawa,” Merrithew says. “It’s just not cost-effective.”

Other times, such as in an automobile claim, the insured will have to perform the repairs themselves because there isn’t a body shop in the area. If there are major repairs that need to be done to the body of a vehicle, parts are ordered in from outside, and an auto body specialist will do some of the work in their hometown before flying out to the community and shipping the parts to finish up the work there. Merrithew tells of a claim in Arviat, Nunavut where a water truck rolled over into the snow, damaging the cab. The only way to cost effectively repair the vehicle was to remove the entire cab and replace it.

He met with an auto body technician in Yellowknife, ordered a new cab from Louisville, Ky, had it shipped to Yellowknife where it was painted and put on a pallet and filled with all the extra parts the technician would need to install it to the truck, before it was shrink-wrapped and loaded on a plane and flown, along with the technician, to Rankin Inlet. From there, it was loaded onto a sled, hauled by a Bombardier snowmobile for 170 kilometers down the Hudson Bay to a local garage in

Arviat. A frame was built in the local garage to lift the damaged cab off the water truck and replace it with the new cab.

This is standard fare in the North, where everything must be flown in or hauled along the sea ice. Some communities only have sea access once a year by sea lift, which comes in September, and if the items required are not on that year’s ship — which is often filled six to eight months before it leaves the port in Montreal — then it’s another year until a house can be rebuilt or a vital piece of equipment replaced. Adjusters at Arctic West quickly learn who to call about freeing up some space on the ship to ensure that someone’s house can be rebuilt or a new fire truck can be shipped to a remote community.

Alternative thinking Developing relationships is a huge aspect of working in the North, Merrithew says.

Another large challenge is trying to control the costs on behalf of the client, he adds. Adjusters at Arctic West take the time to determine what the most cost-effective way to handle a claim is, while also having to keep in mind that a community cannot be without a fire truck for nine months or a hospital for even a few weeks and a family cannot bunk up with another family for six months because there is no other housing available and their home was lost in a fire. Due to the varying differences in community structure and access, every preliminary report created by Arctic West includes data on the community, a map of the community in relation to the entire territory, infrastructure available in the community, road access availability and contractor availability, so that the insurance company is able www.claimscanada.ca

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to foresee what type of situation the adjuster is faced with and the reason for the increased cost. Merrithew sites an example of a loss at a hospital in Cambridge Bay, Nunavut, which cost roughly $1.6 million. In Edmonton that same claim would have run only $400,000. The majority of the increased cost is related to labour and expediting in the North, he notes.

All lines adjusting But it is not only geography that makes Arctic West stand apart from other firms, it’s the fact that all adjusters at the company must be great general adjusters in all lines — there are no specialties in the North. “Insurance companies can’t handle claims here like they would typically handle in the South,” Merrithew notes. “As a result of that, we get a variety of work, everything from auto to liability to property to municipal liability to government liability. We just hit everything up here and you’ll find typically in the South that there are firms that specialize in certain areas . . . up here we don’t have that luxury because we have a limited population spread over a large vast geographical area.”

Continuing education And not only are adjusters wellversed in all lines at Arctic West, but they have also learned how to turn around a claim quite quickly. With increases in technology, such as sendwww.claimscanada.ca

ing files as PDFs via email rather than relying on regular post or telex machines, client expectations for a quicker turn-around time have also increased, notes Merrithew. To mitigate any errors that may occur as a result of the increased time pressures, Merrithew has implemented measures such as file audits and an increased focus on continuing education. “We put on continuing education courses here with my staff internally,” he notes.

“I, as well, send my staff out at significant expense (to learn more) . . . we continue on the education, we do continue the file audits. And there is a cost that we have to bear as a result of that, but the only way you can [ensure service is top-notch] is by literally gritting your teeth, paying the bucks and making sure everybody’s on board with the educational process.”

Staff retention Providing continuous education and training for his staff is not only beneficial to the client, but to the adjuster and Arctic West as well. “The only asset of any value that I have as a business owner is my staff,” he said.

“And if I don’t continually have my staff engaged both in education and in learning everything they can both in their fields and in the fields that we get in, you are going to lose them.”

Merrithew, who has been an owner of the company along with his wife Liz

Wyman since 1988, admits it has taken a while to learn what it takes to keep people on staff up in the North. He realizes now that the key is ensuring the quality of the relationship between the employer and the employee. It is a challenging lifestyle to live and work in the North, Merrithew says. Many people come up to live for the experience before quickly moving South again. By offering more educational opportunities, and more flexibility in work-life balance, Merrithew has been able to retain staff for longer periods of time.

“I’ve been doing it for 29 years,” he chuckles. “They follow the lead of the old dog.” But whether any of the staff will take the reigns of the company after Merrithew is still up in the air. He notes that in four to five years he will have to come up with an exit strategy, but at this time there is no set plan and the door is open for any staff to step forward or for someone else to take over the reigns down the road.

In the meantime, the small adjusting firm is focused on top-notch claims service and fostering the independent spirit. The ability to continuously improve is aided by the company’s membership within the Canadian Independent Adjusters’ Association (CIAA). “We all have common challenges and there are solutions out there,” he says. “We get to trade off on these solutions when we meet as an organization and that, for me personally, is a huge benefit.”

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Caci v. MacArthur A Guilty Verdict Determines Civil Negligence

BY LAUREN BLOOM AND BRENDAN LANIGAN

n late April the Supreme Court refused Both the trial and appeal level decisions in leave to appeal the Ontario Court of Caci heavily rely on the Supreme Court of Appeal case of Caci v. MacArthur.1 This Canada case of Toronto (City) v. C.U.P.E. case will therefore remain a major factor Local 794, which takes circumstances like these in determining the relationship between into account and provides at least some room Ontario’s Criminal and Civil justice systems. for civil litigants to manoeuvre after a crimiIt is important, however, that the rule in Caci nal conviction. The reasons in C.U.P.E. flesh is not taken too far. out which prior judicial findings will bind Jerry Caci sustained injuries as a passenger future civil proceedings and why. in a motor vehicle accident and sued the two In C.U.P.E., the Supreme Court of Canada Lauren Bloom drivers involved in the accident, MacArthur was concerned that being able to re-litigate a and Dorkin. By the time Caci’s civil lawsuit matter in a separate proceeding would be an reached the courts, MacArthur had been charged, tried, and “abuse of process” because it would bring the administration convicted of dangerous driving causing bodily harm. In of justice into disrepute. In other words, people would have a Caci’s civil trial, the judge reasoned that MacArthur’s crimi- hard time trusting a system that potentially delivered inconnal conviction was conclusive of his civil negligence and no sistent results on the same facts. Not only that, but such a further evidence could be heard on the issue.2 The Ontario system would waste judicial resources and produce more Court of Appeal upheld this trial court decision citing a doc- uncertain, less authoritative results.5 trine called “abuse of process.” The Court went on to state The Supreme Court in C.U.P.E. did carve out exceptions the limits of this doctrine were reached when it came to hear- to the general rule where re-litigation should be allowed, ing evidence about Dorkin’s contributory negligence that was which are: When the first proceeding is tainted by fraud or not in issue at MacArthur’s criminal hearing. The trial judge dishonesty; when fresh new evidence, previously unavailable, had correctly allowed evidence regarding the potential con- conclusively impeaches the original result; or when fairness dictates the original result should not be binding.6 tributory negligence of Dorkin to be heard.3 Despite the ability to adduce evidence regarding contribuThe Supreme Court in C.U.P.E. states: tory negligence, the holding that criminal guilt determines …if, for instance, the stakes in the original proceeding were civil negligence frustrates defence lawyers and insurance too minor to generate a full and robust response, while the subcompanies because it removes their ability to investigate, sequent stakes were considerable, fairness would dictate that the negotiate and litigate the nuances of negligence in light of administration of justice would be better served by permitting what can appear to be a blunt criminal finding of guilt. Even the second proceeding to go forward than by insisting that finalon the same facts, the finding of criminal guilt beyond a rea- ity should prevail. An inadequate incentive to defend, the dissonable doubt is a substantially different exercise than the covery of new evidence in appropriate circumstances or a taintapportionment of responsibility among multiple potentially ed original process may all overcome the interest in maintaining negligent parties. To civil litigants this ruling can look like the finality of the original decision.7 The finding in Caci is therefore not a shocking new stateLady Justice is being forced to use a sword when she should ment of law, but is instead the application of the rule in be using a scalpel.

Insurance companies often go to great expense to defend C.U.P.E. to a particular fact situation. People in car accidents their insured in a civil action. Insurers now have the ability to are often not charged criminally, but are instead charged with obtain downloads of “black boxes” on some vehicles and offences under the Highway Traffic Act.8 These proceedings have the financial ability to obtain accident reconstruction often result in significantly lower penalties than criminal proreports prepared by engineers. These are tools that may not ceedings. Are Highway Traffic Act offences treated the same as be used at a criminal or quasi-criminal hearing where the criminal offences? Also, when a person pleads guilty (someindividual defendant may not have the financial means to times to a lesser charge) instead of going to trial, is that guilty launch a complete investigation into his or her own defence. plea determinative of negligence in subsequent civil actions?

The impact guilty pleas and quasi-criminal Highway TrafAlternatively, the accused may not have the drive to complete an in-depth investigation in light of the punishment fic Act offences have on civil actions was considered by the faced, which may only carry a fine that would pale in com- Ontario Court of Appeal in a decision released on Feb. 6, 2009, Becamon v. Wawanesa Mutual Insurance Company.9 parison to the cost of a complete engineering assessment.

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The Court of Appeal held that evidence of a prior conviction is only prima facie proof of guilt in subsequent civil proceedings.10 This presumption is rebuttable in a subsequent civil action where re-litigation would not constitute an abuse of process. The Becamon case applied the third exception in C.U.P.E. in that it was held that re-litigation in a civil action after a guilty plea to a Highway Traffic Act offence (where the punishment was only a minor fine and thus the stakes were not very high) would promote fairness and would not constitute an abuse of process. Fairness dictated that the original result (the guilty plea) should not be binding,11 and evidence was allowed regarding negligence in the civil action.

This result clarifies that both guilty pleas and quasi-criminal proceedings attract the general rule against re-litigation under the abuse of process doctrine. However, the exceptions to the rule, as noted in C.U.P.E., can be applied to relieve civil litigants from this harsh reality. Unfortunately, there is no clear line for when exactly the exception will apply. Not all guilty pleas or Highway Traffic Act convictions will necessarily attract the exception, but many will. This uncertainty should lead to some concerns for insurers.

One concern is insurers will hesitate to fund costly investigations once criminal or quasi-criminal convictions have been rendered. It will now be prudent for insurers to obtain the transcripts from the criminal or quasi-criminal hearing to determine if there is any cause to investigate liability in the civil action. It may even be worthwhile for insurers to commence investigation at the time of the criminal hearing if they know that a civil action is forthcoming. The results of the

investigation could then be put forward at the criminal trial knowing it could have an impact on the civil action years later. One barrier to this is insurers don’t often know civil actions are forthcoming until litigation is commenced (or notice is given of pending litigation), which could be years after the conviction.

Insurers should know the Caci decision must be read in conjunction with the C.U.P.E. ruling where the Supreme Court of Canada provided exceptions to the general rule against re-litigation. Application of the C.U.P.E. exceptions will ensure civil negligence can still be an issue that may be litigated even in the face of a prior conviction.

Lauren Bloom is an associate with Blouin, Dunn LLP. Her practice involves all forms of insurance defence personal injury litigation.

Brendan Lanigan is an articling student at Blouin, Dunn LLP and is fascinated by evolving issues in insurance defence.

1 [2008] O.J. No. 4436 (On. C.A.)[Caci] 2 Caci v. MacArthur, 2007 CanLII 690 (ON S.C.) 3 Caci, ¶17.

4 [2003] 3 S.C.R. 77 5 CUPE, ¶51.

6 CUPE, ¶52.

7 CUPE, ¶53.

8 R.S.O. 1990, C. H.8 9 2009 ONCA 113 10 Re: Del Core and Ontario College of Pharmacists (1985), 51 O.R. (2d) 1 11 CUPE, ¶52.

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RIMS 2009 Annual Conference & Exhibition

Managing Catastrophe Claims The role of a loss adjuster when managing large loss claims

BY LAURA KUPCIS

aving recovery teams in place in the event of a disaster is an essential part of a disaster recovery plan for a global organization. A key component of that recovery team is an adjuster.

The role of a loss adjuster in the management of catastrophe claims is paramount. “As adjusters we have various different tasks,” Alan Buchfuhrer, executive vice president of Cunningham Lindsey International, told delegates during a Risk and Insurance Management Society, Inc. (RIMS) 2009 annual conference and exhibition seminar in Orlando, FL. “Obviously the most important is the investigation of the loss and the circumstances.”

This information is then presented to the underwriters so they can fully understand the loss, he added. Furthermore, adjusters provide advice regarding the loss and whether it is covered under the terms and conditions of the policy. Experts are brought in by the adjuster, if required, to assist in the mitigation of the loss and the loss is quantified by the adjuster, or with the assistance of an independent accountant, in the event of a large loss, to help schedule the different areas of the loss. The claim is adjusted through selective terms and conditions of the policy, the limits of the policy and the deductible.

But the job of an adjuster does not end there. An adjuster goes on to the settlement of the claim, Buchfuhrer noted. “Our job is basically to bring the

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two sides together: the insured and the insurers. Each individual party should leave the table at the end of the day knowing that the loss was settled fairly.”

sions, conditions and limits, to ensure that there are no issues down the road.

This is especially important if there are (re)insurers involved in a large loss, he noted.

Investigation into cause

Mitigation and loss control When it comes to mitigating loss control, an adjuster must determine if there’s property damage involved and if so, is it damaged beyond repair. Is the structure a total loss? Does it exceed the value of repairing? Can it be repaired? Can it be used for salvage to minimize the loss?

When investigating into the cause and origin of a loss, an adjuster must identify the damage, determine what peril has acted, identify whether the loss is within the operative clause, and identify the proximate cause to ensure that it is a covered peril. If there is any question as to the cause, experts, such as forensic cause and origin experts, can be brought in to assist on determining a cause, Buchfuhrer said.

An adjuster can also help determine whether the loss was caused by negligence on the part of a third party and potentially help with recovery of the loss, he added.

Circumstances An adjuster must ensure that the underwriters, who are ultimately going to be writing the cheque, understand the loss. Additionally, they should ensure that all the terms and conditions and warranties of the policy are complied with. Finally have all the policy conditions been observed? By determining these, an adjuster can help to ensure that there are no coverage conditions when negotiations begin.

Application of the policy With application of policy, an adjuster must determine cause, exclu-

Quantification of the claim When quantifying a claim, a team of observers, quantity surveyors or accountants might be required to quantify the claim and reach the bottom line. Additionally, market research might be required, he added.

When it comes to a catastrophe, often more manpower is required and therefore adjusters need to be brought in from elsewhere to help.

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G I F F I N KO E R T H

Policy coverage The adjustment reflects the coverage of a policy and an adjuster needs to take into consideration any indemnity, betterment, deductibles and average. All this gets put into the bottom line, he said.

Recovery Last but not least is the recovery.

Recovery is very dependent on quality of evidence and might require the assistance of lawyers. “If we can affect the recovery, that assists the underwriters and the insured, because it may well reduce the actual payment that was made and therefore when renewal comes, the rates will reflect the recovery,” he pointed out.

ANNOUNCEMENT

Don’t be at a loss, when a loss occurs Delivering value is more than crunching numbers. To help you benefit most when calculating losses, Michael and the quantification team developed a unique 4-Phase Approach. It focuses on: • Reducing adjuster workload • Delivering greater adjuster control via process transparency • Increasing communication among all parties • Providing clear, concise fact-based reporting • Reducing file turnover time • Cutting the insurer’s quantification costs

Giffin Koerth is pleased to announce that Michael Sigsworth and Blair Radbourne have joined our Forensic Accounting Group.

Insurance Claims Quantification Team

Basic Objectives There are basic objectives an adjuster tries to achieve in a disaster situation, including: • quick settlements • accurate settlements • covered by the policy • consistent and fair throughout • good communication with the insured and the underwriter so there are no hiccups at the end • always work in a professional manner When is comes to disaster response, adjusters are trained and have available resources throughout the world.

Experts and other adjusters can be brought from around the globe to one specific disaster area as soon as it is feasible and allowed, Buchfuhrer said.

“Anything and everything we can do to bring the insured as quickly as possible back to their pre-loss condition, working with them within the parameters that they dictate, [we do],” he noted. www.claimscanada.ca

Edward Nagel

Michael Sigsworth

Richard Stahl

CA·IFA, CBV Principal, Forensic Accounting Group

CGA, CIP Claims Quantification

B.Ap.Sc., Ph.D., M.Sc., P.Eng. Claims Quantification

John Young

Blair Radbourne

Kim Manchester

Computer Forensics

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Other Key Professionals

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Career Connections Connecting those looking for career direction and the P&C insurance industry

BY PETER HOHMAN

he findings of the Insurance Institute’s A Demographic Analysis of the P&C Insurance Industry in Canada 2007 – 2017 justify and predict that recruitment into the industry will be challenging for years to come if current hiring levels continue. The research findings point to a real gap between the industry’s current recruitment levels and the forecasted numbers of potential retirees in the next five to 10 years.

The industry’s senior human resource professionals (and hiring managers), as well as the industry associations, are beginning to recognize that an important step is to generate greater awareness of career opportunities within the insurance industry.

T

Designed to build awareness Since 2003, the Career Connections program has been building momentum and is succeeding in its outreach campaigns to secondary and post-secondary school students and graduates.

The program, hosted by the Insurance Institute on behalf of, and financially supported by, industry employers, is well-positioned to address the current and future challenges facing the industry.

The mission is to improve the understanding of insurance, illustrate its role in society and encourage young adults and career seekers to pursue one of the many skilled professions available in the insurance industry.

This is done by: • Promoting all careers and all sectors within the industry — Career videos, profiles and a comprehensive web site promoting a career as a broker, underwriter, adjuster, risk manager, 24

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Peter Hohman

actuary, marketer, loss control specialist, and more.

• Promoting the value proposition of a career in insurance — emphasizing the variety of roles in all sectors of the industry, emphasizing the stability of the industry, possibilities for advancement, reach of insurance into all sectors, and the challenging and rewarding positions available.

• Promoting insurance education and career awareness to many audiences, by generating: 1. greater presence for insurance on post-secondary campuses across the country; 2. greater promotion of the full-time insurance programs to encourage secondary school graduates to choose to study insurance; 3. more opportunities for students and graduates to connect with the industry through co-op programs, industry information sessions, workplace tours, etc.; 4. more awareness among junior high and high school students of the career possibilities within insurance; 5. greater understanding about how insurance works at the secondary and post-secondary levels through the

development and promotion of lesson plans and student activities so that tomorrow’s consumers will know more about insurance; 6. more tools, lesson plans, and resources for teachers to teach basic insurance concepts like risk, responsibility and ethics, as well as how home, auto and business insurance works; and 7. greater awareness of the Career Connections program and its outreach within the industry to generate understanding and promotional support, participation by companies in career events, involvement of industry professionals in the ambassador program, and more.

During the 2008/09 school year, Career Connections was present at 64 events on 32 university and college campuses across the country. We participate in career fairs, sponsor events, give presentations including a number of ‘lunch and learn’ presentations, and host insurance-specific career fairs. Our initiatives this year promoted careers in insurance to more than 50,000 postsecondary school students.

Career Connections is also instrumental in helping full-time insurance students in the college programs to connect with the industry. This year, we were pleased to help facilitate a job shadowing opportunity, C S I (Career – Students – Insurance), for Mohawk College’s Business-Insurance program.

Local insurance stakeholders invited students for a workplace tour and job shadow opportunity. Students gained practical experience, industry insights, and a better understanding of their future role in the property and casualty insurance industry. www.claimscanada.ca

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This past school year, 11,000 students in 87 high schools have learned about the insurance industry through 306 classroom career presentations given by ambassadors and the Career Connections team. Industry professionals, acting as ambassadors, have also had the opportunity to promote careers in insurance at career fairs hosted by schools, school boards and communities. Total attendance gave us a potential audience of 90,000 students.

In addition, ambassadors have given presentations to driver training classes, providing an opportunity to explain auto insurance to young drivers as they are getting ready for the road.

Going Forward Looking forward, the Career Connections program is developing new career promotional materials and expanding our target audiences.

The Career Connections program is succeeding in its outreach to secondary and post-secondary school students and graduates, and will soon include those changing careers and new Canadians as audiences for our outreach efforts.

Based on the research that we have conducted, we know that the right mes-

sage can impact perceptions and attitudes. We are confident that the Career Connections message is resonating with the next generation of insurance consumers and industry employees.

For more information on the program or how to get involved, please visit www.career-connections.info.

Peter G. Hohman, MBA, FCIP, ICD.D, is the president & CEO of The Insurance Institute of Canada (IIC).

Making the Connection The program receives evaluations and feedback from the students, who share their thoughts on what they learned. Ambassador presentations are always rated very highly. Students indicate their surprise at the opportunities available to them within the industry, and teachers are pleased at how interactive the presentations are and how engaged their students become. Opportunities to ‘put a face to the industry’ and dispel some of the myths about insurance, are necessary to generate greater awareness about the possible careers in the industry.

In one case, after seeing an ambassador presentation, a high school student approached his cooperative education teacher asking if he would be able to work in the insurance industry for his placement. The co-op teacher contacted us, and we were able to connect the student with an insurance company in the area.

Feed the Minds of Youth Each year, we partner with Take Our Kids to Work day and provide Feed the Minds of Youth events in many locations across Canada. Students have the opportunity to learn about insurance industry roles through presentations by guest speakers and participating in games and activities. The Feed the Minds of Youth program continues to grow with more than 400 participants taking part this year. www.claimscanada.ca

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OIAA 2009 Professional Development & Claims Conference

Addressing Different Viewpoints Working together to identify all aspects of a complex claim

BY ROBERT PARKINSON, JAMIE CATANIA, RUSSELL BROWNLEE, EDWARD NAGEL

s any professional can attest, it is a full-time job to be on top of the changes in your area of specialization, particularly with recent advancements in research and technology. Insurers are feeling the effects of these changes as the claims they see continue to grow in complexity. It is becoming even more necessary for insurers to seek experts capable of identifying and addressing issues related to a claim.

A

Case study An elderly female driver left the roadway while negotiating a curve on a winter day, striking a utility pole in the center median. The roadway ran through a new suburban area which had recently been constructed. As a result of the impact, the driver sustained a fractured left Robert Parkinson thigh, and died from her injuries. It was later discovered she may have been the sole caregiver to her disabled adult son. Her insurer, who believed that she was not at fault, pursued the Municipality for not adequately maintaining the roadway, claiming their negligence led to this incident.

The statement of defence from Russell Brownlee the Municipality claimed the roadway was adequately maintained, the driver had been driving too fast for the conditions, and the lack of seatbelt use by the driver had contributed to the fatal outcome.

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trades” approach is quickly disappearing from the field of forensics as insurers, lawyers and judges realize it is not possible for one person to maintain the necessary depth of expertise in all areas. An additional risk is the individual hired does not properly identify all the issues worthy of investigation, because their expertise is focused in one area, or the firm does not have a multi-disciplinary approach.

Indeed, the successful completion of this investigation required experts in the fields of road safety, accident reconstruction, biomechanics and accounting. Each expert was devoted to their respective area of specialization, allowing for a proper and comprehensive assessment of all pertinent aspects of the incident.

Jamie Catania

Expert qualifications

A reputable road safety expert will have a full complement of experience in transportation planning, traffic engineering, road user safety, road design, traffic control devices, traffic signal operations and road maintenance. While the majority of forensic engineering experts have the ability to determine “nominal safety,” Edward Nagel which is a measure of a roadway’s compliance with prevailing design standards, guidelines and jurisdiction-specific policies and procedures, there are two important drawbacks of focusing solely on nominal safety. First, designing to a guideline or meeting an operational procedure does not guarantee a safe roadway. There is no such thing as a ‘safe’ roadway! There is www.claimscanada.ca

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an inherent degree of risk in the design and operation of all roadway facilities. Properly applied standards will assist in reducing the risk, but engineering judgment is frequently drawn upon to venture outside the ‘minimum typicals’ of our documented practices. Second, not meeting the standards does not necessarily mean you can add a third party road authority to your claim. Road users do not read the standards. It is necessary for a road safety expert to identify whether a given deficiency actually played a role in contributing to the collision in question. The skills to measure the relative safety performance of all components of the roadway, along with a firm understanding of human factors and driver expectations is also required.

Historically, an accident reconstruction expert possessed training in mechanical engineering and physics. However, rapid changes in technology have demanded they constantly continue their education.

Specifically, computer programs used to analyze vehicle behaviour are becoming increasingly sophisticated, making them more powerful, but also easier to abuse. This can lead to inaccurate opinions being provided by poorly trained experts. Similarly, while ‘black box’ technology is becoming more complex and detailed, the collection, interpretation, and nature of the data is not currently standardized across vehicles or their manufacturers.

Specialized training is needed to be able to download data from each currently-accessible vehicle, ensure that the integrity of the data is not jeopardized, and also to interpret the myriad of different formats and data types that exist.

This training is going to become increasingly important in the coming years as ‘black box’ data becomes more and more prevalent. Indeed, government lawmakers have already rewritten vehicle safety standards that will soon require manufacturers to equip their vehicles with black boxes that collect accurate and reliable data, and to make that data publicly available. It is clear that in the next few years, the field of accident reconstruction will begin to change dramatically as more and more vehicles come equipped with readily accessible information about driver behaviour in the moments before a collision.

To possess the qualifications to comment on injury, a biomechanical expert should have an understanding of the relationship between the amount of force a tissue is exposed to and the ability of that tissue to tolerate such forces. Such an www.claimscanada.ca

understanding is brought about through training in anatomy, physiology, mechanics, physics, and biomechanics, which allows the biomechanical expert to understand the various factors that can alter the likelihood of injury, including such things as age, disease, loading pattern and fatigue.

This specific training is being recognized in the courts as being distinct from the mechanical training received by an accident reconstruction engineer and the medical training possessed by physicians. In contrast to medical doctors who are trained to diagnose and treat injury, biomechanical experts have practical knowledge of how injuries occur, obtained through mechanical testing of various tissues, such as bones and ligaments, in a research setting.

A qualified forensic accountant specializing in insurance claims quantification will have extensive experience reviewing financial records, and have a thorough knowledge and understanding of the Insurance Act, Statutory Accidents Benefits Schedule (SABS), arbitration decisions impacting the industry, as well as a working knowledge of quantification methodology. In addition to practical experience, many forensic accountants working in the insurance industry will have attained specialist professional designations including: CA•IFA (chartered accountant recognized as a specialist in investigative and forensic accounting), CBV (chartered business valuator), CFE (certified fraud examiner) and CIP (chartered insurance professional).

Case study resolution With regard to the collision described, the road safety expert conducted an extensive review of the weather forecasts and reports, as well as the winter maintenance records relevant to the time of the collision. It was determined that the Municipality had acted appropriately and met the minimum standard in maintaining the roadway on the incident date. However, past collision history revealed this particular location had several collisions involving cars that had left the roadway and struck poles in the median island. The expert was able to determine the Municipality did not provide an adequate safe travel distance for errant vehicles between the roadway and the poles (referred to as the ‘clear zone’), and that this contributed to an increase in collision potential and severity.

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OIAA 2009 Professional Development & Claims Conference to download five seconds of pre-crash data. Examination of healthy young female. This increased fragility also made it the data revealed that as the driver had entered the curve, less likely that in her condition she was able to act as the they were driving 10 km/h slower than the posted speed primary caregiver to her disabled adult son. Finally, given limit, likely a reflection of the snowy conditions. Further- that the pole contacted the side of the vehicle and resulted in a significant amount of vehicle more, analysis of braking behaviour intrusion, it was determined that the indicated the driver had responded to Similarly, while ‘black use of a seatbelt would not have the vehicle’s loss of control within a reduced the amount of force experireasonable amount of time, providbox’ technology is enced by the driver’s thigh and thereing evidence that the operator was becoming more fore would not have been effective in attentive. There was no indication the vehicle was being operated at an complex and detailed, mitigating this injury.

Given that the biomechanical excessive speed or in an inapproprithe collection, expert determined the driver would ate manner. not likely be able to care for an adult, The biomechanical expert, upon interpretation, and a forensic accounting review was warreviewing the accident reconstruction nature of the data is ranted to determine dependency of and medical history of the driver, was able to comment on three aspects of the son. A review of the financial not currently the driver’s injuries relevant to this records revealed payments made by standardized across claim. First, a review of the medical the driver to a third party service records revealed this elderly female provider for caregiving. However, in vehicles or their suffered from osteoporosis, a condilight of the driver’s death, a dependenmanufacturers. cy calculation was performed, contion where the bones lose mineral firming the son was in fact financially content, and subsequently strength. dependent on the driver. As such, and This made the driver more susceptible to fractures. As a result, the impact created a fracture to in accordance with the SABS, it was determined that the the bone of her thigh with the destruction of the blood ves- son was eligible for the death benefit, as a dependent to sels in the region, which may not have been observed in a the estate.

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Identify whether a given deficiency actually played a role in contributing to the collision in question.

Summary Given the rapid development of forensics, each area of expertise now requires full-time dedication — it is becoming clear that a single individual cannot possibly maintain a competency in multiple areas.

It is important for insurers to have the right firm and proper expertise supporting them while managing a file, so that important decisions to be made with confidence. In cases where a file manager is not sure of their expert’s qualifications, they should never hesitate to ask for a CV. If the file manager is not convinced, then it is unlikely the other side will be convinced, let alone the judge or jury.

Robert Parkinson, PhD, is a forensic biomechanist at Giffin Koerth, specializing in injury analysis.

Jamie Catania, M.Eng., P.Eng. is a senior forensic engineer and leads the accident reconstruction group at Giffin Koerth.

Russell Brownlee, B.Sc., M.A.Sc., FITE, P.Eng., is the head of the road assessment team and is a transportation safety engineer at Giffin Koerth Forensic Engineering and Science.

Edward Nagel, CA•IFA, CBV heads up Giffin Koerth’s forensic accounting group, which specializes in claims quantification, forensic investigations and computer forensics.

When you’re not FirstOnSite, who is?

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Take your

life to a

10

BY TAMMIE K. ROSS

ometimes, we are so busy we forget that Let’s start with this tricky one: money. we need to take care of our best asset — This area is causing a lot of concern right now ourselves! for many people considering our economic What does this translate into? Stress! downturn. I can say in all of the clients I have Stress can creep up on us so quickly. Before coached, there has only been one woman you know it, you’re wondering why your who has indicated she was happy with the chest is hurting and your hair is falling out. amount of money she had. Although this was Of course, stress looks different to each indiquite inspiring, for the rest of my clients, vidual. Some may find their workload is too money causes a lot of stress. much, or they have too many hats to wear, or Let’s peel back this onion a bit further.

Tammie K. Ross a personal relationship is causing them sadWhat amount of money would it take to ness. Although we would like to think we can keep our make you happy? Go ahead and put a dollar figure to it. business and personal lives separate, this is never the case.

Now ask yourself, “What’s holding me back from getting How does stress affect your life? Take this little test: this amount of money?” What came up for you? Not On a scale of 1 (low) to 10 (highest), indicate how satis- enough time, not enough education, too many family fied you are today with each of the following eight areas of obligations? How about fear? your life: Fear can run our lives.

Some common fears that have to do with the accumula1) Career tion of money include fear of failure, fear of rejection, and 2) Money fear of success. Yes, believe it or not, you might actually be 3) Health sabotaging your career because you don’t really believe you 4) Friends and family deserve to be wealthy.

5) Fun and recreation How do you know if you are one of those people who 6) Significant other/romance fears success? Your inner dialogue will look like this: 7) Personal growth and spirituality 1. Money is evil 8) Physical environment (home/office) 2. Who are you to think that you can “have it all” What did you learn? How balanced are you?

3. Money always comes at a price If you’re like the majority of us, you may find you’re 4. Money doesn’t grow on trees neglecting a few of these areas in your life. However, now 5. And my favourite: I’ll be a different person if I have seeing it in black and white, you’ll have to do something too much money. about.

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Bull pucky. I will guarantee that you will just be more of 2. Now, take those stowhat you already are! ries and apply Byron Another area that can be very unsatisfying is a signifi- Katie’s “The Work” to cant other/romance. How did this one score? each one. For each story For some people not having someone in their life is a you have come up with, huge source of stress. What they want most of all is to have answer the following four someone to hold their hand, be a shoulder to lean on and questions: to have some fun salsa dancing.

• Is it true?

Let’s peal back that onion again. What do you think is • Can you absolutely the number one fear that prevents people from finding a know it’s true? person to love? Did you guess the fear of rejection? Some • How do you react — what people are so afraid of being judged it stops them in their happens, when you believe that tracks when they see a potential partner. Are you one of thought? these people?

• Who would you be withHere a few comments that you might recognize from out the thought? your inner gremlin if you suffer from this fear: What did you learn as you 1. She would never date a man like me applied these questions to your 2. I don’t have enough money in my bank account story? Did it become just that: only 3. I’m too fat a story you can laugh at and dis4. He would never want a woman who has children. card?

Did one of these hit the spot?

Imagine how much freer your life It’s incredible how much we allow would be if you could get rid of your our fears to hold us back. Let’s see Some common fears make-believe stories. what this gremlin might have to say I’d like to leave you with one of the that have to do with most inspirational messages I have about some of the other areas of our lives: ever read. I hope it inspires you to the accumulation of • Career: I’m not smart enough to carry on with your soul searching so money include fear go for that promotion you can get the life you desire and • Health: If I lose weight, I’ll have deserve! of failure, fear of to buy all new clothes (you’d think Our Deepest Fear, Marianne rejection, and fear this would be an incentive but you Williamson “Our deepest fear is not that we are can’t imagine for how many women of success. inadequate. Our deepest fear is that we this holds them back) are powerful beyond measure. It is our • Physical Environment: I don’t light, not our darkness that most frightens us. We ask ourdeserve to have the home of my dreams selves, Who am I to be brilliant, gorgeous, talented, fabu• Fun and Recreation: I have no time for fun in my life • Personal Growth: If I begin to grow, my husband will lous? Actually, who are you not to be? You are a child of God. no longer understand me and will Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won’t leave me.

You get the idea. feel insecure around you. We are all meant to shine, as chilSo, what do dren do. We were born to make manifest the glory of God you do now that that is within us. It’s not just in some of us; it’s in everyone. you’ve realized you may be And as we let our own light shine, we unconsciously give holding yourself back with your other people permission to do the same. As we are liberated inner dialogue? Let’s do a bit from our own fear, our presence automatically liberates others.” more digging: Remember: Life is too short — make the most of it!

1. For each of the eight sections of your life mentioned at the Tammie K. Ross is the president of Impact Coaching Solubeginning of this article, write out the story that you are mak- tions. She also works for the non-profit organization she ing up that is preventing you founded, Women Together, and sits on the board of directors from getting the life you want. for the Women’s Community House and LEADS Employment A trick for this is to listen to that London.

As a treat for readers, Tammie has agreed to give a free inner gremlin that begins chirping in your ear when you even begin to half-hour session to anyone who calls stating they read this article. think that you can get to a 10. www.claimscanada.ca

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Scoping the Loss – T

BY GREG MILLER

The first thing a property loss analyst must understand is that scoping a loss is distinctly different from estimating a loss. Scoping is the process of developing and constructing the framework from which an estimate can be prepared. Without the scope of loss, there can be no estimate. The development of the framework begins at the scene of the loss. After the scene is released, and necessary approval and authorization are given to the contractor to physically access the site, preparation work is determined which will ultimately lead to scoping the loss.

Unobstructed path and eliminating open items When a property suffers extensive damage, there are two obstacles to viewing the structure clearly: Unstable or collapsed structural and finishing components, and contents. If we assume the cause of loss has been determined, the contractor must act to realize a safe, clear and accessible open space or spaces. First, they must make the worker environment safe by removing and/or stabilizing vulnerable and compromised materials. Second, or blending with the first, pack-out and move-out all contents that have been damaged or will ultimately impede opened structure examination and repairs. The reference to “opened” speaks to test cuts that are designed to follow the otherwise hidden travel path of water, fire and smoke. Third, catalogue and save materials where identification of like, kind, and quality will become necessary when the point of

Greg Miller

estimating the loss is reached. With the efficiencies of expert project management from the technician to the carpentry/labourer end of the business, the unobstructed path can be realized in as little as 24 hours.

Creating a plan We are now left with a clean slate on which to build a scope. It is not the repair, but the framework for the repair. At this point we create a plan to plot the scope of the repair. What comes first, second, third? What is directly and indirectly related to the loss? Are these relationships interdependent when it comes to repair? Are permits required? Building code considerations? Upgrades? Who pays for what? Notes are both critical and helpful. How do I adjust my scope to provide current market materials (of same performance, longevity, and properties) to what is no longer made? Understand what has been affected by the loss — follow the travel path of damage.

Planning the scope If we know what the direct and secondary effects of damages are, we can

begin to format and build the framework. The framework is simply a way of organizing headings and subheads in a clear, readable and understandable order. As an example, it can move from an overall heading of “Two Storey Residential” to subhead one, interior, subhead two, second floor, subhead three, rooms: master bedroom, Cathy’s bedroom, John’s bedroom, guest bedroom, bathroom. Assuming a sketch or floor plan has been done, we can then record dimensions by each room showing width, length, ceiling height and dimensioned objects such as doors and windows.

Scoping the loss Scoping the loss is simply identifying the repairs required and setting them out in a chronological order.

This is a stage where logic can be applied. Think sequence: What is the first item in the repair process? Let’s use the example of a fire and assume we have the condition of an unobstructed path and have eliminated open items.

Here is a typical order: Clean, seal, insulate, vapor barrier, drywall, trim, paint, pad, carpet. There is a start to finish sequence in what is done first and what is done last. Depending on the degree of damage, other items requiring repair may be inserted into a sequence. Notes can be extremely helpful to the analyst who reviews the scope, as they support the scope, and expand, clarify, rationalize and satisfy ambiguity.

In preparing the scope, we must be cognizant of our purpose. We are restoration professionals. Our role is continued on page 34

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– Two Perspectives

BY GRAHAM DICK

Property damage restoration has been a rapidly evolving industry.

Increased government regulations and laws regarding safety, hazardous materials, labour code, building codes, material choices and ANSI standards for water and mould have created a much more challenging technical environment. Educating and training staff is a constant challenge and is increasing cost. Helping our clients (the adjusters, examiners, and brokers) understand how these effect change on claim processing is also a big challenge as many changes have caused costs to outpace inflation.

Scoping vs. estimating Is there a difference between scoping and estimating? Many use these words interchangeably. It is also critical that material specifications are defined as large price variation can occur here.

A scope is the technical steps or procedures that return the subject property to pre-loss condition. Estimating is the pricing and customized formatting with appropriate breakdown/documentation to satisfy client requirements. One cannot write an estimate until the scope and specifications are clearly defined.

Timing The timing of this process is important. Reserves must be set quickly after the emergency has begun. Communication and collaboration between the insured, the adjuster and the contractor must be regular enough that no one is making assumptions. It’s interesting

Graham Dick

that no matter how well you know someone, when you make an assumption it is rarely positive. This makes getting accurate information into everyone’s hands in a timely matter the key to managing the crisis event successfully. First the damaged materials must be identified and valuated to create the specification list. The scope of repair for emergency, contents and final repairs are developed and refined during the emergency phase of the job. The emergency is typically defined as that point at which contamination is removed, activity can stop without continuing damage and there are no further surprises that would prevent an accurate repair scope. This isn’t a business that allows low-balling the price because of a poorly written scope and making all your profit on the supplemental.

Parts of a scope When preparing a scope there are questions that need to be answered.

Consider that you’re painting a picture for an examiner that may never physically see the site. Noting the cause, describe how the resultant damage

occurred and trace the complete extent of the damage. Bring attention to any issues that create an unusual cost burden to the loss. Good damage assessment requires a clear understanding of construction methods, materials, chemical and biological contamination issues, hazardous material identification and proper remediation/abatement techniques and content restoration technologies. The value judgments in scoping the loss come in deciding whether it makes sense to restore, repair, refinish, renovate or replace. In most cases it’s crazy to spend any more than about 60 to 70 per cent of replacement cost on restore and repair options. Just because something can be done technically doesn’t make it a good decision to do so. Another point in the scope is to identify health and safety risks on the loss and what must be done to minimize these risks. The finished result looks like this: • Cause and damage report with pictures • Safety assessment with recommendations • Hazardous material identification and contamination issues report • Area specific breakdown of activities required to return to pre-loss condition • Notes of unusual issues and recommended solutions • Material specifications of all replacement parts

Estimating Estimating is not going to your industry software program, clicking on continued on page 34

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returning damaged property without compromise to pre-loss condition.

This speaks to the thinking process in preparing our scope of repair. When do we repair (including detach and reset) versus replace and vice versa? If the answer is that the recommended action does not compromise like, kind, and quality, then the action is correct.

The final subhead in the framework

of the scope should be General Information. This area can include scope items of post construction cleaning, services, permits, fees, disposal bin/ waste tonnage any other general entry which is non-specific (or for a bulk sub-source or sub-trade entry) to individual subheads.

Now that the scope has been created, the estimate can move forward as

the final component to completing the report.

Greg Miller is vice president of business development and a partner with IntegResource Canada. He has 18 years service in the service provider and was an Insurance Institute Chapter recipient of the McLaughlin Award for community service in 2005.

Dick continued from page 33

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 34

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a bunch of line items with ‘average’ unit prices and seeing what the number is at the end. This is like shooting at a wall and then taping the target over the hole. Unfortunately, this is common practice. Some go so far as to rely on subtrades to price the parts and simply add their overhead and profit.

Proper estimating starts with understanding your direct costs, indirect costs, overhead and enough profit to have sustainable business model. For example, industry studies show that true overhead runs between 23 to 35 per cent depending on the size of the contractor. Once you have figured out what the final price needs to be, you are ready for the next step.

Formatting This is customer service: To format the invoice to fit the particular needs and requirements of each customer.

Various software programs are requested. Breakdown and documentation requirements vary somewhat between insurance companies. Overhead and profit rules vary. What is important to understand is that the formatting doesn’t create the final price, it explains it. Creating value and showing how the decisions made reduced the cost/size of the loss will result in repeat customers.

In the end, it’s about closing files as efficiently as possible.

Graham Dick is president and owner of Genesis Restorations Ltd. in B.C. Committed to education, Graham has achieved almost every available industry certification and designation.

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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 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

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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

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

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

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

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

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

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

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

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

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

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

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

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Defining Pain Disorders Assessing and diagnosing pain in chronic cases.

BY ZOHAR WAISMAN

ain is not only inevitable, but is crucial earlier concepts of psychogenic pain and is more likely a mental illness. This condition to our well-being, as it alerts us when requires the clinician to first rule out any our bodies are being harmed. At times, physical causes to the pain. The second conhowever, pain does not go away, even after dition is synonymous with chronic pain synthe original cause is no longer present — it drome so it is not purely a mental disorder. becomes chronic. According to a 2001 Cana“Melzack and Katz (2006) point out that dian survey, 18 per cent of women and 14 per pain patients diagnosed with chronic pain cent of men suffer from chronic pain.1 Many disorder due to psychological factors may be people manage to cope with their pain and unjustly given a psychiatric diagnosis, especontinue to live fruitful and enjoyable lives Zohar Waisman cially because there are always physiological despite the limitations it might bring. Others react poorly to pain and gradually become entangled in self- underpinnings in cases of pain. They disagree that pain can defeating thoughts and behaviours, over-medication and be constituted by primarily psychological factors factors (presumably excluding cases of malingering). Moreover, despair.2 Over the last two decades, the definition of pain disor- they suggest that when clinicians use the label of chronic ders has undergone significant change, and has been tied to pain disorder, they may be understood as saying that the evolving medical and psychiatric concepts about pain. pain is fully psychological in origin . . . Moreover, pain These changes have caused confusion and have led to fre- patients may be exaggerating their symptoms either conquent misuse of terminology. In the Diagnostic and Statisti- sciously (with awareness), or unconsciously (without cal Manual of Mental Disorders, Fourth Edition (DSM IV), awareness), they may be experiencing their pain due to the definition included three types of pain disorders: pain stresses related to secondary gain issues rather than to disorder associated with psychological factors, pain disor- stresses directly related to the original pain onset and its der associated with psychological factors and a general med- effects . . . Problems such as these could be obviated by more ical condition, and pain disorder associated with a general precise diagnostic criteria for chronic pain disorder in DSM medical condition. The third condition is not a mental ill- IV. The criteria, as they exist, leave room for ambiguity in interpretation,� according to Causation of Psychology ness at all and should only be diagnosed by a physician.

According to DSM IV, pain disorder associated with psy- Injury.3 chological factors is a category used when the psychological The question that often comes up in disability evaluafactors are judged to have the major role in the onset, sever- tions is why some people with chronic pain develop disability, exacerbation or maintenance of the pain. Pain disorder ity whereas others appear to be able to cope with the associated with both psychological factors and a general demands of life. Research has shown that certain coping medical condition is used when both psychological factors styles may enhance pain such as fear-avoidance, catastroand a general medical condition are judged to have impor- phizing and low self-efficacy. Other researchers have protant roles in the onset, severity, exacerbation or mainte- posed that certain personality styles and pre-existing mennance of the pain. tal disorders may increase vulnerability to chronic pain.

Although both of these conditions could be classified as Distressing emotions understandably accompany chronmental disorders, the first condition is closely related to the ic pain problems. At times these emotions are sufficiently

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severe to constitute a comorbid mental disorder. The most ception of pain and suffering in the individual being common mental disorder to occur with chronic pain is assessed. Following that is the diagnosis of any comorbid depression. Approximately one-third of chronic pain mental disorders that complicate the clinical picture. The patients have a full depressive syndrome and close to 50 per psychiatrist is in a unique position to comment on complex cent have a history of depression.4 Other mental conditions medication regimens for pain and emotional issues. Often that are often associated with chronic pain include anxiety patients with chronic pain are placed on elaborate cocktails of medications including pain killers, tranquilizers, antipsydisorders and alcohol and substance related disorders.

Chronic pain patients frequently reject psychological chotics and antidepressants. There are numerous side effects associated with these medications that explanations and treatments for their often contribute to the perception of pain. These patients emphasize the The assessment disability in addition to creating a mulphysical nature of their pain and seem titude of problems including sedation afraid that psychological explanations of of chronic pain and, at times, dangerous interactions their pain imply they are imagining the between the various medications. pain or putting it on. Often the patient’s patients should The treatment of chronic pain family has a shared belief about the always start with involves the delicate interplay of psycause of the problem and reinforces the search for a physical cause and treatan understanding of chotherapy and psychopharmacology: Psychotherapy in the form of cognitive ment. Some families encourage passivity the physical factors behavioural therapy, mindfulness techto avoid expressions of anger and conniques and supportive therapy and psyflict by investing and colluding in the and the type of patient’s disability.5 chopharmacology in the form of antidepressants and other medications The assessment of chronic pain injury that needed to treat comorbid conditions. patients should always start with an contributes to At the crux of the evolving approach understanding of the physical factors to the treatment of chronic pain is the and the type of injury that contributes the pain. idea that pain is inevitable, suffering is to the pain. As a fully qualified physioptional. Unfortunately, it is more cian, a psychiatrist is familiar with the medical terminology used and has an understanding of the often than not that patients go through endless tests and organic pathology involved. The next step in a psychiatric combination of medications to find out that the chronic evaluation is the understanding — through an in depth pain simply can not be eradicated. This realization is the interview — of the unique factors that contribute to the per- first step in accepting the pain is there to stay. The next realization that patients often do not come to understand is the fact that one does not need to be swept away by the waves Diagnosis of Pain Disorder of pain, but rather one can learn to surf through the waves.

We need to learn to change our relationship with pain, and The DSM IV TR (revised) criteria for the see pain without judging it. Experience that we are not our diagnosis of pain disorder associated with pain, and learn to live around it. I often tell patients that both psychological factors and a general “You don’t have to cope forever — just for this moment”. medical condition is: A. Pain in one or more anatomical sites is the predominant focus of the clinical presentation and is of sufficient severity to warrant clinical attention.

B. The pain causes clinically significant distress or impairment in social, occupational, or other important areas of functioning.

C. Psychological factors are judged to have an important role in the onset, severity, exacerbation, or maintenance of the pain.

D. The symptom or deficit is not intentionally produced or feigned (as in Factitious Disorder or Malingering).

E. The pain is not better accounted for by a Mood, Anxiety, or Psychotic Disorder and does not meet criteria for Dyspareunia.

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Dr. Z. Waisman MD, FRCPC is a psychiatrist whose practice is devoted to the assessment and treatment of the psychiatric consequences of personal injury. He is an assistant professor of psychiatry with the faculty of medicine at the University of Toronto and is the current director of education in psychiatry at North York General Hospital and the former director of inpatient psychiatry.

1. Meana, M., Cho, R. & DesMeules, M. (2004). Chronic Pain: The extra burden on Canadian women. BMC Women’s Health, 4, S17 2. Alcock, J., The Psychology of Chronic Pain, presented at the conference on psychological injuries and chronic pain The Law Society of Upper Canada June 7, 2007 3.Young, G. et al Causality of Psychological Injury. Springer 2007 4. Katon W, Egan K, Miller D. Chronic pain: lifetime psychiatric diagnoses and family history. Am J Psychiatry 1985; 142:1156-1160 5. Rickarby GA. Compensation neurosis and the psycho-social requirements of the family. Brit J Med Psychology 1979; 52:333-8

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education forum

A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA

Environmental Claims Investigation and Assessment any different contaminants are present in the air we breathe, the water we drink, the food we eat and the ground we walk on. In investigating an environmental claim, positive identification of the source and cause of pollution is essential. It can be tempting to jump to conclusions about causation, but an adjuster must rely on experts in this part of the investigation.

For example, if gasoline vapours are permeating the basement of a home that’s next to a service station, it’s easy to assume the service station is the source of the fumes. However, some contaminants can have a variety of possible sources, and an expert may be able to examine the migration pattern of the fumes or identify a specific contaminant, proving a different source was fully or partly responsible.

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Fingerprinting the culprit Investigations into toxins can include “fingerprinting” to identify the exact chemical composition of the contaminant and possibly link it to a specific source. Hydrogeologists, geochemists, soil engineers and other experts may assist in determining the identity and source of pollutants and may recommend appropriate cleanup efforts. Experts may also be able to recommend the most economical ways of remediating a contaminated site. In addition, toxicologists, epidemiologists, biologists, veterinarians and medical doctors may be needed in order to prove or disprove the effects of pollutants on plants, animals and humans.

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cipline applicable to the claim. In the service station example above, an expert in aromatic hydrocarbons would be appropriate. In more complex cases, however, it may not be clear which chemical or contaminant is present and what type of expert could best help identify the source. In such cases, care should be taken to select a generalist firm of experts who have specialists in a range of areas, or who are willing to recommend other appropriate experts to supplement the firm’s own strengths.

Costs and benefits Consideration must be given to balancing the cost-effectiveness of expert investigation against the potential loss savings. Experts of considerable experience and education in the chemical and environmental fields charge for their services accordingly. Although the best experts may be expensive, their evidence may save insurers money in the end.

Exposing the exposure One of the adjuster’s roles in any investigation is to assess the exposure faced by the insurer and recommend a reserve. It’s easy to feel intimidated by The loss adjuster must manage the use of experts • Recommend the appropriate expert • Arrange and coordinate the assignment • Monitor the expert’s activities • Receive and read reports and recommendations • Analyze and coordinate findings • Assess the impact on liability and quantum

this task when millions of dollars may be involved, but each item claimed should be validated. The exposure assessment should include: • Overall estimate of entire loss or cleanup costs • Estimate of the insured’s liability, making appropriate adjustments for other defendants involved • Consideration of the allocation theory or theories that may apply — for example, how many years was the insured exposed and to what amount per year?

• Identification of insurance policies available for each coverage year, along with relevant limits and exclusions • Identification of policies of the insurer that are involved • Defence costs for the insured • Consideration of a defence sharing agreement if other insurers are at risk • Estimated costs of defending coverage issues Even in circumstances where it is highly unlikely the insurer will be liable to indemnify or defend the insured, a full investigation must still be undertaken. The adjuster must be clear about the complaint in order to determine whether or not there is an insurance claim.

The nuances of nuisance Many third party environmental claims allege nuisance — a tort involving interference with the right to enjoy property. Nuisance claims are difficult to defend because negligence need not be proven for the claim to succeed; the claimant just has to prove that interference with the right to enjoy property took place, and the interference came www.claimscanada.ca

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from property owned or occupied by the defendant.

However, there are several possible defences to nuisance claims: • Reasonableness of interference: Complaints about the ordinary levels of noise from factories in an industrial area will not be taken seriously. Likewise, the owner of a garage is expected to accept that road salt from cars may cause damage to the premises.

• Sensitivity of claimant: When a claimant is highly vulnerable, such as a manufacturer of extremely sensitive electronic radar equipment, it is not reasonable for that claimant to complain of, say, power line interference from the welding equipment of a neighbouring business.

• Statutory authority: When legislation imposes a duty that inevitably results in nuisance, the nuisance is deemed to be authorized and a third party claimant will recover only if there is a finding of negligence. For example, in most circumstances claims against a municipality for escapes from sewage lines provided as a public duty will not succeed.

Discharges of certain pollutants (mainly in resource industries or other heavy industrial processes) are authorized by government through a licensing process. For example, a pulp and paper mill operation can obtain permission from the Ministry of the Environment to discharge waste water containing certain toxic substances.

Regulations and permissible discharges are forms of statutory authority, so compliance with them may be a defence.

Polluter-pay provisions Under the federal Environmental Protection Act, each province and territory has put legislation in place to ensure cleanup of polluted land. This legislation generally imposes absolute liability on polluters — the polluter-pay principle. In other words, even if an insured abided in the past by what was a reasonable standard of care at the time, the insured would still be liable today for the pollution caused. In addition, an insured who merely acquired polluted land could be held liable for cleanup costs associated with prior pollution of the property. (Some legislative exemptions are available for redevelopwww.claimscanada.ca

ment of brownfield sites.) Other legislation dealing with dangerous goods and materials may also impose onerous responsibilities. Loss adjusters must become familiar with applicable legislation in relevant jurisdictions.

The steep costs of defending environmental claims and contesting coverage cannot be overemphasized. Each case has a settlement value, and it may be more prudent for an insurer to settle with the insured or a third party than

to continue litigation. No reasonable settlement opportunity should be ignored, and settlement options must be given consideration whenever they arise during the investigation.

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.

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 • RICHARD HAYLES • R. LEE AKAZAKI • JODY W. ICZKOVITZ • LARRY C. HENRY • MARY-CATHERINE LILL • 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 June/July 2009

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O on the scene Don Forgeron has taken over the helm as IBC’s new president and CEO. “I speak for the entire board of directors when I say I am delighted with today’s announcement,” Rowan Saunders, IBC board chairman and president and CEO of RSA, said.

“We conducted an exhaustive search for a leader with a passion Don Forgeron for our industry and the right vision for its future,” Saunders added. “Candidates came forward from across the country, presenting an array of qualifications and experience.”

“The search committee was impressed by the quantity and quality of applicants, specifically in terms of their backgrounds and their capacities for leadership at a senior level. From their ranks, Don emerged as the clear choice.”

IBC’s board unanimously approved the selection of Forgeron, who immediately assumed his new post.

Forgeron has an extensive background in government relations. He was previously the organization’s vice president of Ontario. Prior to that, he was IBC’s vice president of the Atlantic region for 15 years.

Forgeron has held leadership roles in IBC’s insurance fraud division and has managed an array of national files, including availability of insurance for the commercial and not-for-profit sectors and rate regulation reform across the country.

“Mr. Forgeron’s expertise in government relations is in keeping with the primary focus IBC’s board of directors has set for the trade association,” Saunders said.

Forgeron is a native of Louisdale, Cape Breton Island, Nova Scotia. His son and daughter live in Halifax. He and his wife, Linda Kelly, a former CBC television anchor, now make Toronto their home. ●

FirstOnSite Restoration LP has expanded with a new location in East Toronto.

Dan Loosemore, general manager of the Hamilton district, will be overseeing the newest office.

“The decision to expand into Scarborough with this location ensures FirstOnSite offers our clients the degree of coverage they are expecting from Canada’s Corporate Restoration provider,” Loosemore noted in a release. “It will allow us to better service the GTA from both the east and west side of the city.”

Loosemore currently oversees branches in St. Catharines, Hamilton, Brantford, Mississauga, CO2 Blast (Brantford) and now Scarborough. ●

Winmar Franchise Corp. has opened a new franchise in Medicine Hat, Alta. located at 1275 Brier Park Way NW. Brian and Sharon Schwieger have owned and operated Desert Restoraton Services since 2007, servicing Medicine Hat, Brooks and all surrounding areas. Brian is IICRC certified, a building operator “A” certified and is WHMIS certified. Sharon CAIB, CIP, CRM has more than 20 years worth of experience in claims, underwriting, and risk management. For the past 10 years, she has worked as an independent adjuster and supervisor for a large property/casualty Insurer. ●

Claudine Davoodi has been appointed director of claims operations in Montreal for Crawford & Company (Canada) Inc. Additionally, Richard Viau has been appointed director of Crawford & Company (Canada) Inc.’s global technical services division in Quebec.

Davoodi will have operational responsibility for the claims operations in Montreal and will assist in leading and directing the growth and market strategies. She has more than 30 years of experience in the insurance industry and spent the majority of the past 15 years in senior claims management operations roles in both Ontario and Quebec.

Viau has also qualified as a global technical services executive general adjuster. He has more than 35 years of claims and operational management experience, and is licensed in all lines with particular expertise in commercial and industrial property losses. ●

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 40

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Ami Barilla

Cunningham Lindsey Canada Claims Services Ltd has added two new members in April to its business development team.

Ami Barilla was appointed director of sales and marketing for the western region.

Andrew Rayner joined Cunningham Lindsey as the director of sales and marketing.

“Both Ami and Andrew have proven abilities to develop sales potential in new market areas while growing existing market share,” said Albert Poon, vice president of strategic business development and claims management services at CL. “We anticipate they will serve both CL and our customers well.” ●

Andrew Rayner

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Tim Vanderwillik, first vice president of the Bluenose – Atlantic Chapter — of the Canadian Insurance Claims Managers Association (CICMA), and Jane Richardson, president of the Nova Scotia Chapter of the Canadian Independent Adjusters’ Association, presented Shannon Bezanson of the Children’s Wish Foundation with a cheque for $5,000.

The money was raised during the joint CIAA/CICMA conference in June 2008. The Foundation grants 150 wishes a year in Nova Scotia, and 15,000 nationally. Each wish costs, on average, between $10,000 and $11,000. ●

Tim Vanderwillik, first vice president of the Bluenose – Atlantic Chapter — of the Canadian Insurance Claims Managers Association (CICMA), and Jane Richardson, president of the Nova Scotia Chapter of the Canadian Independent Adjusters’ Association, presented Gena Walton of IWK Health Centre, with a cheque for $5,000. The money was raised during the joint CIAA/CICMA conference in June 2008. ●

The CIAA Pacific Region held its executive meeting on Apr. 22, 2009. From left to right: Evan Miles, Lisa McCabe, Mike Gojevic, Clayton McKay, Alan Hart, Bob Scott, Greg Thierman, Reno Daigle. Jim Eso, Pacific Region president, is taking the picture. ● www.claimscanada.ca

The CIAA Pacific Region, in partnership with the Insurance Institute of British Columbia, presented a seminar Apr. 22 on Mediation: Soft Skill, Hard Science. David P. Stark, B.Ed., LLB., FCIP was the presenter. ● Representatives from the CIAA were on-hand at the Insurance Brokers Assocation of Alberta’s convention May 3 to 6, 2009. ● ▼

p40-41 on the scene

Greg Merrithew, Bea Boutcher and Reno Daigle man the CIAA Booth

CIAA New Members — April 2009 INDIVIDUAL MEMBERSHIP Cormier Adjusting Limited Adam Cormier, CIP

Huntsville, ON

Investigator

Crawford & Company (Canada) Inc. Dean Loverin Kelowna, BC Brent Hunt Kitchener, ON Martin Ivancic Toronto, ON Michael Jarvis Toronto, ON Lori O’Connor Waterloo, ON Sylvie Solomon Newmarket, ON Greg Wial Oakville, ON Deanna Love Waterloo, ON Cam Monroe Waterloo, ON Jeff Schumacher Waterloo, ON Sydney Leer, FCIP Dartmouth, NS

Student Investigator Student Investigator Investigator Student Licentiate Investigator Investigator Student Investigator

Kernaghan Adjusters Limited Alan Austin Vancouver, BC Donna Rae Vancouver, BC

Licentiate Student

Marsh Adjustment Bureau Limited Ellen L. Dunn Bedford, NS

Student

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O on the scene Members from the Canadian Independent Adjusters’ Association attended the National Association of Independent Insurance Adjusters (NAIIA) 72nd Annual Conference, May 11 to 15, at the JW Marriott Starr Pass Resort, Tucson, Arizona. ●

▲ Marty Brown, NAIIA immediate past president; Reno Daigle, CIAA president

Claudette Daigle; Jack Kidder, NAIIA president 2009 – 2010; ▲ Barbara Kidder; Reno Daigle, CIAA president.

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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APPOINTMENT

The generous donation from 10 Winmar locations means years of fun for countless children at The Hospital for Sick Children in Toronto.

The first annual Wish Upon a Star Charity Golf Tournament, held Oct. 8, 2008, raised $35,000 for the Starlight Children’s Foundation.

Due to Winmar’s donation of $5,000 at the tournament, the Starlight Foundation was able to purchase a new Fun Centre for Sick Kids hospital.

The Starlight Fun Center is a mobile entertainment unit featuring a Sharp AQUOS flatscreen television, a DVD player, a Nintendo Wii gaming system and a wide variety of Wii games.

According to Debby Matz, corporate marketing representative at Winmar, Sick Kids was chosen as the recipient of the Fun Centre because children from all over Ontario are able to go to Sick Kids for treatment. Additionally, it is near and dear to a number of the owners whose children have been treated there and they are forever grateful for that. ●

Todd Cooper President

ASAP Secured Inc., Ontario’s leading provider of emergency security personnel to the insurance industry, has appointed Todd Cooper as its new president. He officially assumes the position effective immediately.

Mr. Cooper brings 20 years of progressive leadership in the service industry to ASAP. Prior to his appointment, he was with Intercon Security as its eastern Canada division director, overseeing 42,000 man hours of guard coverage. Before that, he held a senior leadership role (regional director) with the U.S.-based staffing company Labor Ready. There, he was responsible for sales and operations for branch offices spanning Saskatchewan through Nova Scotia.

The appointment of Mr. Cooper signals a new era of aggressive growth and expansion for the emergency response leader. Mr. Cooper has ambitious aims to expand the team, building on its success in the Ontario market to explore more disaster relief and security opportunities throughout the region, and across Canada.

Since 2000, ASAP Secured Inc. has been Canada’s leading fire and disaster security service, integral in securing countless sites ravaged by fire or other calamities at the request of insurance providers. ASAP dispatches internally-trained security professionals at quick response times. It also provides court- ready information and documents from its PIPEDA-approved headquarters.

www.asapsecured.com www.claimscanada.ca

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O on the scene More wishes will be coming true this year, thanks to the 15th Annual Starlight Insurance Gala in support of Starlight Starbright Children’s Foundation. While the event was black-tie, that didn’t stop guests from ‘taking a walk on the wild side’ — which was the theme of the evening. A total of 16 wishes were sold, and the event raised a total of $150,000. ●

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Crawford & Company (Canada) Inc. extended a Florida-warm welcome to Canadian delegates of the Risk and Insurance Management Society. The Moon Fish Restaurant set the stage for its RIMS dinner, where delegates were treated to four courses with wine pairings. â—?

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O on the scene More than 100 industry veterans attended the roasting of Debbie Robinson, executive director for the Canadian Litigation Counsel (CLC), during the 50th Annual Reception of the Quarter Century Club. Gilbertson Davis Emerson LLP and McCague Peacock Borlack McInnis & Lloyd LLP both donated $2,000 to Camp Bellaleo on Belwood Lake at the event held May 6 at the Hilton International in Toronto.

Robinson started her career in the insurance industry at CIAG Insurance in 1975. Robinson went to work with Constitution Insurance in 1979, Dylex Ltd in the risk management department in 1981, before providing consulting work in risk management and training for a number of companies. In 1992 she joined UAB as director of business development and marketing, and by 1998 she was promoted to vice president. She joined CLC in 2004. â—? â—?

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O on the scene Approximately 250 delegates attended the Ontario Risk and Insurance Management Society (ORIMS) AGM and dinner on May 21, at the Royal York Hotel in Toronto. ORIMS president Steve Pottle introduced and thanked the 2009 council, and announced a donation of $5,000 to Habitat for Humanity before giving the spotlight over to Dave La Fame, a singer-comedian that can impersonate more than 200 different performers. ●

‘Survival Strategies — A Bridge Over Troubled Waters: Local, National and Global Perspectives,’ formed the platform for the CIP Society’s 2009 Symposium. Participants took in interactive group discussions and seminars, as well as key note speeches from the likes of Warren Jestin, senior vice-president and chief economist, Scotiabank Canada; Glenn Gibson, global chief strategy officer of Crawford & Company, Inc.; and Dr. Lloyd Atkinson, a global economic specialist and best-selling author. ●

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WICC Ontario held its 13th annual gala dinner – Zen Garden – on April 8 at The Westin Harbour Castle Hotel in Toronto. WICC dinner co-chair and the evening’s emcee, Michael Butler introduced WICC co-chairs Carolyn Horan and Jean Faulkner who presented Peter Goodhand, president of the Canadian Cancer Society, Ontario Division with a cheque from WICC for $250,000. Economical Mutual Insurance Company, Hallmark Insurance Group and Simmlands Insurance each received a Gold Flame Award; Enterprise Rent-aCar Canada received the Lew Dunn Memorial Award and The Honourable Order of the Blue Goose Ontario Pond received the WICC Hall of Flame Award. Marilyn Horrick past-dinner chair recognized WICC Tributes in a very moving presentation. It was also announced the Canadian property and casualty insurance industry has raised more than $4,000,000 for cancer research since the inception of WICC in 1996. ●

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O on the scene Cunningham Lindsey Canada held a cocktail reception on Apr. 23 in Toronto at Forte Bistro and Lounge. Cunningham Lindsey technical adjusters from across Canada were on-hand to meet and greet the more than 150 guests who attended from throughout the insurance and risk industry. â—?

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Winmar-CC_CU-June2009:Van-Directory List

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The full service restoration company with over 50 service locations across Canada.

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BRITISH COLUMBIA Kelowna Vancouver

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NEW BRUNSWICK Bathurst (service bilingue) Fredericton Miramichi Moncton (service bilingue) Saint John

506-548-4650 506-455-0051 506-622-5710 506-859-8988 506-333-7622

NEWFOUNDLAND/LABRADOR St. John’s

709-754-9111

NOVA SCOTIA Halifax/Dartmouth 902-468-5899 New Glasgow 902-695-3511 Port Hawkesbury/Cape Breton 902-625-3366 Sydney 902-567-0400 ONTARIO Barrie Belleville Bracebridge Brampton Brantford/Simcoe Burlington Chatham Cobourg Collingwood

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Cornwall Dryden Fort Frances Georgian Bay/Muskoka Goderich/Clinton Guelph Hamilton Kingston Kitchener/Cambridge Leamington London Markham Mississauga Newmarket Oakville Orangeville Orillia Oshawa/Durham Ottawa Owen Sound Peterborough/Kawartha Sarnia Sault Ste. Marie Scarborough St. Catharines/Niagara Stratford St. Thomas Sudbury Thunder Bay Toronto Windsor

613-932-0200 807-623-8855 807-623-8855 705-549-9994 519-524-5600 519-826-0000 905-664-1200 613-542-0000 519-895-0000 519-326-7600 519-451-0000 905-415-3473 905-822-0000 905-868-9393 905-822-0000 519-940-8400 705-326-5996 905-728-9380 613-831-0041 519-372-0003 705-745-9894 519-541-0000 705-946-8765 416-452-4173 905-680-0101 519-273-0000 519-637-3900 705-524-3813 807-623-8855 416-213-8844 519-974-0000

SASKATCHEWAN Saskatoon

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For more information visit www.winmar.ca