Claims Canada August/September 2011

www.claimscanada.ca

August/September 2011

Official Journal of the Canadian Indeépendent Adjusters’ Association

HITTING THE ROAD A BUSINESS INFORMATION GROUP PUBLICATION Publications Mail Sales Agreement #40069240

p1 CLAIMS COVER AUG/SEPT2011.indd 1

04/08/11 10:45 AM

Exceptional expertise

• Forensic Engineering • Environmental Engineering • Health and Safety • Computer Forensics

416.368.1700 giffinkoerth.com

Contents AUGUST/SEPTEMBER 2011 • VOLUME 5 • NUMBER

4

Cover Feature

12

12 Hitting the Road The Canadian Independent Adjusters’ Association has launched a national catastrophe response resource. The association is also working on a new education program for independents, and continues to focus on pressing industry issues, such as adjuster health and safety.

BY LAURA KUPCIS

Spotlight 20 On the Rise As incoming president of the Canadian Independent Adjusters’ Association, Greg Merrithew intends to increase the profile and value of the association.

42

BY LAURA KUPCIS

Education Forum 54 Adjusting to SABS Determining benefit entitlement requires integrating medical information and actuarial information to determine an appropriate course of action.

News Features 22 Falling Under

42 Climate Change

While more than 50 per cent of all claims in Ontario are currently falling under the MIG, this could have serious cost ramifications in future if case law does not favour insurers who are applying the MIG prior to the renewal date.

The insurance industry continues to discuss climate change as the number of natural disasters continues to rise.

BY LAURA KUPCIS

24 A Call to Duty An independent adjuster’s first-hand account of adjusting claims in Slave Lake.

BY SEAN M. DOUGLAS

29 Benefits Best practices for adjusting an IRB claim.

BY LAURA KUPCIS

30 Soot Damage Soot residue produced by fire is one of the most challenging type of damage.

BY MATTHEW ALLAN

32 The Forest Fire That Took a Town A restoration professional provides his firsthand account of the damage in Slave Lake.

BY MARTIN MORAN

34 Property Loss Update

BY MIKE WALLACE

44 Sustainability: The Social Footprint

50

A claims employee is offered the chance of a lifetime to volunteer in Vietnam.

BY LUIS DE SOUSA

46 Green Parts A recent summit on recycled parts brings together three stakeholders in the industry: recyclers, insurers and repairers.

Departments

By STEVE FLETCHER

4 First Notice

48 Correct Evaluation Loss size can be dramatically affected through careful consideration of whether equipment is repaired or replaced.

BY DAVID GEORGE WELDON

50 Subrogated Action

56 On The Scene

Columns 54 Education Forum

Zurich Insurance v. Ison T.H. Auto Sales Inc. addresses control of subrogated action.

BY MICHAEL S. TEITELBAUM

Recent court cases showcasing the use of experts in a claim.

BY GLENN GIBSON

p3 contents.indd 1

04/08/11 10:57 AM

• first notice FN Insured damage from Slave Lake wildfires hits $700-million mark Insured damage caused by wildfires that ravaged much of the town of Slave Lake, Alta in May has hit the $700-million mark, according to the Insurance Bureau of Canada, citing PCS-Canada data.

This makes the Slave Lake wildfire the second-costliest insured disaster in Canadian history. The most expensive insured disaster in Canadian history remains the ice storm that hit Quebec and Ontario in 1998, which cost over $1.8 billion (figure adjusted for inflation).

Data collected by PCS-Canada confirms that several thousands of claims have been filed for damage to homes, cars and businesses in the wake of the fires, IBC says.

“The scale of the destruction to homes and property is incredible,” said Doug Noble, vice president, Alberta and the North, IBC. “It’s devastating for those who have been affected.”

The entire recovery process may take more time than usual because of the extent of the claims and the availability of skilled trades and labour for demolition and rebuilding, IBC says. ●

4

Claims Canada

p4,6,8 FIRST NOTICE.indd 4

Ontario reforms are stabilizing the auto insurance product: IBC Ontario auto insurance reforms implemented last year have led to stability in the auto product, the Insurance Bureau of Canada says.

“Recent claims that auto insurance rates may be rising dramatically are neither accurate nor supportable,” IBC says. “Ontario’s recent auto insurance reforms are addressing cost pressures and working to stabilize the province’s auto insurance system.”

A press release issued by IBC cites data provided by the General Insurance Statistical Agency (GISA) and the Financial Services Commission of Ontario (FSCO). The data show that Ontario auto insurance rates have been trending at the rate of inflation.

The target range set by the Bank of Canada to contain inflation ranges from 1 to 3 per cent.

“Based on GISA data,

monthly average premiums have increased by 2.5 per cent from May 2010 to May 2011,” IBC says. “FSCO’s data for the first quarter of 2011 shows an average increase of 1.78 per cent” “Auto insurance premiums that are renewed today can reflect rates that were requested up to one year ago,” said Ralph Palumbo, vice president of IBC’s Ontario region.

“The tangible benefits of Ontario’s auto insurance reforms will take some time before they are realized by consumers. The good news however, is that we are already seeing that premium increases when they occur, are keeping pace with the rate of inflation.” l

B.C. changes Insurance Act to protect co-insureds B.C. has changed its Insurance Act to protect innocent co-insureds from coverage exclusions if a loss is caused by the criminal act of another person coinsured on the same policy.

Based on the wording of the law, a policy exclusion would apply to a person who: • committed the act or omission that led to the loss or damage; • abetted or colluded in the act or omission; • consented to the act or omission and knew or ought to have known that the act or omission would lead to loss or damage; or • is in a class prescribed by regulation.

The amendment says a policy exclusion would not apply to an innocent co-insured who does not fall under the above criteria. Nonetheless, the innocent co-insured may not collect “more than their proportionate interest in the lost or damaged property.”

Also, the innocent co-insured is ob-

August/September 2011

ligated by law to cooperate with the investigation of the insurer, whether by submitting to an examination under oath and/or producing relevant documents to the insurer.

In its recent newsletter, Insurable Interest, Raman Johal of Clark Wilson LLP notes there are some ambiguities arising out of the legislative amendments.

“The regulations do not include a definition of ‘proportionate’ and there is ambiguity concerning its meaning,” Johal wrote. “Does the interest of the innocent co-insured have to be a legal interest in the property or can it include a beneficial interest of someone such as a spouse who has contributed to the maintenance or finance of the property but is not legally on title?”

Also, Johal wrote, whether someone “knew or ought to have known” about the criminal act is a matter of fact that must be fully investigated before making a decision about coverage. l

www.claimscanada.ca

04/08/11 10:59 AM

• first notice FN Insurers need to discuss restricted activities with clients, in light of arbitrator’s ruling in Ontario limo “stripper pole” case: lawyer A McMillan LLP article says insurance companies should be discussing any expectations placed on clients and restrictions on activities permitted on insured premises or within an insured vehicle, based on an Ontario arbitrator’s ruling in Whipple v. Economical Mutual Insurance Company.

In Whipple, now under appeal, Daniel Whipple, 62, was paralyzed after attempting to do a handstand on a “stripper pole” inside a luxury limousine coach. The bus was taking a party of 12 home following a round of golf.

The Economical denied benefits, arguing the handstand attempt did not amount to an “accident” because the effort had nothing to do with the ordinary use or purpose of a vehicle.

The arbitrator ruled against the insurer, saying the presence of the stripper pole inside the so-called “party bus” invited the kind of behaviour that resulted in the injury.

In an article for the International Law Office, McMillan LLP lawyer Hartley Lefton says insurers need to work closely

with clients to identify expectations about conduct and whether it will be insured.

“It is likely that the limousine coach owner and the insurer had different conceptions of permitted activities,” Lefton noted.

Lefton suggested insurers and their clients “work together to develop a written policy or contract dictating how the insured vehicle or premises should be used by clients.”

He further observed “no rules or policies were communicated to Daniel Whipple when he rented the bus, nor was

there any evidence of any express or implied waiver.”

Also, Lefton wrote, “it is important to review the marketing by insureds of their premises or vehicles. “The fact that the vehicle was referred to as a ‘Party Bus’ designed to provide ‘service and transportation needs to fit the client requests’ weighed heavily on the arbitrator in her determining that Whipple’s activities were not outside of the scope of the vehicle’s use and operation.”

Finally, “it is important to review the insured premises and vehicles,” Lefton says. l

Licensed medical doctors, neuropsychologists should lead catastrophic impairment assessment: panel recommendation Ontario’s Catastrophic Impairment Panel is calling for medical doctors or doctorate-level neuropsychologists (in the case of brain injuries) to be the lead evaluators in the assessment of people with catastrophic impairments arising from auto injuries.

FSCO established the panel of medical experts last year to produce recommendations on the definition of a ‘catastrophic impairment’ under the Statutory Accident Benefits Schedule (SABS).

FSCO also asked the panel of medical experts to provide recommendations on the training, qualifications and experience of assessors who conduct catastrophic impairment assessments for auto accident benefits. The panel’s full report on the training, qualifications and experience of cat assessors can be found at: http://www.fsco.gov.on.ca/english/ insurance/auto/reform/documents/ CAT_Report_PhaseII.pdf The expert panel recommends that a lead evaluator be responsible for over-

6

Claims Canada

p4,6,8 FIRST NOTICE.indd 6

seeing the catastrophic impairment assessment process.

Doctors or neuropsychologists acting as lead evaluators should have at least five years of licensing or registration in

August/September 2011

Canada, the panel recommends. Doctors must be licensed to practice by one or more Canadian Colleges of Physicians and Surgeons.

The panel also recommends that “all clinicians involved in the assessment of catastrophic impairment be trained, depending on their scope of practice, in the use of the American Spinal Injury Association (ASIA) classification for spinal cord injury, Extended Glasgow Outcome Scale (GOS-E) for traumatic brain injury in adults, the Spinal Cord Independence Measure for ambulation disorders, the Global Assessment of Functioning (GAF) for psychiatric disorders and/or the American Medical Association’s (AMA) Guides to the Evaluation of Permanent Impairment, 4th edition for the assessment or physical impairments.”

The panel has called on Ontario’s auto insurance regulator, the Financial Services Commission of Ontario (FSCO), to develop transition guidelines while training is being done. l

www.claimscanada.ca

04/08/11 11:00 AM

THIS IS MORE THAN A HURRICANE. To business owners who have tirelessly committed themselves, it’s the loss of their dreams and livelihood. To insurance professionals, it’s the challenge to fairly and accurately quantify what their loss is worth. When disaster strikes, trust the firm that provides expert, objective opinions and quality resources. BDO. More than you think.

Business interruption | Irb calculations | Personal injury claims | Forensic investigations Inventory losses | Fidelity & surety bonds VANCOUVER | CALGARY | EDMONTON | WINNIPEG | TORONTO | MONTREAL | HALIFAX ASSURANCE | ACCOUNTING | TAXATION | ADVISORY SERVICES Greg Hocking ghocking@bdo.ca 416 775 7800

Jeffrey C. Smith jsmith@bdo.ca 416 775 7801

www.bdo.ca/advisory

BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

• first notice FN Changes to Alberta Insurance Act to come into effect on July 1, 2012 Alberta’s department of finance and enterprise has outlined changes to the Alberta Insurance Act that will go into effect on July 1, 2012.

Legislative amendments to the Act include the following: • Legislation will require statutory conditions to be incorporated into multi-peril property contracts. “This will provide clarity for future claims,” the government says in a press release announcing the changes.

• The timeframe to initiate an action has been increased from the current one-year timeframe to two years. This is consistent with the Limitation Act. • The dispute resolution process, currently referred to as the “appraisal procedure,” will be amended to strengthen consumer protection in a claims dispute.

• Electronic transactions will be allowed permitting insurers and policyholders to use modern business practices and technology. (There will be some exceptions where written transactions will still be required to protect consumer interest. For example, the cancellation of an insurance policy or the change of a beneficiary.)

• An individual insured under a group life or accident and sickness policy will be able to obtain a copy of the group insurance policy, excluding any parts containing confidential infor-

Paul Aquino Publisher (416) 510-6788 paul@canadianunderwriter.ca

Steve Wilson Senior Publisher (416) 510-6800 steve@canadianunderwriter.ca

Christine Giovis Advertising Sales Representative (416) 510-5114 christine@canadianunderwriter.ca

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

Phyllis Wright Print Production Manager

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

Michael Chimienti Art Director mchimienti@bizinfogroup.ca

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

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

A bi-monthly magazine (6x per year), Claims Canada is published by BIG Magazines LP, a div. of Glacier BIG Holdings Company Ltd. Business Information Group is located at: 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 non-member independent claims adjusting firms; insurance and reinsurance company executive, claims management

8

mation. Currently, the individual can access a certificate with very limited information about the insurance.

• The regulatory process will be streamlined for hail insurers with the removal of the requirement to file hail insurance commission and premium rates.

In addition to the above and other legislative amendments, the government also announced changes to the regulations. Among them, the Fair Practices Amendment Regulation “includes new consumer protection provisions that will require insurance companies, their agents and adjusters to provide full and clear disclosure of dispute resolution processes and limitation periods to clients who have initiated insurance claims,” the province notes on the web site of its finance and enterprise department.

“The regulation includes the permitted exclusions that can be included in property insurance policy wordings to exclude coverage for damages caused by a fire.

“It also includes a provision permitting a person to apply to a court for an order for an advance payment on a personal injury claim being negotiated with an insurance company.”

A full list of legislative amendments and regulatory changes can be found at: http://www.finance.alberta.ca/publications/insurance/ alberta-insurance-act.html l

Claims Canada

p4,6,8 FIRST NOTICE.indd 8

August/September 2011

Gary White Production Manager (416) 510-6760

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

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

www.claimscanada.ca

04/08/11 11:00 AM

HASSLE FREE CLAIMS SERVICE LETS CUSTOMERS LOOK FORWARD, NOT BACK. When one of your customers makes a claim, RSA’s skilled team of professionals will get their life back on track promptly with our Hassle Free Claims Service.

RSA’s Hassle Free Claims Service provides customers with: • Fast track settlement for eligible property loss claims.

• $ 500 Service Guarantee: Calls returned on new claims within 6 hours or $500 paid to your customer, no questions asked.

• Free counseling from Graham Guidance Outreach to ease the emotional trauma a customer may experience after a car accident.

• Access to a live agent 24/7.

RSA provides the finest services and solutions to meet your customers’ insurance needs — and that includes our Hassle Free Claims Service.

For more information, visit www.rsabroker.ca

© 2011. RSA is a registered trade name of Royal & Sun Alliance Insurance Company of Canada. “RSA” and the RSA logo are trademarks used under licence from RSA Insurance Group plc.

RS 007 claims_ad_01.indd 1

1/26/11 6:09 PM

Docket #:

rs 007

Description of Ad: claims rsa Client: Contact: susan carswell

ad

Ad or Trim Size: 8.125 x 10.875” Bleed Size:

eMail: susan_carswell@yahoo.ca

8.375” x 11.125”

Publication: issue: DUE@PUB

Claims Canada february 2011 28 january 2011

FILE COLOURS: C

M

Y

K

Message from the President La Plume du Président MARY CHARMAN

This will be my final message as CIAA national president. The old adage is true: “Time flies when you are having fun.” I am amazed that my tour of presidency is almost at an end. However, I am extremely pleased with all that has been accomplished during my term.

Insurers let us know a core industry issue right now is catastrophe preparedness and CIAA has responded by providing instant access to CIAA professional members ready to respond to their emergency preparedness requirements.

CIAA’s National Insurance Industry Advisory Board (NIIAB) was created and our first meeting was held last December. It has flourished into an extremely valuable component of our organization’s development, where CIAA executive members, insurers and brokers come together to proactively address mutual issues of concern for the betterment of the industry.

Meeting many of our members at their regional events, seeing first-hand their executives at work and the accomplishments being made across the country and representing this great organization internationally has been a highlight for me.

All of our undertakings and developments cannot be accomplished without the hard work of the executive members and their dedication to CIAA. I applaud each and every one of them, and pledge my own ongoing commitment to continue giving back to an organi10 Claims Canada

p10,11 presidents message.indd 10

August/September 2011

Voici mon dernier message en tant que présidente nationale de l’ACEI. Il est bien vrai le vieil adage selon lequel «on ne voit pas le temps passer quand on s’amuse». Je m’étonne que mon passage à la présidence soit sur le point de prendre fin, mais, par ailleurs, je suis entièrement satisfaite du travail accompli pendant mon mandat.

Les assureurs nous disent qu’actuellement l’un des principaux problèmes de l’industrie est sa capacité de réaction rapide aux catastrophes. La réponse de l’ACEI a été de donner un accès immédiat à ses membres professionnels prêts à satisfaire à leurs exigences en matière de réaction rapide en cas d’urgence.

Le Conseil consultatif national de l’industrie de l’assurance de l’ACEI a été créé lors de la première réunion que nous avons tenue en décembre dernier.

Il constitue aujourd’hui un élément extrêmement précieux du développement de notre organisation, parce qu’il permet aux membres de l’exécutif de l’ACEI, aux assureurs et aux courtiers de se réunir et de discuter pro-activement de problèmes d’intérêt mutuel, afin d’apporter des améliorations à notre industrie.

Rencontrer un grand nombre de nos membres lors d’événements régionaux, voir à l’œuvre leurs exécutifs, me rendre compte des réalisations en cours à travers le pays et représenter, sur le plan international, cette formidable organisation, ont été pour moi les points culminants de mon mandat. www.claimscanada.ca

04/08/11 11:07 AM

zation that provides its members with so many advantages, opportunities and value added benefits.

I would once again like to thank our member firm proprietors, CEO’s, managers etc, for encouraging their staff to become involved, as their contribution is pivotal for our continued success.

I look forward to working with the incoming executive and offer them my wholehearted support!

I hope to see many of you at our annual conference in Muskoka in August! n

Sans la collaboration et le dévouement des membres de l’exécutif envers l’ACEI, aucune de nos initiatives et de nos innovations ne pourrait se matérialiser. Je félicite chacun d’eux et m’engage à continuer de m’impliquer dans cette organisation qui procure autant d’avantages, de possibilités et de bénéfices à ses membres.

J’aimerais de nouveau remercier les propriétaires, directeurs généraux, directeurs, etc. des sociétés membres qui encouragent leur personnel à s’investir dans l’ACEI, car leur contribution est le pivot de notre succès permanent.

J’envisage avec plaisir de travailler avec les futurs membres de l’exécutif et leur offre mon soutien indéfectible.

J’espère vous voir en grand nombre à notre conférence annuelle qui se tiendra à Muskoka au mois d’août! n Translation provided by Henry Arcache, Themis Translations, Montreal, Que.

NATIONAL EXECUTIVE 2010-2011 PRESIDENT Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca

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

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

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

2ND VICE-PRESIDENT Delores Thorbourne, BA, FCIP Granite Claims Solutions Suite 103 Greystone VII 4208 - 97 Street Edmonton, AB T6E 5Z9 Phone: (780) 442-3077 Fax: (780) 466-0325 E-mail: delores.thorbourne@mclarens.ca

www.claimscanada.ca

p10,11 presidents message.indd 11

PAST-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 E-mail: pkernaghan@kernaghan.com

EXECUTIVE DIRECTOR Patricia M. Battle Canadian Independent Adjusters’ Association/ L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Avenue West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca

DIRECTOR David Porter, LL.B., FCIP, CRM Advance Claims Service Ltd. 206 - 2323 Boundary Road Vancouver, BC V5M 4V8 Phone: (604) 642-0660 Fax: 1-888-452-5246 E-mail: davidp@advanceclaims.com

DIRECTOR James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca DIRECTOR John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@mclarens.ca

August/September 2011

Claims Canada 11

04/08/11 11:08 AM

CS

• cover story

HITTING THE ROAD

Continuing its commitment to be the premiere independent adjusting source for insurers, the Canadian Independent Adjusters’ Association has launched a catastrophe response resource. The association is also working on a new education program for independents, and continues to focus on pressing industry issues, such as adjuster health and safety.

BY LAURA KUPCIS

12 Claims Canada

p12-18 COVER STORY new!.indd 12

August/September 2011

www.claimscanada.ca

04/08/11 11:13 AM

I

nsurers looking to develop or augment their catastrophe response plan need look no further than the Canadian Independent Adjusters’ Association (CIAA).

Given the increased frequency of catastrophic events in Canada, planning has become a key issue within the industry. The CIAA has created a Catastrophic Response Resource as an answer to this industry issue. In the event of a catastrophe, insurers faced with an adjuster shortage will now have access to 28 CIAA member firms — and countless independent adjusters within those firms — across the country.

The catastrophe response plan is only one of many ways the CIAA is working to bolster its position in the industry as a go-to association for insurers. This continues to be an ongoing process, which began with a creative strategic plan during Patti Kernaghan’s tenure as national president in 2009. The new direction and focus of the association began with an in-depth survey to determine the industry’s opinions on independent adjusters and the CIAA. From there, the results of the survey were presented at an industry stakeholder meeting where the stakeholders made suggestions on where the CIAA should focus its energies. The key strategic priority was to differentiate CIAA members from other independent adjusters.

“The goal is for CIAA members to be recognized as the elite group of adjusters in the country because they adhere to stringent educational and ethical standards,” says Pat Battle, CIAA’s executive director. “The profile, as well as the recognition of the value and professionalism CIAA members provide their clients, will be elevated with increased marketing opportunities, using a variety of resources and forums.”

To achieve this goal, CIAA needed to determine which avenues to pursue first. At that time, Kernaghan, president of Kernaghan Adjusters, realized an advisory board was essential to enwww.claimscanada.ca

p12-18 COVER STORY new!.indd 13

sure the association continued on the right path going forward. Thus the National Insurance Industry Advisory Board (NIIAB) was created.

Joining the board The board is comprised of eight industry stakeholders, including claims managers and brokers. Eight independent adjusters, including the CIAA’s national executive, represent both small and large member firms. “We needed a fair and very diverse group of people,” says Mary Charman, president of the CIAA and branch manager with Crawford & Company (Canada) Inc. A key objective was to get industry leaders in the independent adjusting world, the brokerage community and at the company level to be a sounding board to the CIAA membership. They would provide counsel, direction and input into the initiatives of the CIAA, says John Sharoun, CEO of Crawford & Company (Canada) Inc. “I’m very pleased to be a part of (the board),” says David Porter, president of Advance Claims Service Ltd. and the national executive director representing small member firms.

“The challenge with CIAA is that, for too many years, we haven’t been providing enough value to our members.

That’s why our membership started to decline. The advisory board is a great idea, as was the strategic planning.

It started to develop a framework to move forward. What do we need to do? What are we not doing?”

When Kernaghan set out to create the industry stakeholder side of the board, she and the CIAA executive created a list of industry representatives from eight companies to sit on the committee. A second and third back-up list were also created, just in case. But “all eight [of the] companies [on the first list] agreed to come on to the board,” Kernaghan said. “It was a real testament to what we were trying to do — to bring together a group of claims professionals to address issues in the industry that affected independent adjusters and companies.”

Many industry representatives on the board joined without hesitation.

“We have a vested interest in having a good relationship and a good forum to working with the CIAA to find solutions to common problems or issues,” says board member Larry Lythgoe, Ontario regional claims director with RSA. “I joined because I believe strongly in the CIAA,” adds Bob Grouchy, assistant vice president and head of claims Canada at Allianz Global Corporate & Specialty Americas. “It is — or should be — the voice providing leadership for all independent adjusters in Canada. I believe it had lost its focus, so when Patti Kernaghan approached me to provide some ideas on how CIAA might re-tool and question its focus and become more important to its members, I was more than happy.”

For Justin MacGregor, past president of the Insurance Brokers Association of Canada, having a strong and healthy adjusting community, and a strong association, is beneficial to the broker community. “I think there’s a much stronger realization that they are part of a strong community, that they don’t stand on their own,” says MacGregor, executive vice president with Martin Merry & Reid Ltd. “First of all, they should be proud of what they do. Secondly, they’ve got strengths nobody really knows about. In many cases, even their own members don’t know about them.”

Prior to attending the first meeting in December 2010, board members were asked to submit three burning issues that would be used as a launch pad to determine the CIAA’s first priorities. The list of 21 issues was narrowed down to two issues in the board’s first meeting: catastrophe preparedness and education.

After discussing strategic direction around these issues over the course of the next three meetings, a CIAA working committee took those ideas and began to work on making them a reality. The objective was to arrive at solutions. The catastrophe response plan

August/September 2011

Claims Canada 13

04/08/11 11:13 AM

is hailed as a testament to the commitment of the independent adjusters — both member firms and those who sit on the board — and the industry representatives on the board.

Catastrophe preparedness The catastrophic response plan the CIAA established is two-fold. The first part, the Catastrophe Response Resource (CRR), was launched in May 2011. The second part, the mobility of labour in the event of a catastrophe, is currently in the works.

The CRR is a way for the CIAA to become a part of the insurer’s strategy for catastrophe preparedness, Kernaghan says. If an insurer does not have a plan in place — or the existing plan is not meeting the insurer’s needs during a catastrophe – they can count on the CIAA to send a call to its members for catastrophe adjusters. Insurers are able to visit the CIAA’s CRR site (www. ciaa-adjusters.ca/CIAACATResponse. aspx) and connect with a participating CIAA member firm. By contacting one of the participating firms, the insurer is guaranteed the member firm has at least five years of field experience handling property claims. Furthermore all member firms have either completed a scoping course, or have the required scoping expertise necessary to work in the field. Scoping is the creation of a document that highlights what needs to be repaired or replaced due to a loss.

All member firms have committed to being available at the drop of a hat in the event of a catastrophe. “Most independent adjusters are prepared to — or independent adjusting firms are geared to — do catastrophe claims,” Kernaghan says. “We act quickly to get to the site of the claim whether it’s in a catastrophe or not.”

The ability to call on a pool of independent adjusters during a catastrophe benefits insurers because they know they are getting knowledgeable, expert adjusters who are able to understand the loss, the needs of the insurer and go to a scene and handle the claim in a prompt and effective way, Grouchy says.

When it comes to catastrophes, the CIAA has a role to play in helping insurers and brokers identify and get in 14 Claims Canada

p12-18 COVER STORY new!.indd 14

contact with resources as quickly and as effectively as possible, MacGregor says. “The same resources won’t be able to respond every time, so I think it’s important to have that availability to communicate quickly and effectively with the resources that are available,” he adds.

Currently independent adjusters must be licensed within the province in which they handle claims. There has been slow, steady work towards the possibility of eventually harmonizing licensing. A more pressing issue at this

The CIAA is also seeking the CCIR’s support in working towards a licensing process that will allow for the seamless mobility of adjusters during a catastrophic event. time is the ability for adjusters to move among provinces in the event of a catastrophe.

Mobility is not just an adjuster issue.

This is not a matter of independents wanting to obtain business in other provinces, says Carol Jardine, senior vice president claims and administration services with TD Insurance. Insurers need adjusters during a catastrophe.

“When there is a need, we need to be able to provide them with the regulatory access they require,” she says.

August/September 2011

Insurance adjusters in British Columbia, Alberta and Saskatchewan fall under the New West Partnership Trade Agreement (formerly the Trade, Investment and Labour Mobility Agreement which included B.C. and Alberta). Under the NWPTA, all three provinces have agreed to mutually recognize occupational standards so that insurance adjusters, among other professionals, can work in their field in all three provinces, according to Canada’s New West Partnership website. “Professionals and skilled tradespersons certified in one province will be recognized as qualified in all three provinces,” the site says. “The benefit of the NWPTA is that workers will not need to go through material examinations or training to practice their chosen occupation.”

Quebec and France have reached a similar agreement. The Autorité des marches financiers (AMF) in Quebec and the Organisme pour le registre des intermédiaires en assurances in France have reached an agreement to facilitate the mobility of insurance professionals between Quebec and France.

The CIAA will soon be sending a letter to the Canadian Council of Insurance Regulators (CCIR) explaining the need for increased resources from across the country in the event of a catastrophe. Deploying adjusters quickly into a disaster area is critical for both the insurance industry and the public, the CIAA will argue. To help facilitate this process, the CIAA has designed a uniform licensing application procedure to accommodate the temporary influx of adjusters into a given province. This would streamline the procedure for both the regulator and the adjuster and allow the industry to immediately respond to the needs of the policyholder. “[Independent adjusters] want the ability, and the industry supports it, to move a number of adjusters from one jurisdiction to another in an efficient manner,” Lythgoe says.

The CIAA is seeking the CCIR’s support in working towards a licensing process that will allow for the seamless mobility of adjusters during a catastrophic event. www.claimscanada.ca

04/08/11 11:14 AM

Every file is different

From city to city, shore to shore – no two insurance claims and litigation files are ever the same.

In addition to natural case differences, regional rules and nuances often come to bear and shape outcomes.

ARC Group Canada is a national network of independent law firms providing legal and risk-related services to Canada’s insurance and risk management communities. Each member firm within ARC Group intimately understands and is connected with its local market – providing you with national expertise at a regional level.

Alexander Holburn Beaudin & Lang LLP Barry Spalding Burchells LLP Gasco Goodhue St-Germain LLP Hughes Amys LLP McLennan Ross LLP Martin Whalen Hennebury Stamp Robertson Stromberg Pedersen LLP European and International Affiliation: ARC Group Canada is proud to be formally associated with Insuralex Global Insurance Lawyers Group an international affiliation of independent law firms whose members provide high quality legal and risk related services to clients throughout and beyond Europe.

Telephone: 416-581-8082 Toll-Free: 1-866-981-8082 thearcgroup.ca

ARC GROUP NEW AD.indd 1

14/06/11 4:39 PM

The recent devastating fires in Slave Lake, Alta are a prime example of the benefit of allowing the seamless transition of adjusters from one jurisdiction to another. “I was planning . . . to send some of our people in to Slave Lake and (was preparing to deal) with the council and the licensing, and they actually loosened their restrictions,” says Delores Thorbourne, Edmonton branch manager with McLarens Canada and CIAA’s second vice president. The Alberta government, instead of worrying about who was licensed where, simply requested a list of adjusters who would be working in the area and welcomed the assistance. “It’s the first time that they have ever done that in my career, and I am 30 years in August,” Thorbourne says.

The board felt the CIAA would be able to help convince the superintendents of insurance in the different provinces of the need to allow adjusters from across the country to go into other provinces during a catastrophe to provide assistance, Grouchy says.

“We need a streamlined approach to allow insurers and brokers an opportunity to call on an adjuster who could go in to any place during a catastrophe and get expert service in a prompt, effective and knowledgeable way,” Grouchy says.

As it stands now, the CIAA has the support of a number of insurers and is working to garner more backing from the industry before heading to the CCIR over the next few weeks.

Education The advisory board found education was another high-priority issue.

“The whole premise is to try to put [adjusters] a step ahead because education is so important,” Thorbourne says. “Education is going to take you up a level.”

The Insurance Institute offers excellent educational programs for adjusters. But a void still exists when it comes to practical education. “CIAA’s objective in terms of education is not to be the educator in the industry,” Kernaghan says, noting the association does not want to — and frankly cannot — take the place of the Insurance Institute. “What we are doing is 16 Claims Canada

p12-18 COVER STORY new!.indd 16

The key is to offer education programs that address specific claims-related issues facing adjusters, but issues that are not necessarily addressed by existing formal education, Porter says. looking at the gap between what the Institute provides and technical requirements in the field. That is our educational focus.”

The ticket is to find a professional development program that not only educates current adjusters, but will attract future talent and allow for better succession planning. “[The CIAA’s] mandate on this one is a great one,” Lythgoe says. “Everyone has read the information on the demographics: we are losing people over time. We’ve got to find a way to attract new entrants to our profession and make sure they are trained well and perform at a really high standard.”

The key is to offer education programs that address specific claims-related issues facing adjusters, but issues that are not necessarily addressed by existing formal education, Porter says.

In the past, two-week intensive courses for adjusters or mentors were available within an office, Sharoun says. But these types of opportunities have eroded over time; they need to be replaced with new skills-based training, he says.

August/September 2011

This might include areas such as: • proper investigation techniques; • proper scoping; • measuring a room; • replacing materials in a home; • training for property claims negotiations; • proper statement taking; • rules of evidence; • privacy; • ethics; • customer service; • dealing with difficult clients; and • workplace safety.

“I would like to see a really robust talent pool of independent adjusters,” Lythgoe says. “I believe the steps they are taking, particularly around this professional development, is really key.”

The gap analysis has been completed. The education committee is now looking into the best and most professional way to provide the product, Charman says.

All of the education must be easily accessible to all members across the country. This is a challenge, given Canada’s vast geography. Technolwww.claimscanada.ca

04/08/11 11:14 AM

ogy, of course, will make this easier.

Attendees no longer have to be at a seminar in person. Education can now be done through distance learning, by means of webinars or live video feeds.

This can be combined with local classes to round out the information. The CIAA is currently investigating all of these methods to determine its most appropriate course of action.

The education issue, like the catastrophe planning issue, is two-fold.

The CIAA currently has a number of designations, including the Chartered Loss Adjuster (CLA) designation. However, during the CSP process, it became evident the CLA designation is not well-known and under-appreciated. It wasn’t clear to people surveyed just how difficult it was to obtain.

The CIAA will eventually look into potentially tying in a new designation.

“We need the education program finalized and then we are going to work on whether it’s a designation program or not,” Charman says.

Mom, I am going to play in the pool in the basement?

Porter, who is spearheading the educational component, says his vision is to put together a 10-course offering. Perhaps six courses would lead to a designation for CIAA members.

However, a lot of things still need to be worked out before a formalized education program, and subsequent designation program, is launched.

Health and safety While catastrophe preparedness and education were at the forefront for the CIAA and the advisory board, a new issue has developed: workplace health and safety. This is a huge issue that few of the stakeholders at the table were aware of, Charman says.

Most occupational health and safety legislation in Canada requires that someone be in charge at the site, says Greg Merrithew, president of Arctic West Adjusters and CIAA’s first vice president. Typically it is the owner of the building, but in most legislation it also falls to the agent of the owner. A number of jurisdictions have identi-

fied the adjuster as the de facto agent of the owner, because they are on site controlling the actions after the loss occurs. “The challenge for that is if something goes wrong . . . and they want to find somebody or put somebody on notice, it is turning out to be the adjuster. And not just the independent adjuster, but a staff adjuster,” Merrithew says.

Merrithew will conduct further research with respect to an adjuster’s role in the Health and Safety Act. “One of the keys to measuring value is that I have actually learned things at the meetings,” MacGregor says. The issue surrounding the responsibility of the adjuster out on the field with respect to health and safety was a new one for him — and one that can affect the broker community, as well. If, at some point down the road, these regulations have an impact on the cost of service delivered, it will have an impact on the cost of insurance policies, which is extremely relevant

CAPTION CONTEST Congratulations to our winner:

Nella Piazza

of PD Admin Group.

Thank you for all of your submissions.

Watch for next issue’s contest Debby Matz

Winmar the full service restoration specialists with service locations across Canada Toll Free: 1-866-4-WINMAR (494-6627) • www.winmar.ca

www.claimscanada.ca

p12-18 COVER STORY new!.indd 17

August/September 2011

Claims Canada 17

04/08/11 11:14 AM

to an insurance broker. “It’s important to brokers that they understand the varying influencing factors in our communities on insurers and pricing of product,” MacGregor says. If an adjuster has to suddenly be kitted out with even more safety equipment that could not only affect the cost, but could slow down the response process — all of which brokers need to be aware of. “That, in itself, indicates the synergies between different associations and the need to actually be able to talk to each other.”

Future of the board The ultimate goal of the board is to better the industry. This board has taken advantage of the opportunity to bring together members within the industry who might not have otherwise connected at the round table, Charman says. “Every time I leave the room, I feel something has been accomplished,” Charman says. “The relationship, the rapport that we are building with these insurers is priceless.”

The advisory board has given the CIAA a much more confident voice as an association, MacGregor says. “It’s helped them strengthen their beliefs and core mission and how they structure themselves to deliver services to their members and what their members are likely to be interested in and react to,” he says. “Certainly looking from the

While catastrophe preparedness and education were at the forefront for the CIAA and the advisory board, a new issue has developed: workplace health and safety. outside in, I’ve seen a change and it’s been very positive.”

It is important that as an association, the CIAA has the opportunity to discuss with stakeholders what it is doing and where it is going. For the advisory board,

it is equally important for the CIAA to know where the industry sees the association going and what role independent adjusters will continue to play. “They are the ones that can see the broad picture out there,” says Merrithew. “Sometimes we [as adjusters] lose focus as a group of individuals in one profession.

We get so bogged down with the day-today operations of our business and our association that we forget to step back, as we did with the strategic plan, and have a look at the big picture across the nation and identify those areas in which we should be providing additional services to our members.”

Independent adjusters are an integral part of the business, Lythgoe says.

“Having a board such as this to shape how things work in the future is very beneficial. …Through this process, the CIAA can differentiate itself. You will know that if you are dealing with a CIAA member, you will get a high level of expertise, ethics and efficiency. That’s a good thing for them to be working towards.” 

Members of the CIAA’s National Insurance Industry Advisory Board Delores Thorbourne, CIAA second vice president, branch manager with Granite Claims Solutions

John Sharoun, president & CEO of Crawford & Company (Canada) Inc.

Dennis Schembri, managing director of Granite Claims Solutions

Back row l-r: Jo-Ann Eccleston, Canadian Insurance Claims Managers’ Association’s Ontario chapter president, AVP of customer claims relationship with Aviva Canada; Bob Grouchy, assistant vice president and head of claims Canada at Allianz Global Corporate & Specialty Americas; Greg Merrithew, CIAA first vice president, president of Arctic West Adjusters Ltd.; Mark Weir, director of claims process with Intact Financial Corporation; David Porter, CIAA director, president of Advance Claims Service Ltd.; Justin MacGregor, past president and chair of the board of the Insurance Brokers Association of Canada, executive vice president with Martin Merry & Reid Ltd; Patricia Battle, CIAA executive director; Peggy Wong, director of claims services with The Economical Insurance Group.

Seated: Patti Kernaghan, chair and CIAA immediate past president, president of Kernaghan Adjusters Limited; Mary Charman, CIAA national president, branch manager with Crawford & Company (Canada) Inc. 18 Claims Canada

p12-18 COVER STORY new!.indd 18

August/September 2011

Carol Jardine, senior vice president claims and administration services with TD Insurance

Glenn Martin, senior vice president of strategy and shared services with Aviva Canada.

Absent: Larry Lythgoe, Ontario regional claims director with RSA. www.claimscanada.ca

04/08/11 11:15 AM

CRDN

Absolutely worth the call.

CRDN proudly supports environmentally conscious processes that achieve significant reduction to water, energy and landfills. You and your homeowners deserve a professional Textile Specialist on your team!

Calling a CRDN Textile Restoration Specialist will: F Reduce Severity - Ability to restore 100% of all soft textiles found in homes today - CRDN Restoration vs. Replacement is an 80% savings - 100% Guaranteed – If it doesn’t restore – it’s free!

F REDUCE A.L.E. - 48 hour “Rush” service F IMPROVE CUSTOMER SATISFACTION - Fast response and highly professional service with a caring attitude

CRDN Certified Restoration Drycleaning Network

1-866-897-CRDN (1-866-897-2736) www.CRDN.ca

• spotlight S

On the Rise

As incoming president of the Canadian Independent Adjusters’ Association, Greg Merrithew intends to increase the profile and value of the association

BY LAURA KUPCIS

A

n association is only as strong as its members. Knowing this, Greg Merrithew is committed to working towards increasing the Canadian Independent Adjusters’ Association’s (CIAA) membership by five per cent. As the incoming CIAA president for the 2011-2012 year, Merrithew would like to increase the current member firm count from 125 to 132.

“Membership growth is important for any organization,” he says. “You are either growing or you are declining. It’s pretty rare for any organization to stay static.”

“If I can achieve a five per cent growth of membership firms, I will consider that to be a success in my term,” he adds.

Ideally, Merrithew would also like to see more than 50 per cent of the licensed independent adjusters in Canada be members of the CIAA. “If I could get the actual numbers of CIAA members to be 50 per cent or more of the actual licensed adjusters in Canada, I would definitely consider that a success,” he points out. In order to be a CIAA member, an individual must be employed with a company that has chosen to be a CIAA member firm.

Aware that most mail-outs, handouts and e-blasts soliciting for new members often go unread, Merrithew will be employing the more effective in-person tactic. As president of the CIAA, Merrithew will be racking up the Air Miles attending a number of seminars and conferences across the country. During these visits to different cities and towns, he will be meeting with the proprietors of as many non-member firms as he possibly can.

20 Claims Canada

p20,21 SPOTLIGHT.indd 20

Benefits of membership Having been a CIAA member for much of his 31-year independent adjusting career, Merrithew has firsthand knowledge of the benefits of being a member. His initial reason for joining was simply to connect with other independent adjusters on a social and professional level. Being an independent adjuster in the Northwest Territories, Merrithew did not have a lot of contact with others in the field.

Being a member afforded him the opportunity to attend seminars, meetings and conferences where he would not only meet colleagues — which he says is extremely important — but would be educated about new developments in the industry as well. The opportunity to send his staff for further education through seminars is paramount, he says.

Furthermore, the opportunity to cost effectively obtain errors and omissions insurance for his adjusting firm is worth the price of membership alone. “If anybody said to me, ‘Give me a reason why financially this organization is important to me as a member,’ you can’t beat our E&O program,” he says. “What it costs me for membership plus premium is less than the quotes that I was getting to just go out and get stand-alone E&O insurance.”

The road to president Merrithew started his path to presidency as vice president of the Western Region in 2005. The region had been one of the strongest through the late 1980s and early 1990s, but by the early 2000s, the region had started lagging behind the rest. Even the annual joint

August/September 2011

conference with the Canadian Insurance Claims Managers’ Association had been cancelled. Membership had started to fall off, likely due to a perceived lack of benefits in the region.

Committed to resurrecting the region to its previous glory, Merrithew stepped up as vice president. From there, he assumed the role of president.

During that time, the CIAA/CICMA joint seminar was resurrected and new opportunities were created within the area, seeing an increase in membership once again.

From there, Merrithew was asked to stand for second vice president of the national executive, before becoming first vice president. In his role as second vice president, he would oversee all the internal committees that are under the auspice of the CIAA. As first vice president, his role was to look outward, focusing on external issues affecting or concerning the CIAA. His name is currently up for election for president, a role he will assume at the CIAA’s Annual General Meeting in Muskoka at the end of August — provided nobody makes a last minute pitch to run against him, he laughs.

Creative strategic plan As president, in addition to boosting the membership of the association, Merrithew will continue to work on the strategic plan that was launched by the CIAA in 2009. When the creative strategic plan (CSP) was launched, it was clear the mandate would take at least three to five years to implement.

“We are still on track to do that,” he says. “That is still my main focus in my year as president.” During his tenwww.claimscanada.ca

04/08/11 11:37 AM

“My goal is to ensure that the word gets out to member firms and individual members,” Merrithew says. “Look after your health, look after yourself, be safe.”

ure, he will focus on the educational portion of the CSP — a mandate to improve the availability of hands-on training for adjusters with the possibility of a designation for CIAA members.

Branding is also a huge issue for the CIAA. A survey conducted as part of the CSP showed that there was a lack of understanding or knowledge of the CIAA and what sets its members apart. Furthermore, the designations obtained by members, which are very difficult to achieve, were not well understood by the industry at large, Merrithew says. Once the educational component has been settled, and a designation program launched, Merrithew will focus on ensuring the industry is aware of member designations and what they entail. www.claimscanada.ca

p20,21 SPOTLIGHT.indd 21

Regional focus Using his experience as regional president, Merrithew will also focus more heavily on the various regions across the country. In the past, the regions have worked somewhat independently without much input from the national executive. Going forward, Merrithew will be more directly involved with the regions, assisting the regions wherever possible.

As part of his regional work, Merrithew will be focusing on the Provincial Disaster Assistance Plans within the regions. This relationship between independent adjusters and the provincial Emergency Measures Offices is quite solid in the eastern provinces and in Manitoba. Merrithew would like to see this trend carried across the

country. In the case of a non-insured event, the independent adjuster is available to help the provincial government handle claims from the public.

“These are ongoing issues that I am not initiating,” Merrithew says. “They are in the works already, so it is a continuing on of our process.”

Health and safety Finally, Merrithew will be working to improve the safety of independent adjusters in the field. The health and safety of his staff is paramount to anything else.

“My goal is to ensure that the word gets out to member firms and individual members,” Merrithew says. “Look after your health, look after yourself, be safe.” 

August/September 2011

Claims Canada 21

04/08/11 11:37 AM

Falling Under

While more than 50 per cent of all claims in Ontario are currently falling under the MIG, this could have serious cost ramifications in future if case law does not favour insurers who are applying the MIG prior to the renewal date.

BY LAURA KUPCIS

P

reliminary surveys are showing that greater than 50 per cent of all claims, post-September 1, 2010, are currently falling under the Minor Injury Guideline (MIG), advised Kadey B.J. Schultz, partner with Hughes Amy LLP. Companies with preferred vendors are seeing even higher numbers of initial claims going into the MIG than those without preferred vendors. But in both instances more than half of all claims are falling within the MIG, she added while speaking at a seminar hosted by the Canadian Independent Adjusters' Association's Ontario Chapter in Toronto on May 13.

The stats While this is not far off from the 55-65 per cent figure originally advised by the Financial Services Commission of Ontario (FSCO), Schultz warns the issue is not how many fall into the MIG at the outset, but how many stay in the MIG, which will only be borne out by time and the development of case law.

And this will remain to be seen for some time yet, as applications for mediation at FSCO have jumped a staggering amount with over 28,000 files at present, and more than a nine-month delay in FSCO's acknowledgement and processing of the first stage of the dispute resolution process.

“We are starting to see disputes emerge for claims that are being put in the MIG, but we won’t see any case law for many months if not years,” Schultz added.

Ultimately, even when the decisions from FSCO start to come in, the data surrounding the MIG will not be complete, she added.

Settlements of cases where the insurer has paid more than the $3,500 hard cap for minor injury claims are unlikely to be accurately reflected within the statistics, Schultz said.

The issue Statistics aside, the case law coming out of FSCO in a few years could have alarming financial consequences for insur22 Claims Canada

p22-23 CIAA Ontario.indd 22

August/September 2011

ance companies depending on how they handled the minor injury definition and applied the MIG. “Insurers are handling the minor injury definition and the minor injury guideline differently” Schultz said.

Ontario Regulation 35/10 are the transitional rules with respect to the new Statutory Accident Benefits Schedule (SABS). In the normal course, while procedural changes can apply immediately, substantive changes to benefits are not to be applied until a policy has renewed. There is a lack of consensus as to whether the MIG would be considered a substantive or procedural change in benefits, with a claimant falling under a $3,500 hard cap versus the previous $100,000 med-rehab limit or process and benefit limits provided by the PAF, she notes.

The Financial Services Commission of Ontario (FSCO), has issued two bulletins, both stating the MIG applies regardless of the renewal date. A bulletin, however, Schultz points out, is not law. Many in the industry that she has spoken to, however, are applying the MIG immediately.

With that in mind, she cautions that in a few years when all the applications for mediation have been processed through FSCO and become arbitration or litigation files, this may become a very live issue for insurers. “It will only take one decision in favour of claimant that the MIG could not be applied until the policy had renewed for all insurers to have to roll back and reconsider claims from Sept. 1, 2010 on,” Schultz says.

While it would be easier if all insurers were doing the same thing, and applying the MIG regardless of the renewal date, at least to have consistency and to show reliance on FSCO's guidance through its bulletins, Schultz says this is not the case.

In the end Schultz foresees that in a few years, depending on the delay in getting matters through to the FSCO arbitration or litigation state, this issue will be clarified. Much like with the consequences of the Supreme Court of Canada’s www.claimscanada.ca

04/08/11 11:42 AM

decision in Smith v. Co-operators, which resulted in insur- claims pending the development of case law to guide iners having to review settlements and re-adjust or re-settle surers in their practices” Schultz adds. “We are not going closed files, in the event the case law shows the benefit to have a decision on it for a long time. By then there are so many other issues that could have excap of $3,500 under the MIG was not to acerbated the problem. Whether it’s the be applied until a policy had renewed, lack of provision of rehabilitation and the industry may have to have to go back Statistics aside, the medical benefits to the person with a rethrough a large stack of files. “What will case law coming out sulting regression or worsened in their that really mean?” she asks. “It will mean of FSCO in a few years condition when they would have had settle settle settle.”

To top it all off will be the arguments could have alarming an opportunity to improve; the interest payable on benefits found to be outfrom the paralegals or lawyers that the claimant was placed in the MIG despite financial consequences standing; a special awards claim on the all the reasons provided that they should for insurance companies interest and on the outstanding benefits, or the cross-over of heightened exposure not be. First, is that the policy had not yet depending on how to the tort defendant for increased damrenewed. Second, the claimant had preexisting conditions that proved the claim- they handled the minor ages where the AB insurer has not paid ant should not be limited to the confines benefits.” injury definition and of the $3,500 hard cap.

“What we know for sure,” Schultz applied the MIG. concludes, “is that the next several years “Then we go to the development of are going to be conflict ridden. With case law in the last year, particularly on public perception and the plaintiff bar the issue of special awards,” Schultz says.

“The issue of putting the wrong files into the MIG because arguing that the September 1, 2010 changes are a reduction of the renewal date, pre-existing complaints or the na- in benefits, a dis-enfranchisement if you will, there exists a ture and extent of the injuries complained of as a result very political (and financial) interest from the plaintiff bar of the accident is going to be explosive, in my respectful in aggressively challenging the new SABS, starting with the opinion, and requires insurers to strategically adjust new application of the MIG.” 

Guiding you through

www.claimscanada.ca

p22-23 CIAA Ontario.indd 23

August/September 2011

Claims Canada 23

05/08/11 8:49 AM

A Call to Duty An independent adjuster’s first-hand account of handling claims in Slave Lake, Alberta

BY SEAN M. DOUGLAS

The unthinkable had happened. A catastrophic forest fire in northern Alberta had devastated a small town. The residents of Slave Lake, Alta were displaced, the town torn apart by forest fire. In the initial hours after the evacuation, I had a sense of responsibility and duty.

For years I had been training and mentoring younger, junior adjusters and it was time for the “mentor” to roll up his sleeves, and practice what had been preached.

CAT 47, as it was now called, would prove to be an important chapter in my insurance career, serving as a reference point going forward and lesson in humility and humanity.

It had been several years since I had experienced any “CAT” work. In my early years as a junior adjuster and staff adjuster this was common work, having attended to Southern Manitoba flooding, several hail storms in Calgary and Edmonton and, most recently, the flooding in the Fraser Valley.

There was some limited exposure to the forest fires in Kelowna, BC, though that was several years ago. It would be these life experiences that would provide direction and confidence.

Within several days of the fire event, a considerable number of partial and total losses were beginning to be reported.

After agreeing to go to Slave Lake to help with the claims process, there were both personal and professional 24 Claims Canada

p24, 26-28 CRAWFORD.indd 24

details I needed to work through.

First, my family. I would be called to Slave Lake for a considerable period of time. Initially, it was only two weeks.

However, many trips over a period of one to two years are anticipated.

As a manager of a smaller branch, arrangements also had to be made with my local clients and staff to handle the daily workflow of my day-today claims.

A wonderful staff of managers, adjusters and support staff greeted me in Slave Lake at one of the larger, local hotels. All of them had arrived several days earlier and had done the arduous task of finding accommodations and offices. They had set up the computers, infrastructure and equipment we would need to be efficient. They had also begun setting up claims files and contacting policyholders.

Peter Karges, our national manager, had the overwhelming responsibility of managing the office and organizing and directing the staff as we all arrived from every corner of the country. Countless hours, many late in the

August/September 2011

evening, were spent working to this project was successful; that our commitment to our client and to the policyholders was met. I must congratulate both Peter and Walter Waugh, our vice president of operations (Western Canada), on this exceptional success.

The purpose of an adjuster is sometimes blurred in the competitive insurance industry. Fundamentally, we help people. This is why most of us in the claims industry do what we do. It is this overtone that drove me day in and day out while in Slave Lake. It was what gave all of us the energy and the determination to work late into the night, rising again in the early morning hours to continue on.

The internal pressures, attempting to deliver this to the devastated residents saw all of us at Crawford work without complaint late into the night and rose early in the morning to continue our endeavor to do all we could.

Much has to be said, and many praises to be made, for the emergency response personnel in Slave Lake.

Without their efforts, quite possibly, www.claimscanada.ca

04/08/11 11:45 AM

Property Damage Cost Control Consultants Providing Innovative Solutions to Control Property Claim Costs

National Coverage • Expertise • Consistency • Results DETAILED VALUATIONS LARGE LOSS SPECIALISTS LIABILITY SPECIFICATION & ACTUAL CASH VALUE (ACV) VALUATIONS INSURANCE TO VALUE APPRAISALS SPECIFICATION AND BID DOCUMENTS PROJECT CONSULTING & REVIEW CATASTROPHE VALUATION PROGRAMS CONFLICT RESOLUTION FILE AUDITS & REVIEWS APPRAISALS UNDER THE INSURANCE ACT Contact us today to further discover why we are acknowledged as Canada’s leading, independent property loss valuation and cost control professionals!

TOLL FREE: 1-877-907-7327 ext. 25 • eMail: info@specs.ca • www.specs.ca SPECS-MC7643-CC FINAL!1.indd 1

17/02/11 11:33 AM

there wouldn’t have been a town left.

The forest fires raged through the center of this small, northern Alberta town and their amazing efforts must not be overlooked.

Our team Greg Thierman, Kelowna, B.C. branch, Michelle Bradford, Edmonton office, and I were given the duty and responsibility of handling the residential total losses in Slave Lake for our client. Greg himself had experienced the Kelowna fires, and was a great source of reference and support for us all. Melanie Bean of Vancouver, Neil Hagerty of Red Deer and Ariff Mawji of Toronto rounded out our adjusting troops in Slave Lake. We were also supported by a team of quantifiers who dealt strictly with premises while we focused on policyholders. Peter Singh from our IT department was sent to Slave Lake to get our remote office up and running. It was a total team effort.

Other adjusters from our Edmonton office were also involved in the response, acting for numerous other

clients, insurers and third party accounts. Len Raymond of our global technical services (GTS) group in Edmonton handled the Slave Lake Hospital claim. This was one of the first reported — and extremely important — as the hospital was considered vital infrastructure and had to be operational before the residents of Slave Lake were allowed to return home.

Bruce Sunderland, GTS in Calgary, was also involved in commercial claims for several control accounts.

After arriving and settling into my home away from home in Slave Lake, I anticipated the morning’s first appointment and prepared for it. I wanted to ensure these appointments were sincere and empathetic, and as purposeful as possible.

Our days were filled with appointments from early morning to late evening, all in efforts to see the unfortunate victims’ of Canada’s largest forest fire event as soon as possible. We wanted to convey to them that not only was their insurer prepared to fast track the claims procedures for them, but to

also reassure them that I would do my very best for them and would be there for them through the claims process.

I’ll never forget my first visit to the fire area. Due to the extensive damage caused along the eastern area of the town, the entire neighborhood had temporary fencing erected along the perimeter. Entrance was strictly limited and guarded by “Commissionaires.” Signed waivers were required for entrance, and in the first few days there was concern about air and soil quality.

As I entered the gate on Parkdale Avenue the scene around me was that out of a horror movie. In my 22 years of handling fire losses and large claims, never before had I imagined the site that was before me. It was as if a bomb had gone off in the middle of this unassuming town. For blocks, all that was left were empty foundations, ash and burnt remains of what used to be expensive cars and trucks.

The civic authorities had the impossible task of sorting through the debris looking for bodies. Every foun-

A large loss

26 Claims Canada

p24, 26-28 CRAWFORD.indd 26

August/September 2011

www.claimscanada.ca

04/08/11 11:45 AM

r

s

dation and building site was nearly empty. It was such a strange sight to see empty foundation after empty foundation. This was all that was left, but that would be the first step towards rebuilding the homes of the town. Simple foundation measurements and a few photos would begin the process of renewal. That goal was accomplished with the assistance of many.

Slave Lake reminded me of Fort Frances, Ont. where I grew up and so I found myself “at home” while in Slave Lake. This helped with some of the loneliness and stresses we all found in our day-to-day activities while there.

The people in Slave Lake were remarkable, resilient, hard working and ready to rebuild their town and lives.

From the first meeting to the last, I found everybody to be willing to do what they had to do. I felt an unbelievable sense of pride at being involved in the rebuild. The radio advertisements reminded everybody of the independent nature of the townspeople and that they would rebuild and be stronger than ever. At stop signs up

and down the Main street, young children had colored signs thanking the emergency response teams and all that pitched in to save their the Town. It was these little reminders that pressed us all into action and gave me a sense of pride. I knew the personal and professional sacrifices we all were making, were appreciated.

Our client had arranged immediate emergency claim advances. The efficiency in which this had been agreed to, and arranged was considerable.

The insureds noticed. The funds were much needed and truly appreciated by all who received them. What was first thought to be an emergency-evacuation type of claim(s) turned out to be full scale catastrophe, in varying degrees of devastation.

The pressing issues at hand proved to be accommodations and emergency funds. We would also listen to the many stories shared by all. In a town of 6,700 people1, semi-permanent housing was and still is the biggest issue we faced. There are many questions still unanswered. My goal prior to leav-

ing the area after my first trip to Slave Lake would to be sure all of my claims had housing arrangements, funds, understood the process and were realistic in their expectations. Not only with respect to what I could do for them, but how the policy should respond and the time frames in which we could actually clean up and start construction.

This promise was kept. I will continue to keep the focus of these claims in my thoughts, as we move forward to work through the many hurdles and issues regarding Slave Lake.

I have handled hundreds, if not thousands of fire claims since my first year as an adjuster in 1989. These fire claims were different. They required special attention due to the sensitive nature of what had happened to the town. There had been 3722 destroyed houses in the town, as well as several businesses, the Municipal Hall and dozens of others in the outlaying areas.

The Town of Slave Lake has been working closely with the various insurers, as well as the Insurance Bureau of Canada. The fire ravaged areas had

requires a large response.

The Commercial Division from FirstOnSite – the largest independent disaster recovery company in Canada.

Our dedicated team has been serving the disaster needs of commercial clients and specialty markets nationwide for over 30 years. With more than 1,100 well-trained employees, the largest inventory of state-of-the-art equipment in the country and our proprietary tracking and billing system, we’re ready to mobilize at a moment’s notice. Headed by Barry J. Ross, a leading specialist in disaster recovery, our business is getting you back in business. Call Barry at 416-586-3532 or email bjross@firstonsite.ca for more information.

www.claimscanada.ca

p24, 26-28 CRAWFORD.indd 27

August/September 2011

Claims Canada 27

04/08/11 11:45 AM

been organized into “zones” which would dictate the commencement of any demolition and also dictate reconstruction. To date, reconstruction has not begun. It’s quite likely that rebuild will take up to 24 months given the supply and demand for contractors, labour force and construction materials. This then triggers the question of the “same site restriction” on the insurance policy.

With a community north of the 55th parallel, a building season is five to six months, with winters being cold, windy and unpredictable. As we creep into the summer months, and the reality that any reconstruction may not start until early fall, it is hoped that a few foundations can be poured. This will allow at least a few homes to be 28 Claims Canada

p24, 26-28 CRAWFORD.indd 28

It’s quite likely that rebuild will take up to

24 months

given the supply and demand for contractors, labour force and construction materials. framed throughout winter, and resume removing basement foundations and carrying on with construction in early 2012.

A return trip is being planned soon to Slave Lake and I’m confident the people will have a renewed energy with the developments and progress made in the weeks since my departure. The

August/September 2011

attitude of the area is that “we will rebuild” and we will.

Slave Lake will return as a gem in northern Alberta, and the insurance and construction industry will play a crucial role in that renewal. We must never lose sight of the fact that insurance adjusters exist to help people and work closely with them in their time of need. This basic principle taught to me so many years ago, will keep me going until this project and CAT realizes its completion.  Sean M. Douglas is a managing professional and senior adjuster with Crawford and Company (Canada) Inc. 1. StatsCan 2006 community profile 2. Town of Slave Lake recovery news

www.claimscanada.ca

04/08/11 11:46 AM

Benefits

Best practices for adjusting an Income Replacement Benefits claim

BY LAURA KUPCIS

W

hen adjusting an Income Replacement Benefit (IRB) claim, there are a number of ways to validate financial information and assess a claimant’s employment status on the date of loss.

When an OCF-1 (Application for Accident Benefits) and OCF-2 (Employer’s Confirmation Form) come in, look first at whether the claimant considers themselves an employee, selfemployed or perhaps both, suggests Tony Militello, a principal at H&A Forensic Accounting. This information can be found in part 5: applicant status of the OCF-1, he said.

Militello was speaking at the firm’s 15th annual Toronto AB Conference on Apr. 14.

From there, he suggests starting on page 2 of the OCF-2 — employment details and employer information — and working your way backwards; analyze the employment information first and work your way to employment income, Militello says. When reviewing the information, did the person provide any information with respect to self-employment in part 4?

If not, then they consider themselves to be an employee of a company and not self-employed. Then move on to the weekly income: Does the weekly average for the four-week period make sense? Compare that to the 52week period: Is it consistent with the average from the four-week period?

From there, consider if there are any employer-paid benefits. This can be found in the OCF-2 on page 2, part 5: other benefits. Did the employer check off yes or no for any of the available www.claimscanada.ca

p29 H&A.indd 29

benefits. If benefits are paid it will increase the pre-accident income, Militello says.

Employer paid benefits include: • employer premiums for medical, dental, life and disability • employer pension contributions The employer portion of Canada Pension Plan contributions, Employment Insurance premiums and Workplace Safety and Insurance Board premiums are not considered employer-paid benefits, Militello says.

There are certain situations where employer-paid benefits should be included and other situations when they can be excluded. If there are no interruptions — the claimant is receiving the same benefits both pre- and postaccident — then they do not need to be included in the calculation. It is not going to affect the IRB calculation, Militello notes.

If they cease or change subsequent to the accident, then an adjuster will need to obtain the relevant information from the employer.

He cautions that there are two instances where these benefits should always be included: 1. In the event of a catastrophic case where the adjuster recognizes that down the line the benefits may cease or be reduced. It is always easier to obtain the information at the beginning of a claim than it is to try and find it five or six years down the road.

2. In the event of an unemployed claimant. Here, a 52-week calculation would be done, and during that 52 weeks they were employed by a company who provided them with

employer paid benefits. When included, the claimant’s pre-accident income increases, but it will have no impact post-accident because they were unemployed at the time of the loss.

Employer-paid benefits are not taxable under either the old Statutory Accident Benefits Schedule (SABS) or the new one, Militello says.

If the OCF-2 does not make any sense, the best option is to call the employer to determine why. The form is not always accurate or complete, but the employer might be able to clarify the mix-up in person or over the phone. The form does not, however, normally include vacation pay, nor does it provide the adjuster with any information surrounding bonuses, commission or profit sharing.

When speaking with the employer, Militello suggests requesting the following information: • Payroll records from the first year prior to the accident; this will help calculate the four and 52-week pay period • T4 slip, which can be used to verify the information on the payroll records • Record of employment • STD/LTD information From the claimant, Militello suggests asking for the following: • OCF-13 (Declaration of Post Accident Income and Benefits • Personal income tax returns • EI benefit statements for a 52-week period • Post earnings, payroll records • STD/LTD information 

August/September 2011

Claims Canada 29

04/08/11 11:56 AM

BY MATTHEW ALLEN

One of the most challenging types of damages in fire claims arises out of the soot residue produced by the fire. Soot is essentially made up of very fine black particles composed primarily of carbon, which is created through the incomplete combustion of the fire’s fuel (e.g. wood, plastic, etc.). Fire damage residues also contain many other incomplete combustion products that are contained within the generated smoke, including harmful chemicals, carcinogens and toxins. In controlled industrial processes, it is possible for combustion to occur very efficiently, thereby producing very small quantities of soot. In a typical structure fire, the opposite is true and soot can be a major problem.

Concerns raised over residual soot and the related odours on contents, building materials, etc. following completion of property restoration can result in costly recleaning and assessment – underlining the importance of investigating and addressing soot contamination correctly in the first place.

The basics Let’s review the basics: fires generate heat and light energy. The heat 30 Claims Canada

p30-31 GIFFIN.indd 30

causes the air around the fire to expand. When this occurs in an enclosed space, such as a house, the expanding air pressurizes the space. This results in hot air being forced throughout the house, as it seeks to equilibrate the pressure in the house. Unfortunately, the hot air also contains the products of combustion – the soot. Hence, wherever the hot air can goes, the soot will too.

Assessment When performing an assessment of soot damage in a structure after a fire loss or restoration, one must carefully consider where the hot air could have travelled to during the fire. This requires not only knowledge of the physics of a fire but an intimate knowledge of building construction and materials. It is insufficient to simply look for the soot in all the easily visible spaces.

Pressurized air can easily penetrate the many openings, voids, cracks, gaps, etc. that are typically present in a house. Pot lights, receptacles, cold air returns, heat registers, gaps at pipe and wiring penetrations, ducts and utility chases all present locations where soot could be present. After all, absence of evidence is not evidence of absence.

One must also have a logical and

August/September 2011

rational sampling process. It is easy to look for soot in all the places where one would not expect to see it, if one is trying to downplay the effects of the fire.

Unfortunately, we have seen this tactic employed all too often, where the investigator hired by one insurer tries to minimize the damage that they are responsible for. In our experience that inevitably comes back to bite someone, usually the insurer. Accordingly, when determining where to take samples, one must consider the location of the fire and all aspects of the structure, which could affect air movement within it. For example, an attic fire is unlikely to result in soot in the basement. Similarly, factors such as whether or not the furnace fan was running, whether or not windows and doors were open, the intensity and direction of wind on the day of the fire, how quickly the fire department responded and use of emergency ventilation are amongst the many factors that should be considered by the investigator.

When actually analyzing samples that have been removed from the appropriate locations, what should the investigator look for? There are two basic methodologies employed: Does the suspect material have the appearance of soot when viewed under a microwww.claimscanada.ca

04/08/11 11:59 AM

www.claimscanada.ca

p30-31 GIFFIN.indd 31

ered, otherwise the efforts (and costs) may be wasted or misleading. In most cases, a simple, microscopic examination of suspect material should be able to establish whether or not the material was in fact soot, or just dirt. A bit of straight-forward environmental engineering can go a long way to simplify a potentially costly claims problem.  Matthew Allen is a principal of Giffin Koerth Forensic’s environmental, health & safety practice.

HEAD OFFICE Paul Davis Systems Canada · 416-299-8890 OntArIO PDS of renfrew County SPD Laurentides tel: 450-226-8484 PDS of Brampton/Guelph tel: 613-732-2335 tel: 905-796-6100 PDS of Sarnia/Lambton SPD de Laval Inc. tel: 519-336-2000 tel: 450-434-5858 PDS of Brantford/ Woodstock PDS of Sault Ste. Marie SPD de L'Outaouais tel: 519-751-1900 tel: 705-949-9631 tel: 819-772-4040 PDS of Chatham-Kent PDS of Simcoe County SPD Mauricie tel: 519-352-7700 tel: 705-458-8001 tel: 418-365-5786 PDS of Cornwall PDS of Sudbury SPD Montreal (Est) tel: 613-936-1818 Manitoulin tel: 514-644-9955 tel: 705-522-3312 PDS of Durham SPD de Quebec nord-Est tel: 905-666-7744 PDS of thunder Bay tel: 418-653-6666 tel: 807-344-7566 PDS of Etobicoke SDP du Sud-Ouest tel: 416-626-7371 PDS of timmins tel: 450-829-3700 & the Claybelt PDS of Halton/ SPD de Vaudreuil Solange tel: 705-360-1124 Hamilton-Wentworth tel: 450-510-5559 tel: 905-333-9288 PDS of toronto MArItIMES tel: 905-856-5737 PDS of Huron-Perth PDS of Cape Breton tel: 519-482-7371 PDS of Windsor & Essex tel: 902-567-3377 County PDS of Kingston PDS of Cumberland/ tel: 519-776-4567 tel: 613-531-7962 Colchester PDS of York region PDS of Kitchenertel: 902-893-7260 tel: 905-856-5737 Waterloo Inc. PDS of Fredericton tel: 519-570-0438 BrItISH COLuMBIA tel: 506-457-9074 PDS of Lanark PDS of Greater Vancouver PDS of Halifax/Dartmouth 613-253-7500 tel: 604-501-9992 tel: 902-481-0874 PDS of London PDS of Moncton ALBErtA tel: 519-685-9595 tel: 506-382-8285 PDS of Calgary PDS of Mississauga PDS of new Glasgow tel: 403-293-2200 tel: 905-270-3399 tel: 902-695-3223 PDS of Edmonton PDS of Muskoka PDS of northeast new tel: 780-454-4047 tel: 705-645-5745 Brunswick PDS of niagara/Haldimand PDS of red Deer tel: 506-826-3688 tel: 403-342-4666 tel: 905-892-3456 PDS of northwest new PDS of Grande Prairie PDS of north Bay & Brunswick tel: 780-538-3300 nipissing tel: 506-473-4555 tel: 705-494-1000 SASKAtCHEWAn PDS of PEI PDS of northumberland tel: 800-661-5975 PDS of Saskatoon & PE County tel: 306-374-7000 PDS of Saint John tel: 613-475-3338 tel: 506-633-1108 MAnItOBA PDS of Orillia PDS of Eastern tel: 705-325-8003 PDS of Winnipeg newfoundland tel: 204-586-1684 PDS of Ottawa tel: 709-747-2648 tel: 613-822-2734 QuÉBEC PDS of Western PDS of Owen Sound newfoundland SPD de Brossard tel: 519-376-8022 tel: 709-686-0726 tel: 450-659-3333 PDS of Peterborough SPD de Lanaudiere & Kawartha Lakes tel: 450-932-3597 tel: 705-799-7777

Responding to your needs 24-HOUR NATIONAL RESPONSE CENTRE

800-661-5975

PDS-NetworkAd-Island-4.5625x7.25-July2011.indd 1

pd s.c a

When to analyze In a house fire, if a microscopic analysis determines that soot is present, why spend the extra time and money trying to establish whether or not the soot was from the house’s furnace or from the fire? Even if the analysis shows that the soot was predominantly from the furnace (and it is not always possible to make that type of determination), how certain will your expert be as to the likelihood that absolutely none of the soot was from the fire? Moreover, it would be difficult to justify how such contamination can be left in a residence when most homeowners would expect there to be no soot present.

In an industrial plant fire, where the boiler room had a number of very large, oil-fired boilers in use, it may be very useful to analyze the soot found in the boiler room. This is to see if any of the soot from the fire in the adjacent office made it into the boiler room. It is quite possible the boilers would have contributed a meaningful amount of soot to the room. If only a small amount of soot was due to the fire, one might suggest the additional soot made no meaningful difference to the baseline contamination in the boiler room, so why saddle the insurer with the associated cleanup costs?

That might still be a difficult argu-

ment to advance, and would certainly depend on the specific findings, but it is more logical to make that argument in an industrial setting as compared to a residential setting.

In conclusion, when making decisions concerning residual soot contamination in a structure fire, one must carefully consider the circumstances of the fire before embarking upon an investigation to determine where the soot is and where it came from. Many factors should be consid-

The PDS Network

scope? If the answer to this question is yes, then in most cases that’s the end of the analysis – the next step is remediation. However, in certain cases the next step may be to test for the specific composition of the soot, by having the suspect material sent to an accredited laboratory to determine the exact chemical composition. One might ask the question, why do that, since the soot could only be from the fire, right?

Wrong! Soot is generated from many sources of incomplete combustion. It can come from various sources in our urban industrialized environment, so all potential sources for the soot, and if they could be a real and substantive potential contributor, must be considered. Not doing so would run the risk that pre-existing non-loss related damages would be include in coverage and restored unnecessarily.

August/September 2011

11-07-20 12:46 PM

Claims Canada 31

04/08/11 12:02 PM

The Forest Fire that Took a Town A restoration employee’s first-hand account of the devastation in Slave Lake, Alberta

BY MARTIN MORAN

The sun was dipping over the treetops as I made my way to Slave Lake, Alta on May 26, 2011. I hadn’t been back to Alberta for some time, and had missed how late it stays light this far North. I had already passed a stand of tall, charred timber, the remnants from a previous forest fire, apparently nothing new for the people who live in this area. A fire had burned right through the heart of town ten days ago, and soon residents were going to be let back into the town to inspect their homes. Already, bus tours of Slave Lake residents and insurance personnel had gone through the town — although it was simply a tour and inspection, with no one allowed to leave the busses.

Reaching the checkpoint the RCMP had set up on Highway 2, I waited while the officers called the detachment to confirm my credentials, and then waived me through. Security was still very tight, and I was only allowed in as FirstOnSite Restoration was already in town working on some essential services. There had been almost no traffic on the road for some time, but now I had an escort: A young black bear loped across the road in front of me, without a care in the world except to stay out of my way. I continued on the highway, passing through an area where the road, the road signs, and the trees were stained bright pink — remnants of fire retardant, sprayed as a barrier, to prevent the fire from crossing the road.

I had flown to Edmonton the previous Sunday, to meet with adjusters and insurers, and to act as a liaison between our staff on the ground and the people that would be handling the claims on behalf of the residents of Slave Lake. I now made my way to our command centre — a leased house with ten acres. We would soon house and feed 150 workers here, all of whom were committed to helping rebuild the town and surrounding communities that were devastated by the massive wind-driven fire. Our secured command centre, equipped with a mess hall, satellite television and Wi-Fi access, would also temporarily act as a launching point for a dozen adjusters and other claims personnel that like us were there to help rebuild the town.

The town The Town of Slave Lake is located on the shores of Lesser Slave Lake, a large beautiful lake in Northern Alberta. Our camp, situated at an area known locally as “the point”, was very close to where the Lesser Slave River entered into Lesser Slave Lake. Highway 88 meets Highway 2 at the south end of Slave Lake, and driving northeast along Highway 88, you pass by the majority of the destroyed homes to the north. Here, 32 Claims Canada

p32-33 FOS SLAVE LAKE.indd 32

August/September 2011

approximately 200 residences were devastated by the fire.

The fire came to the town quickly, driven by winds that approached 100 kilometers per hour — a true fire storm.

These winds were indiscriminate, and rather than smolder and cause adjacent properties to burn, the fire was driven from structure to structure by the wind, inexplicably sparing some buildings and destroying others. On Main Street, directly across from the destroyed town hall, an automobile dealership remained standing; the two large commercial businesses on either side were total losses, ready to be bulldozed.

For 18 years prior to joining FirstOnSite Restoration, I was an independent adjuster, and had seen my share of destruction, from bus and tractor-trailer collisions to tragic fires. Nothing had prepared me for the sobering and humbling devastation I saw when I made that first trip along Highway 88. In the dim light, I thought that to my left might be undeveloped land, or a large park; then I recognized the charred trees, the hulking shells of pickup trucks, the skeletons of backyard trampolines that signified that before May 16, there had been a thriving community here. A very heavily policed ghost town had replaced an area when once families played, baseball diamonds and soccer fields bustled with activity and businesses thrived.

The work FirstOnSite Restoration immediately began to help do their part to rebuild the town, and restore the properties that were needed to help the residents return. Two of our first jobs were the RCMP detachment — which needed to be secured before the RCMP would allow property owners and residents to return — and one of two local supermarkets that would get food supplies moving. Concentrating first on community businesses to get the infrastructure stable, we began the hard work and heavy lifting, from cleaning local restaurants to helping local churches re-open for Sunday service. We worked with both the adjusters and the insureds, helping them to re-open as quickly as possible, so that life could return to normal in town. We even helped to re-open both the Boston Pizza and a local sports bar so that people would have somewhere to go and watch Vancouver’s run in the Stanley Cup Finals.

As residents were allowed to return, we turned our attention to the homeowners’ claims. Power had been cut off to the town for a considerable time, meaning that all of the refrigerators and freezers had to be replaced. Remember my friend the bear? At one point, he and 39 of his gang-members were spotted in town — no doubt treating the duct-taped appliances as a zip locked buffet. As people returned to their www.claimscanada.ca

04/08/11 2:14 PM

residences, they were given a package that ers, to office staff. We also preferentially A very heavily included several brightly coloured cards sought local sub-trades wherever possible, policed ghost town that were to be taped to the windows of as it was both cost-effective for our custhe homes; they outlined which utilihad replaced an area tomers, and reflective of the commitment ties were still needed. Once restored, the we were making to the town. when once cards were turned over to read “Done”.

The reward families played, Given the wind-driven nature of the fire, we were surprised at first to see such Shortly after I joined FirstOnSite Resbaseball diamonds a small volume of ash and soot in most toration, we launched our new Mission, and soccer fields buildings — it was present, but much Vision and Values — the core of what we bustled with activity want each of our staff members to live by. thinner than anticipated. The high winds also drove the fire away from many housWhen it was initially launched, the section and businesses es, so there were many fewer homes that that describes what we do stood out for me: thrived. were partially damaged on the exterior “Our mission is to deliver rapid and suthan expected. There were more than 370 perior disaster restoration services to Cahomes totally destroyed by the fire, but nadians in times of emergency. We projust over 55 that had partial exterior damage. As the claims tect, preserve and restore order. We put things right — the were investigated, there was additional evidence of damaged right way — each and every time.” siding, shingles and other partial required repairs, but the This statement was the embodiment of the work we were extensive damages that were expected were not prevalent. doing in Slave Lake. There was always an altruistic sense FirstOnSite Restoration made a commitment to assist in I had when I was an adjuster that each day, I could bring the rebuilding of Slave Lake, which may well prove to be Can- some good to someone’s life. This feeling continues today ada’s largest single catastrophe event. We put together a large in the good, honest labour that our employees perform, day team of people and resources, initially drawing staff from in and day out. It is especially evident in an area like Slave the western provinces, and eventually mobilizing crews and Lake, where a community lay in ruins. There are certainly equipment from Ontario and Quebec as well. As we began many months, and possibly years, of work to be done to reworking with the people of Slave Lake, irrespective of where build the town. With recent heavy rains flooding an already we were from, they repeatedly told us that they were happy fragile community, our restoration work in Slave Lake will to have us present in such numbers to help their community. continue for some time. ����������������������������������� As the next phase of the town’s reHeaded by Billy Short, our vice president of large loss, newal lies ahead, and whenever our work winds down, we and Steve Gregg, our district general manager for the Great- will always know that while in Slave Lake, we did protect, er Toronto Area, our team was welcomed into the town as preserve and restore order. It is what we do best.  we began our work. Our commitment to Slave Lake did not stop at restoring property — we hired more than 30 local Martin Moran is the director of business development, residents to work with us — from labourers, to camp work- Western Canada, with FirstOnSite Restoration. www.claimscanada.ca

p32-33 FOS SLAVE LAKE.indd 33

August/September 2011

Claims Canada 33

04/08/11 2:14 PM

Property Loss Update

BY GLENN GIBSON

A recent MIT study was focused on determining what motivates employees who are doing complex, deep-thinking, creative tasks. One might think this type of employee would respond very well in a ‘pay for performance’ culture. The study disproved this theory. It suggested it is important to pay an employee enough money so they are not thinking about money when doing their job, so they are totally focused on the job at hand. But the key motivators are: • Autonomy: It’s important to have self-direction.

• Mastery: People want to get better at improving their skills.

• Purpose: Making a contribution to something is important.

Consider this and reflect on what we do as professional loss adjusters. We are incredibly self-directed. We work hard to improve our skills to do our jobs better. And, our purpose is: “We help people.” Yet, as a profession, we do not get the recognition we deserve for the accomplishments we achieve. In recent months, there are no stronger examples of this than the response shown to catastrophic events in Chile, New Zealand, Australia, Japan, the United States of America and Canada.

This survey highlights that while you need to ensure that you are paying people enough money to do their jobs but it is not the fundamental driver of what motivates us. When you buy insurance you are buying a promise that in some of the darkest moments you may face in your life your insurer will be there to help you. Loss adjusters deliver on that promise every day. And you do a great job!

Jones v. Kaney Supreme Court of the United Kingdom Mar. 30, 2011 This was a majority decision (5-2 vote) of the top court in the United Kingdom. The decision involves whether or not “immunity from suit” will continue to be granted to “experts” who testify in a legal matter.

34 Claims Canada

p34-36,38-40 GLENN GIBSON.indd 34

August/September 2011

If a judge decides a witness can be qualified as an expert, the individual is allowed to express their opinion to assist the court in understanding something that is usually complicated. In expressing their opinion, the expert must be able to freely speak their mind. What impact would there be if there was a fear they could be sued over their opinions?

Lord Phillips, in writing for the majority on this case, said, “The case that immunity is necessary to prevent a chilling effect on the supply of expert witnesses is not made out.”

The decision made reference to the expert’s prime duty to be a ‘friend of the court’ to explain complicated matters.

Their evidence must not reflect any bias no matter who was paying their expert fees. The top court in Britain felt that removing their immunity from lawsuits would make experts sharpen their awareness of the risks involved in expressing initial opinions too strongly in favour of a client’s position only to retreat at a later date when other opinions are expressed.

The view overseas is that this decision will not result in a raft of lawsuits against experts. Most experts fully understand the dual responsibility they have with respect to their clients and to the courts.

Case summary Professional Engineers Ontario published guidelines to their members in the fall of 2010, which outline the scope and duties of an expert witness. The guidelines also include suggestions on how to prepare and offer testimony in a legal procedure. It is an excellent resource.

A. Hansen, M. Rae et al v. D. Bellefeuille Queen’s Bench for Saskatchewan, J. Scheibel Jan. 12, 2011 On Dec. 9, 2004 a fire destroyed the plaintiff’s home.

The damages totalled over $286,000 and the matter before the court was to decide upon a subrogation action against a contracting firm. www.claimscanada.ca

04/08/11 2:20 PM

This decision reflects considerable analysis by the trial The contractor was hired by the plaintiff to refinish floors in their home. This particular contractor was a friend with judge on the evidence of the expert witnesses and other evithe homeowner having built the house for them in 1999. dence provided by the discoverer of the fire. In the fact of When a problem surfaced with the floors in 2004, this con- conflicting expert evidence, it is up to the trier of fact to detractor agreed to refinish them and arranged to do it when termine what weight is to be given to any expert testimony the family was on a holiday. No price was discussed or agreed after a careful review of all evidence (Toneguzzo-Norvel v. upon, but it was clear there would be a payment made.

Burnaby Hospital and Housen v. Nikolaisen).

Several coats of Varathane were applied to the floors in The judge stated that: the days leading up to the fire. Evidence was introduced at “I attach very significant weight to his [Kooren’s] written the trial of a warning on this product it was to be used “only report and his oral evidence in part because his on site examiin a well-ventilated area.” The contractor knew the product nation of the fire scene and in part because his conclusions are, gave off vapours and that it was potentially flammable. Evi- in my view, the only realistic and logical explanation as to the dence at trial included the fact that 11 hours before the fire cause and origin of the fire.” was discovered, Varathane had been applied and all of the Both sides made written submissions to this litigation windows in the home were “shut and the before the trial judge delivered this judghouse was sealed up.” ment. The defendants argued that at trial On a balance of At trial, the contractor’s lawyer atcertain portions of expert Kooren’s evitempted to have a floor refinisher qualidence were not referred to in his initial probabilities, fied as an expert witness. The plaintiff’s investigation report where he had reached the trial judge lawyer challenged this. Cross-examinahis conclusions on the origin and cause of determined the tion of this witness was effective because the fire. This related to information about the trial judge only allowed this individthe flash point of the Varathane product. fire was a result of ual to give evidence on his practice in reThe judge reviewed the case law on this the negligence of the point and dismissed the application. The finishing floors.

The trial then moved on to fire experts contractor and how he defense lawyers had not challenged this who had been hired by both sides in this point during the trial and they had crossused this particular lawsuit. All who testified were also qualiexamined the expert witness on this key product. fied engineers. point. They were aware well before the Fire expert Richard Kooren of Origin trial that this type of evidence was going & Cause Inc. was engaged to investigate to be led. the cause of this fire by the plaintiff’s inOn a balance of probabilities, the trial surers. He was at the scene two-days post judge determined the fire was a result of fire. He met with the local fire chief on the negligence of the contractor and how his arrival. He completed a detailed scene he used this particular product. examination, including numerous photoCase summary graphs. He concluded the fire was caused Considerable weight was placed on the evidence of the by the ignition of vapours from the Varathane finish with fire expert who attended the scene. But, this had to be comthe likely source of ignition being the refrigerator.

Engineer Mazen Habash, of the same firm, reinforced bined with the ability to get into the witness box and handle Kooren’s evidence at trial. He had investigated over 1,900 a strong cross-examination.

It should also be noted this fire was in 2004. In today’s forensic incidents in his career. His trial evidence was focused on whether or not the type of refrigerator in this environment one would think that with spoliation issues home could have provided an ignition source for the va- afoot that this type of fire scene would have had all parties pours from the Varathane. His conclusion was that this re- to potential subrogation notified to allow for equal inspection of the scene. frigerator “could” have been the ignition source.

The defendant contractor’s expert concluded there was Pietrangelo v. Gore Mutual et al “insufficient information upon which to substantiate a speOntario Court of Appeal cific fire cause.” He opined the ignition of Varthane vapours Feb. 23, 2011 was not the cause of the fire. He based this on his examination of the “circumstance, ventilation conditions and timeOn Jan. 30, 2006 the tenant of a rental house in Amline.”

In the battle of the experts, the trial judge noted all ex- herstburg, Ont. decided to use a production technique he perts seemed to agree on the origin area of the fire. The fire learned on the Internet to convert a half pound of maristarted on the west side of the home and spread east. But, juana into oil. Unfortunately, the plan did not work well the defense expert offered up other potential causes for this and this tenant and a friend were badly burned in the ensufire including baseboard heaters, light fixtures and perhaps ing explosion and fire. The dwelling did not fair well either, the refrigerator. And then went on to suggest it could have as it was subsequently ordered by the municipality to be destroyed. been electrical, fans, spontaneous ignition etc. www.claimscanada.ca

p34-36,38-40 GLENN GIBSON.indd 35

August/September 2011

Claims Canada 35

04/08/11 2:21 PM

The insurer investigated the claim and ultimately declined to pay it on the basis of the “Marijuana Exclusion.”

Justice E.W. Ducharme issued the Superior Court decision on Feb. 22, 2010 that upheld the insurer’s right to deny the claim based on the policy exclusion.

On appeal, the plaintiff lawyer’s argued in part that: 1. The policy language was ambiguous.

2. The exclusion was “unjust or unreasonable.”

3. The “intent” of the exclusion was related to “marijuana grow houses”.

The Appeal Court, in a unanimous decision, dismissed all three arguments. It was interesting to see their comment that: “There are certain risks, which insurers are entitled not to cover for legitimate business reasons relating to the ability to assess risk and set premiums.”

Cabell et al v. Personal Insurance Company Ontario Court of Appeal Nov. 5, 2010 This was an appeal from Justice M. Penny’s decision in the Superior Court of Justice on March 30, 2010.

The case involved damage to an outdoor, in-ground swimming pool that was damaged as a result of hydrostatic uplift pressure. The increase of this pressure was due to a build up of groundwater, which caused the pool to lift out of the ground.

The displacement of the pool caused significant damage.

The policy of insurance included the outdoor pool but there was an exclusion stating, in part: “We do not insure…

(11)… settling, expansion, contracting, moving, bulging, buckling or cracking of any insured property, except resulting damage to building glass.

(18) Loss or damage… to outdoor swimming pools…

But the policyholders did buy an endorsement, which amended the policy to include certain coverage for the outdoor swimming pool. This was written on an “all risk” basis, but the policy stipulated that “all other terms, conditions and exclusions of this policy remain unchanged, including the exclusions. . . . ” And, the policy goes on to re-name the applicable exclusions.

The original trial judge ruled the pool endorsement was not an independent part of the policy. So, the common exclusions should apply except to any extent those exclusions would be specifically amended in the endorsement. On that basis, the loss was not covered by the policy.

The Appeal Court noted several principles in interpreting insurance contracts: 1. Any policy clause should be interpreted “broadly in favour of the insured.”

2. An exclusion clause limiting coverage “will be strictly interpreted.”

3. Any ambiguity in the policy “will be construed against the insurer applying contra proferentem doctrine.”

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

Swim with the experts. Please visit our website for more information. www.rmc-agr.com

AB – SCott VentuRo LLP | AB – ChoMICkI BARIL LLP | BC – CARfRA & LAwton | BC – LInDSAy kenney LLP | MB – fILLMoRe RILey LLP | nB – Cox AnD PALMeR | nL – Cox AnD PALMeR nS – Cox AnD PALMeR | on – keLLy SAntInI LLP | on – BLAney MCMuRtRy LLP | Pe – Cox AnD PALMeR | QC – DonAtI MAISonneuVe, LLP | QC – SteIn MonASt, LLP | Sk – MCkeRCheR LLP

36 Claims Canada

p34-36,38-40 GLENN GIBSON.indd 36

August/September 2011

www.claimscanada.ca

05/08/11 8:53 AM

NEWTRON

7/28/09

12:06 PM

Page 1

THE SOLUTION PROVIDER FOR ALL YOUR CONSULTING AND RESTORATION NEEDS

2

3

4

5

NEWTRON ENGINEERING SERVICES

NEWTRON RESTORATION SERVICES

HIGH-TECH, INDUSTRIAL, MEDICAL AND ELECTRONIC EQUIPMENT RESTORATION. CAUSE & ORIGIN, LOSS MITIGATION, AND DAMAGE ASSESSMENT. TECHNICAL CONSULTING, AUDITING AND PROJECT MANAGEMENT.

24HR EMERGENCY SERVICES V AND RESP RESPONSE ANYWHERE IN NORTH AMERICA

1.800.238.3734

1

Emergency Respons e

2C

au

3 en

t ra

ion

eb u &R

ilding

6

Project Consulting

& M ana ge m

t

4L

Miti oss

gation

5

Reco ve r y ,R es to

www.newtrongroup.com

gin Ori

Technica l Au diti ng

& se

14 Automatic Road, Unit 37 Brampton, Ontario, Canada L6S 5N5 Tel: 905.458.1400 Fax: 905.458.4840 email: claims@newtrongroup.com

NEWTRON GROUP CAN HELP EVERY STEP OF THE WAY

Given the way the exclusions were laid out it seemed to them they were only buying coverage for “marring or scratching from the impact of a land vehicle, aircraft, satellite, spacecraft, riot, vandalism, hail, windstorm and theft, none of which seem very likely candidates for damage to an in-ground pool.

When dealing with a policy endorsement they agreed it generally does not operate independent of the policy.

However, if the limitation of apparent coverage in the endorsement is ambiguous, then the limitation should be spelled out clearly in the endorsement itself. If the insurer has an intention to not cover something—say so, clearly.

The Appeal Court then moved into analyzing what was the true intent of the parties when the contract was first agreed upon? The foundation for this analysis is found in a Supreme Court of Canada decision [Consolidated Bathurst] where S.C.C. Justice J. Estey, speaking for the majority said: “. . . Consequently, literal meaning should not be applied where to do so would bring about an unrealistic result or a result which would not be contemplated in the commercial atmosphere in which the insurance was contracted. Where words may bear two constructions, the more reasonable one, that which produces a fair result, must certainly be taken as the interpretation which would promote the intention of the parties.”

The Appeal Court felt that the nullification of coverage doctrine is something that applies even in the absence of ambiguity. This means even if the exclusion is clear and unambiguous, you must keep in mind the main purpose of the insurance coverage and whether to not cover a loss might be contrary to the “reasonable expectations of the ordinary 38 Claims Canada

p34-36,38-40 GLENN GIBSON.indd 38

August/September 2011

person as to the coverage purchased.”

The Appeal court reviewed the policy language and the arguments the plaintiff raised that the policy language was ambiguous and unclear.

While the court agreed there were some points to be raised on ambiguity, they didn’t rule on that issue because they felt the solution was really in analyzing the doctrine of “reasonable expectations.” When viewing this, they considered what was being covered for purchasing the endorsement to cover their swimming pool. Given the way the exclusions were laid out, it seemed to them they were only buying coverage for “marring or scratching from the impact of a land vehicle, aircraft, satellite, spacecraft, riot, vandalism, hail, windstorm and theft, none of which seem very likely candidates for damage to an in-ground pool.” In essence, the application of the common exclusion (#11) would virtually nullify any coverage. To conclude, “Such a result could not have been within the reasonable expectation of the parties.”

So, the Appeal Court established coverage for this loss.

Case summary This is a very important case. What did the insured think they were buying? The exclusions represent the fine print. The exclusions seemed clear, but the top court in Ontario provided a broad application to it. www.claimscanada.ca

04/08/11 2:21 PM

Winnipeg Health Authority et al v.

Temple Insurance Company Court of Queen’s Bench of Manitoba, J. McCawley Apr. 11, 2011 This all started with a windstorm loss on May 11, 2004 that apparently resulted in loss or damage that was not detected until two years later on Apr. 17, 2006. The damage repairs were undertaken by the plaintiff hospital between May 2006 and February 2007. The hospital felt it had been given the green light by the insurer to execute the repairs.

This was a motion requiring the defendant insurer to nominate an “appraiser” and proceed to appraisal under the Insurance Act. The plaintiff hospital commenced a legal action for coverage and indemnity under a builder’s risk policy. The insurer was taking the position the hospital was not entitled to indemnity because the loss was excluded by the terms of the policy. They also were arguing they had issues with the quantum of the loss.

Of note was section 23 of their policy, which was entitled, “Arbitration.” This section goes on to spell out the appraisal process as the method to resolve a dispute relating to loss or damage.

The plaintiffs also go on to rely upon section 21 of the Insurance Act, which provides for appraisal to determine

specified matters in the event of disagreement.

What is interesting to note is that in this case the authority to request an appraisal is only at the election of the insured. This would be done pursuant to the terms of the Insurance Act. The whole point to the appraisal process was noted in this case to, “. . . encourage the expeditious resolution of questions of value, to encourage settlement and to expedite trial process by providing a valuation based on the expertise of an appraiser or umpire.”

The damage issue at hand involves valuing property damage to equipment in a mechanical penthouse. The judge felt the amount of loss fell within s.23 of the policy entitled arbitration. Further authorities for moving things into this process fell within the provincial Insurance Act. The insurer argued the insured had to elect this process “within a reasonable time of the loss date and before a proceeding on the same issue advances to a point where the object of the provision is no longer attainable.”

The trial judge agreed one had to be prudent about the timing of allowing the appraisal process. However he did not see this as an issue in this particular case. This is in spite of the fact that the process was not triggered until six-anda-half years after the loss date. He did not feel the insurer was prejudiced in any way by the hospital invoking s. 23.

The insurer was ordered to participate in an appraisal process to resolve issues of damage.

Disaster Restoration Services

www.claimscanada.ca

p34-36,38-40 GLENN GIBSON.indd 39

August/September 2011

Claims Canada 39

04/08/11 2:22 PM

Case summary This judgment shows the willingness of our courts to put matters such as this into a process where a determination can be made quickly and efficiently.

Bajuk v. York Fire & Casualty Ontario Superior Court of Justice, PB Hambly May 10, 2011 A fire destroyed a house and its contents. There was a dispute as to the amount of loss and the matter proceeded to appraisal where an appraisal award was determined. The insured petitioned the court for a summary judgment based on paying the full replacement cost limit on the house, the actual cash value of the contents and the additional living expenses.

The house in question had been rebuilt and the judge ordered payment of the balance of the replacement cost limit and the additional living expense claim. But, in considering the contents claim he made reference to: “Glenn Gibson, in an article entitled, The Appraisal Process, in Claims Canada Magazine, 2011, v.4 #6 states the following: Jenish-Claims Canada2011:Claims

7/27/11

Engineering Investigations Accident Reconstruction Crash Data Retrieval Personal Injury Claims Vehicle Defect Investigations

www.jenish.ca Gordon M. Jenish, P. ENG.

PRESIDENT

74 Park Road South Oshawa, Ontario L1J 4G9 T 905-404-9285

F 905-404-9843

gmj@jenish.ca

40 Claims Canada

p34-36,38-40 GLENN GIBSON.indd 40

August/September 2011

3:41 PM

The umpire must ensure the process stays within the limits of his or her authority and does not drift into area that should be addressed by a court of law. For example, an appraiser for the insured might ask the umpire to agree some goods were destroyed in a fire. The appraiser for the insurer argues the goods were not in the premises destroyed. An umpire can drive the process to reach a conclusion as to the value of the loss, but cannot conclude that the property was on the site when the fire happened. Any such inclusion has to be left to a court of law.”

In a summary judgment situation like this, the trial judge felt there was insufficient evidence in front of him to determine if content items were actually in the house at the time of the fire. Any attempt on his part to do so would be purely guesswork.

The issue as to the value of the contents lost is in the fire was therefore something that would require a trial.

Case summary This is an interesting next step following an appraisal process. The appraisal process can determine the amount of loss — it can go no further. However, I have seen situations where there can be appraisal session, which produces a damage result and then a Page 1 flip-over to move to an arbitration process. This would have to be done by mutual consent of both parties and could expand into a more formal process where evidence is heard. But, it does produce a speedy, efficient costeffective solution.

Conclusions It is interesting to observe on the two Ontario Court of Appeal decisions how quickly the appeal court dealt with these matters after the lower court decision. Without question the efficiency of our top court in Ontario is quite impressive.

Earlier this year I published a third iteration of my original 1992 article where I tried to provide a simple explanation for how the appraisal process works. I was pleasantly surprised, and pleased, to see an esteemed member of our bench use the contents of that article to support his judgment. That certainly makes it worthwhile to do the research and writing that is required to publish this type of article.

On a final note, in my early days of getting involved in the appraisal process I had a number of matters that were led by Gerry Cleary as the umpire. He had retired after a distinguished career as a professional loss adjuster. He brought great leadership to every situation. He was creative and always eminently fair in how he worked each situation through to a conclusion. Gerry passed away very recently.

He helped solve many problems for a lot of people in a sterling career. He will be deeply missed.  Glenn Gibson is the global chief strategy officer with Crawford & Company www.claimscanada.ca

05/08/11 12:13 PM

Clients and Counsel who know Insurance, know us‌ So should you!

What we do Comprehensive Legal Services to the Insurance Industry & Self-Insured Risks, including: Complex Litigation Exposures Special Risks Property & Environmental Losses Commercial & Personal Lines Clamis Defence Personal Injury/Motor Vehicle/Tort Defence Accident Benefits

Subrogation/Loss Transfer Boiler & Machinery Product Liability Coverage Opinions & Defence Fraud Claims Professional Liability/E & O Defence

Easy to work with. Tough to oppose.

20 Queen Street West, Suite 2020 Toronto, Ontario Canada, M5H 3R3 T 416-979-2020 F 416-979-1285 office@gilbertsondavis.com gilbertsondavis.com

Gilbertson INTERIOR Fullpg Ad.indd 1

7/21/11 9:24 AM

Changing Climate How climate change is changing insurance

BY MIKE WALLACE

Over the past several years there has been a growing number of natural disasters around the world, with both economies and communities suffering as a result. After a record-setting year of natural catastrophes in 2010, climate change has become an increasingly hot topic for the insurance industry. The trend for more frequent and severe weather events has meant insurers have had to find new ways to manage exposure and risk, and to acknowledge the role of climate change as well as our collective responsibility to tackle this rising issue.

With 950 natural catastrophes recorded worldwide, 2010 was one of the worst years in history; earthquakes, tsunamis, hurricanes and tornadoes caused unprecedented damage. And 2011 is continuing in the same vein. These chaotic and costly experiences have provided significant opportunities for learning, evolution and self-awareness for the insurance industry as we face the need to adapt to the impact of climate change.

Lessons learned The insurance industry learned a lot from last year’s Chilean earthquake, a natural disaster affecting millions of people and at great cost. This catastrophe jump-started many internal discussions over the changing environment.

In Canada, we used this as an opportunity to implement education and develop expertise that would help prepare our brokers and clients for future large, catastrophic events.

We acknowledged there were a number of things we already do well — such as the use of commercial earthquake models — and identified areas where we could do better.

The Chilean earthquake proved there are greater risks when dealing with larger companies, such as clients who 42 Claims Canada

p42-43 RSA copy 1.indd 42

August/September 2011

have multiple premises on the coast. This type of accumulation, in addition to atypical exposures, provided the industry with another layer of knowledge that we need to apply when making our analysis. It’s also important to look at wordings and models to reassess if it meets current needs.

For example, in the case of Chile the wording included the terms “tidal wave” and “surges” but excluded “tsunami.”

With this experience, we saw how necessary it is to adapt terminology for practical purposes.

Learnings from the Chilean earthquake have increased our knowledge and expertise, enabling us to better understand risks and reinsurance needs for catastrophes, and to predict the effects of climate change as much as possible.

As an industry so heavily impacted by extreme weather events, we have an important role to play not only in managing risk and providing support to our clients, but also in doing something about the underlying issue. We come into our clients’ lives at their most vulnerable and trying times, and it’s our job to get them back on their feet as quickly as possible. Therefore it’s also our job to look at the bigger picture.

This means taking meaningful steps to address climate change.

Internal changes At our company, we’ve entered into a global partnership with global conservation charity World Wildlife Fund (WWF), which has been an engaging and incredibly enlightening experience for us as an organization. As a marine insurer in Canada, we have been particularly focused on marine conservation. Our goal is to secure the long-term protection of our oceans and the fishing industry, which is under a range of pressures including climate change. www.claimscanada.ca

04/08/11 2:32 PM

Internally, we work hard to bring our commitment to climate change and WWF partnership to life. Last year three RSA Canada employees had the opportunity to visit Churchill, Man. to see first-hand the impact of human activity on polar bear habitats in the Arctic. It was such an eye-opening experience that this year our global organization RSA Group has launched a worldwide internal initiative, The Arctic Challenge. The challenge encourages all RSA employees globally to get into teams of five and compete for one of 15 places on a trip to Churchill to meet WWF scientists, see the polar bears and the difficulties they are facing from a changing climate. More than 10,000 employees are competing across the group for the opportunity to demonstrate their environmentallyinspired actions through volunteering and fundraising, ‘green’ idea generation, or physical activity to lower their own carbon footprints, in order to contend for the coveted grand prize.

Creative solutions Insurers have a significant opportunity to use risk management expertise and product innovation to come up with creative solutions for energy savings. According to WWFCanada, insurers, and other industries, can make a positive impact on climate change by producing more energy from renewable sources and using energy more efficiently and wisely. The renewable energy sector has grown significantly in Canada over the past couple of years, particularly in Ontario, due in large part to the provincial government’s Feed-in-Tariff (FIT) and microFIT programs.

Insurers heavily invested in providing sustainable solutions are always looking at ways to use expertise to support initiatives that help tackle climate change, especially in the claims handling process. In claims and other areas, there are more products on the market that allow customers to upgrade to more sustainable appliances and building materials in the event of a claim on their home or business.

These green upgrades not only help make homes and buildings more energy efficient but can sometimes even help provide additional protection against extreme weather.

As insurers we have an immense opportunity to be agents of change, and should be encouraged by the signs that our willingness to adapt and find solutions means that a better future for our planet is actually within reach.

Climate change is a daunting reality of the 21st century and whether we like it or not, the insurance industry has been a barometer for the impact of this growing phenomenon. However, this presents a significant opportunity to take the lead and embrace the responsibility this gives us as an industry. From my perspective, facing the issue of climate change has not only challenged us to become more competitive by consistently enhancing our risk assessment and propositions, it has also opened up a world of possibilities to make a positive and meaningful impact for our clients, our people and the planet. 

Good for the Earth...

Re-using quality parts from another vehicle is recycling in its purest form.

Good for your Customers...

You’ll save them about half the cost of new OEM parts, without sacrificing fit and performance.

Good for Business...

Actively promoting a Green Parts alternative builds brand equity and customer loyalty.

To find a local auto recycler in your area, go to www.autorecyclers.ca

We are committed to the nationwide certification of all our members to meet the standards of The National Code of Practice for Auto Recyclers.

Mike Wallace is senior vice president of personal specialty insurance and reinsurance at RSA. www.claimscanada.ca

p42-43 RSA copy 1.indd 43

August/September 2011

Claims Canada 43

04/08/11 2:32 PM

Sustainability: The Social Footprint

A claims employee accepts the chance to travel to Vietnam as a volunteer for part of ‘Leave for Change” — an opportunity encouraged by his employer

BY LUIS DE SOUSA

I was keenly aware of The Co-operators guiding principle: To make a positive different in the communities in which we work, live and do business.

So when the opportunity of a lifetime was presented to me, I couldn’t skip the chance. Late in 2010, the company was promoting its annual recruitment for volunteers interested in participating in international development projects in developing countries around the world.

In May 2011, I found myself on a 17hour non-stop flight to Hong Kong, which eventually got me to Hanoi, Vietnam where I would spend three weeks as a ‘Leave for Change’ volunteer.

The Leave for Change program is run by an agency called Uniterra, which is sponsored by the Canadian International Development Agency. Through its Leave for Change program, Uniterra supports international programs that are aimed at reducing extreme poverty in 14 developing countries by pairing Canadian volunteers who contribute their personal and professional skills to develop and build sustainability for the social programs in these countries.

I spent three weeks not only enjoying the sights and social culture of a foreign country, but learning its business culture through my volunteer mandate with a local vocational training school in Vietnam. The school was started by a group of retired teachers whose aim is to fulfill their social objective to provide a free education for disabled and disadvantaged youth. The school’s training operation is rooted in tourism, training its students in restaurant and hotel management, in order to fill the large demand for qualified workers in 44 Claims Canada

p44-45 CO-OP.indd 44

a country that is developing its financial independence through the tourism industry. It operates a school with approximately 850 students, who are largely orphaned ‘street kids’ or come from poor rural families. Students are housed on the school property, which effectively runs as a large hotel and restaurant training ground. Students operate the dormitories as ‘housekeepers’ and hone their restaurant service and cooking skills through the operation of their student and staff canteens.

The school relies upon financial and practical support, both locally and internationally. Support from countries such as Canada, France and Spain have included developing practical training programs in European cuisine and French pastry making. This training has enabled the school to operate a student-run bakery and restaurant that has now expanded into two bakery outlets and five restaurants, serving fine Vietnamese and European meals, in the heart of Hanoi. The school uses the outlets as the final training ground for students when annual exams take place every May. Teachers and local four and five star hotel representatives attend as customers and grade the quality of the service and product. The success of the school program is well known in the community and it has a 100 per cent job placement rate for its graduates.

Most of the schools staff are returning graduates, who become teachers and trainers, working for a fraction of the salary they could with a five star hotel job, but choosing to give back to their community and the social cause that helped them.

While its social objectives are being met, the school struggles with its organizational objectives to become

August/September 2011

financially independent. My volunteer mandate included providing management tools and tips in order to enable more efficiency and profitability in its retail outlets. Profitability will provide the school with the financial capacity to continue to grow its enrollment and reach out to more needy students and families.

Working with the school administration, the school demonstrates a clear passion for meeting its social objectives with a strong understanding that to do so, it must remain a positive contributor in their community. While they are full of ideas that would generate greater profit, they consciously evaluate each idea to ensure their community reputation of helping those in need — which requires it to act as a responsible corporate citizen — is not hindered. In evaluating profit generating ideas, many ideas are rejected, given the risk of degrading its reputation and long-term benefit for the community.

The schools operational practices continue to inspire the passion of its staff and the generous reciprocity of the community it supports. I realized the measure of the school’s success rested in its reputation. This in itself was a recipe for continued success in the future. While they embraced my ideas — and will be implementing a new balanced scorecard to measure their success — they were most excited and impressed to learn that The CoOperators guiding principle, to make a positive difference in our community, so closely resembled their philosophy and desire for a positive and sustainable social footprint. This experience is helping me to share The Co-operators broader sustainability activities and its overall sustainability goal: to www.claimscanada.ca

04/08/11 2:35 PM

make tomorrow’s world a better place today.

Within the insurance claims environment, there is a growing movement and opportunity to reduce our carbon footprint by becoming paperless, utilizing environmentally safe products in repair of vehicles and buildings, reusing and recycling instead of trashing, and making conscious decisions in our gas and electricity usage, just to name a few.

With the threat of global warming, carbon emissions, waste and the rapid deterioration of irreplaceable resources of the Earth, some people are making end of the world prognostications. More and more are realizing that we can’t afford to wait for the answer and we need to take action.

As individuals, many people are taking action to reduce their carbon footprint by being aware of their actions and its impact on the environment. As consumers, our appetite for environmentally friendly products is growing, and thus, it is no surprise to see corporate efforts to satisfy this growing need increasing. While some corporations exist solely to capitalize on the profit of meeting the demand of the environmentally conscious consumer, few corporations have broadened their sustainability policy to the degree of The Co-operators. As an insurer, The Cooperators recognizes not only the environmental aspect of sustainability, but the social aspect required to responsibly contribute towards empowering individuals to satisfy social needs.

Strategies to control climate change are becoming common, but often overlooked in sustainability policies is the social footprint that is created by our actions. With the drive for profit usually resulting in actions against the financially vulnerable, often through the exploitation of labour or resources in undeveloped communities or countries, there is a need to protect the resources of the Earth against the threats of degradation and poor development of social systems throughout the world. For The Co-operators, the clear philosophy guiding all of its actions is to be a good corporate citizen for its employees, customers and communities, both locally and in certain cases, globally. www.claimscanada.ca

p44-45 CO-OP.indd 45

In its broad sustainability vision, The Co-operators is taking action by striving to be a catalyst for a sustainable society. As a catalyst, it seeks to engage people to take action through its operational policies that include its employees, clients, industry partners, the community and government by incorporating practices that foster a more sustainable society and economy.

As shown above, just one example of its wide array of sustainability activities is its annual sponsorship of a group of its

employees that are participating in the Leave for Change program, aiming to positively impact our social footprint and to make tomorrow’s world a better place today.

You can learn more about the Leave for Change and how you or your company can participate at ‘www.uniterra.ca’.  Luis de Sousa is a senior manager of national claims with CUMIS General Insurance Company, a part of The Cooperators Group of Companies.

TM

Toll Free:

(877) 261-PURO (7876) www.puroclean.ca August/September 2011

Claims Canada 45

04/08/11 2:35 PM

Green Parts

BY STEVE FLETCHER

At a recent Breakfast Summit on Recycled Parts held in Toronto, three key stakeholder groups – recyclers, insurers and repairers – came together to discuss areas of mutual concern and opportunities. The Summit started an inter-industry dialogue that will begin to pay dividends for the stakeholders — and more importantly for the motor public and the environment.

Total-loss vehicle claims are a lose-lose situation for everybody involved. They can result in higher claims payouts for the insurer and lost business for the collision repair industry.

It has been shown time and time again that policyholder satisfaction declines when their car is totalled. As these totals continue to rise at an alarming rate, it’s in everyone’s best interest to reverse the trend. Now, more than ever, recycled parts can have a greater role to play in saving a vehicle and getting it repaired.

Re-using quality vehicle parts is also the ultimate environmental choice. No other product on earth is recycled more than an automobile.

Not only does it keep a flood of dan46 Claims Canada

p46-47 RECYCLERS.indd 46

gerous toxins from being released into our ground, air and water, it prevents unnecessary use of valuable landfill.

Re-using parts also reduces the need for new products to be manufactured, saving energy and resources and reducing harmful emissions that result from the manufacturing process.

By incorporating more recycled parts into your repair plans, you’ll support a recycling industry that reclaims over 12 million vehicles across North America annually. It’s incumbent on every industry to be responsible stewards of the earth, ensuring a sustainable future for all of us.

But putting a greater focus on recycled parts is more than simply being a good corporate citizen or meeting KPI targets. It’s a smart business decision. By signifi-

August/September 2011

cantly reducing the cost of parts, we should all see a drop in the number of write-offs and non-repaired vehicles.

‘Like, Kind, Quality’ assurance One clear advantage of using recycled parts over aftermarket parts is the perfect fit. It is unmatched because you’re getting the original OEM parts made specifically for the year, make and model of that vehicle. That means the original specifications and the right performance.

Today’s reputable auto recyclers ensure there are no unpleasant surprises when you’re ordering recycled parts and do their best to make the process easy and efficient.

During dismantling, every part is inspected and www.claimscanada.ca

04/08/11 2:43 PM

only those that meet strict guidelines and tolerances are offered for resale.

Mechanical parts are tested to ensure they’re in proper working condition.

When each component is dismantled for re-use, it is assigned an industry-wide interchange number that identifies which vehicle, model and type it fits. The part is then tagged with a bar code or inventory number, and then entered into a computerized inventory management system. With the click of a mouse, recyclers know what they have in stock and where it’s warehoused, so they can locate it in seconds. A sophisticated parts locator network connects the inventory data of hundreds of auto recyclers across the country, so if your local recycler doesn’t have the part you need, they will know where to get it.

Body panels and mechanical parts are carefully graded, using a standard set of codes that tells you the condition of the part in detail, including the mileage of the vehicle it came from and a description of any minor damage that might be present. These standards, developed by the Automotive Recyclers Association (ARA) have been adopted on an international scale and are built in to the inventory systems of all recyclers. Standard cut line diagrams and inclusions in part assemblies help clarify what you are getting when you order.

You’ll know exactly what to expect before it arrives at the shop so there are no delays in getting the repair out the door.

As an industry, recyclers are working toward greater detail and uniformity in descriptive language and the addition of 3D imaging in their inventory databases. This is in addition to improvements to online ordering tools to make procuring recycled parts as easy as other alternatives going forward.

Auto recyclers also play a key role in the responsible disposition of salvaged vehicles, which in turn creates the inventory of parts to make available to insurers and repairers – a full circle of service that is beneficial to all.

cally forged strategic relationships with a few key parts advisors at their best local recyclers. Not only do these people make it simple, fast and painless to source and order the exact recycled part that’s right for any vehicle; they lend their knowledge and expertise as a broader resource. With a quick phone call, they can go far beyond merely filling an order for parts. They can provide advice on all of the collateral parts you might need to go with it to complete your repair plan, many you might not have

Using recycled trim kits, door assemblies, radiators, mechanical parts, glass, window motors, light assemblies etc. can often make the difference between a viable repair and a total loss.

considered. Using recycled trim kits, door assemblies, radiators, mechanical parts, glass, window motors, light assemblies etc. can often make the difference between a viable repair and a total loss.

Greening of the consumer In days gone by, many consumers would be reluctant to use “salvage” parts in their repairs. In order to address the issue, the Automotive Recyclers of Canada (ARC) and their various provincial associations embarked on a significant consumer-focused marketing campaign to re-brand used parts as “Recycled Green Parts.” The intent is to clearly communicate both the environmental and economic benefits to the general public. In addition, ARC has been instrumental in encouraging, and now mandating, the use of the National Code of Practice for auto recyclers, developed with Environment Canada.

This increased brand awareness and dramatic improvement in environmental operations, combined with a fundamental societal shift in green consumer behavior has made the use of green parts not only palatable to most, but desirable. These days, not only do people appreciate being offered a greener alternative in everything they purchase, they expect it. And when they’re rewarded with lower costs and fewer total losses, the payback in customer loyalty can be astounding.

You can find a certified auto recycler near you by accessing the member roster on the ARC web site at www.autorecyclers.ca.  Steve Fletcher is the managing director of the Automotive Recyclers of Canada (ARC)

Valuable resource While it’s relatively easy to source parts online, the adjusters who have had the most success using more recycled parts have typiwww.claimscanada.ca

p46-47 RECYCLERS.indd 47

August/September 2011

Claims Canada 47

04/08/11 2:45 PM

Correct Evaluation

Loss size can be dramatically affected through careful consideration of whether the damaged equipment is to be repaired or replaced

BY DAVID GEORGE WELDON

Once it has been determined the insured is covered for the loss, property policies often state the damaged equipment or system is to be replaced or repaired, whichever is most cost-effective and fully returns the insured to their pre-loss condition. The decision to either replace or repair the equipment or system directly affects the loss size and depends on many factors including: the age of the equip48 Claims Canada

p48-49 NEWTRON 2.indd 48

ment, the specific component(s) that were damaged (i.e., electronics, mechanical elements), the equipment’s maintenance history, its applicationcriticality (i.e. life-safety), the impact on business-interruption costs, and whether the equipment manufacturer’s warranty is current or has expired.

Obsolescence due to old age may hamper efforts to obtain spare parts and a repair warranty. Repair of electronic circuitry that relies on application-specific firmware may be restricted by the manufacturer, leaving

August/September 2011

customers with no choice but to buy new product. The maintenance history, or more specifically, the lack of knowledge of the equipment’s maintenance history, increases the risk the insured may later claim that subsequent equipment problems due to non-loss-related events are associated with the original loss event. Finally, the insured’s equipment may still have been under the manufacturer’s warranty when the loss event occurred.

Although most manufacturer’s void their warranty once the equipment has www.claimscanada.ca

04/08/11 2:59 PM

announcement_CanadianUnderwriter:Layout 1

been exposed to lightning, water, heat and/or smoke, the insured expects that any repairs are covered by some level of warranty (90 days, 180 days etc.) against poor workmanship or the infantile failure of replaced parts.

The following are just two examples of many repair/replace decisions and show the large cost savings that can be realized if ingenuity and correct evaluation of the potential success of repair are applied.

Lightning strike A paving company experienced a direct lightning strike to its communication tower. Among other damage, the power supply for the in-ground truck scale was damaged. Due to the old age of the scale, the manufacturer no longer built or supplied spare parts for that particular model of scale. Furthermore, the new power supplies that were available were incompatible with the old load cells in the damaged scale.

Replacement of the entire scale including new load cells was suggested by the vendor as the only solution and at a cost of $14,800. Furthermore, the vendor estimated the replacement scale could not be delivered for at least eight weeks. Engineers, retained by the insurer, correctly assessed the electronic components within the power supply could be repaired with minimal risk since there were no firmware chips in the circuitry. The power supply was successfully repaired for a cost of $400 and the scale was fully operational within two days of the loss occurrence.

Fairway flooding A private golf course in Ontario experienced flooding of many of its fairways and greens when the river that meandered through the course overflowed its banks during the month of January. Large rolling blocks of ice pushed and twisted small bridges and gouged fairways and greens, tearing up sections of the irrigation piping.

The golf course’s irrigation contractor attempted to repair the piping and flushing of the sand, stones and other debris that had entered the piping system was unsuccessful. Replacement of the irrigation system was thought to be the only solution and the cost was eswww.claimscanada.ca

p48-49 NEWTRON 2.indd 49

timated at $1.3 million, taking a minimum of 13 weeks. Since the golf season in Ontario starts in late April and typically lasts for 24 weeks, the impact to the golf course’s business interruption claim was significant. Not to mention the ire of the members who would not have access to their course for more than half the season. Engineers were retained by the insurer to evaluate whether all options for the system repair had been considered. The engineers were able to identify the problem with the original flushing attempt by the irrigation contactor. Since the water loops were inter-connected, flushing of one loop allowed debris to be forced into the other loops. Further, the sand, stones and debris were being forced into the sprinklers causing blockages and jamming of the solenoid-activated pop-up heads. The engineers suggested that backflow preventers (check valves) be temporarily installed at strategic points to isolate the loops from each other such that the flushing of one loop would not contaminate the others. The engineers were asked to work with the irrigation contractor to monitor the implementation of the repair procedure and ensure costs did not balloon out of control. The concept worked and the irrigation system was successfully repaired for a total cost of $620,000 versus the original cost estimate of $1.3 million. The job was completed in five weeks — eight weeks ahead of the original schedule. The final result was, at a minimum, a two-fold reduction in both the loss size and the businessinterruption costs.

It should be understood that not all equipment that has been damaged by certain loss events can be repaired; it depends on the particular circumstances. However, given the potential for the large cost savings associated with the repair option, consideration should first be given to an assessment of the likelihood of a successful repair by a third party expert before the replacement option is entertained.  David George Weldon is a chief engineer at Newtron Engineering Services, Inc.

Sandra Buckberrough Director, Business Development SIMAC Canada Inc., a leading provider of Independent Medical Assessments, is pleased to announce the addition of Sandra Buckberrough to its business development team.

“Sandra’s energy, drive and extensive claims experience will further strengthen our ability to deliver superior solutions to our customers.” said Gloria Rajkumar, President & CEO. “This is an exciting time for SIMAC. We have worked hard to build a solid reputation for excellence, have won several awards and we continue to grow.

We’re very happy to have Sandra on our team.”

Sandra brings over 20 years experience to SIMAC and is known for her professionalism and uncompromising integrity. Having spent the past 13 years with Aviva Canada, Sandra’s most recent role was Manager, Learning & Development (Claims). Her natural acumen for the industry and her dedication to personal and professional growth are the characteristics that drive her to take on new challenges, and to find new ways to make a difference in the industry she has dedicated her career to.

“We are in a very competitive market and the need to understand and exceed the customers expectations has never been greater,” said Sandra. “What impressed me the most about SIMAC was their incredible commitment to quality and customer service. I am thrilled to be joining the SIMAC team and look forward to providing our customers a level of service that is sure to make a difference!”

Sandra will work closely with her Co-Director of Business Development Craig Smith. Together their focus will be to broaden SIMAC’s service reach within the insurance industry.

“Sandra is a great addition to the SIMAC team.

She brings a wealth of knowledge and experience, which will help SIMAC grow and continue to be the IME provider of choice,” said Craig Smith. “I’m excited at the prospect of working with Sandra, and look forward to creating new opportunities and synergies.”

w w w. s i m a c . c a

August/September 2011

Claims Canada 49

04/08/11 2:59 PM

Subrogated Action

In Zurich Insurance v. Ison T.H. Auto Sales Inc. addresses control of a subrogated action

BY MICHAEL S. TEITELBAUM

Zurich Insurance Co. v. Ison T.H. Auto Sales Inc. is a very important decision by Ontario Superior Court Justice Strathy on the principle of subrogation and its practical application.

Zurich Insurance and Chartis Insurance applied for an order permitting them to pursue subrogation by controlling the action commenced by their insured, Toronto Honda, for both its insured and uninsured losses. Strathy concluded that until an insured is fully indemnified, i.e., it recovers its deductible and any of its uninsured losses, it can control the litigation against third parties allegedly responsible for its losses, including the insured portion of those losses. The application was, therefore, dismissed.

Facts There was an explosion and fire at a Toronto apartment building on Jul. 20, 2008. Toronto Honda had stored 71 cars in rented space in the building’s underground parking lot.

The cars were damaged. Under a manuscript all risks property policy prepared by a broker, the insured was paid approximately $1.9 million, representing the factory invoice price of the vehicles, (the amount payable pursuant to the policy), less a $10,000 deductible. The insurers recovered $900,000 in salvage, resulting in a net subrogated claim of about $1 million.

Toronto Honda claimed it also sustained a loss of profits, (the difference between the manufacturer’s price and the retail price), a loss of the ability to service the vehicles and to re-sell trade-ins, and a loss of goodwill. Its losses were quantified at $700,000.

A class action was commenced on behalf of the building’s residents and owners on Oct. 2, 2008 by two law firms, and was subsequently certified. Toronto Honda retained the same firms, and started a separate action on Apr. 21, 2009. It opted out of the class action. There is an order for the trial together of the two actions.

The insurers were aware since June 2009 of Toronto Honda’s separate action and that the claims included the insurers’ subrogated property claim. In November 2009, a firm retained by the insurers asked to be added as counsel of record in the insured’s action, and this request was denied.

Insured’s counsel advised it would keep them apprised of developments but that the ultimate control of the litigation would stay in Toronto Honda’s hands. Six days of discov50 Claims Canada

p50-53 ARC.indd 50

August/September 2011

eries were held in December 2009. The application in this proceeding was served on Aug. 19, 2010.

The “Release from Liability and Subrogation Clause” in the subject policy read: The insurer, upon making any payment or assuming liability therefor under this policy, shall be subrogated to all rights of recovery of the insured against any person, and may bring action in the name of the Insured to enforce such rights. ... [This paragraph waives subrogation against affiliates or subsidiaries of the named insured and against other named insureds and dealers] ...

Where the net amount recovered after deducting the costs of recovery is not sufficient to provide a complete indemnity for the loss or damage suffered, that amount shall be divided between the insurer and the insured in the proportion in which the loss or damage has been borne by them respectively.

Any release from liability entered into by the insured prior to loss hereunder shall not affect this policy or the right of the insured to recover hereunder.

Strathy noted this wording is similar to s. 152 of the Ontario Insurance Act — the fire insurance policy subrogation provision.

He also noted, “this clause serves an important practical purpose for the insurer. By making the insurer’s subrogation right available on making any payment or on assuming liability to make payment, it becomes possible for the insurer to bring suit in the name of the insured, and therefore to interrupt a limitation period, before the insurance claim has been fully adjusted, settled or paid.”

Parties’ positions The insurers argued that “the Subrogation Clause, properly interpreted, changes the common law rule and gives the insurer control of any litigation commenced against the third party.” The insured asserted “it is well-settled law that until the insured has been fully indemnified for all its losses, insured and uninsured, it is entitled to control any litigation against the tortfeasor — the insured is, as the expression goes, dominus litis. Toronto Honda says that nothing in the Subrogation Clause alters this position”.

The insured relied on several decisions of the Ontario courts and on the B.C. Court of Appeal decision in Farrell Estates Ltd. v. Canadian Indemnity Co. It also argued that the Supreme Court of Canada’s decision in Sommersal v. www.claimscanada.ca

04/08/11 3:11 PM

Friedman relied upon by the insurers, “had nothing to do with the issue of carriage or control of the litigation.”

Decision Strathy considered the “four cornerstones of insurance law”: insurable interest, good faith, indemnity and subrogation.

On the latter, he noted the subrogation principle “mandates that, having indemnified the insured, the insurer is subrogated to its rights and is entitled to exercise those rights in the name of the insured.” There is, however, no right of subrogation until the insured has been “fully indemnified,” which “means not only indemnified for all losses covered by the policy, but also indemnified for uninsured losses, such as the insured’s deductible, losses in excess of the policy limits, and losses (such as business losses) that are not covered by the policy.” And, “at common law, it was well-settled that until the insured was fully indemnified for all losses, the insurer had no rights of subrogation.” Strathy also noted the subrogation provisions for automobile insurance are more extensive that the above-noted fire provision. For example, s. 278(3) of the Ontario Insurance Act specifically provides that where the insured’s interest is limited to the amounts provided for co-insurance and deductibles, the insurer shall have control of the action.

The judge found the instant subrogation clause had two “operative aspects”: (a) the insurer is subrogated to the rights of recovery of the insured and may bring action in the name of the insured on making any payment or assuming liability therefore under the policy; and (b) where there is less than a full recovery of insured and uninsured losses, the amount recovered is pro-rated between insurer and insured.”

He continued: 43 Both provisions alter the common law. The first permits the insurer to commence an action against the third party even before the loss has been fully paid, as long as it has either paid part of the loss or has assumed an obligation to do so. The second provision modifies the insured’s www.claimscanada.ca

p50-53 ARC.indd 51

common law entitlement to a complete indemnity for all insured and uninsured losses before the insurer is entitled to recover anything. The Subrogation Clause alters the common law, discussed below, by permitting the insurer to share the amount recovered with the insured, on a pro rata basis, where there has been less than a full recovery.

44 As I have noted earlier, the policy contains no express provision about the right of either party to control the litigation. In particular, there is no provision, such as s.

278(3) of the Insurance Act, giving the insurer a right of control. The question, therefore, is whether the insurer’s entitlement to be “subrogated to all rights of recovery of the Insured” and to “bring action in the name of the Insured” to enforce such rights, carries with it the right to control the litigation.

On this question, the judge found the clause was not ambiguous; it “simply does not address the issue of which party has control of litigation against the third party.”

After reviewing the Farrell Estate case, (which we note observed the insured in that case actively pursued control of the litigation), the judge agreed with the view expressed in it that where, as here, the policy language on subrogation “appears to ‘track’ the statutory language of s. 152 of the Insurance Act [it…] should be given a similar interpretation.

I recognize that the policy in this case is an all-risks policy as opposed to a fire policy, but it appears to have adopted the language of s. 152.” He continued: 57 I also respectfully adopt the conclusion of Prowse J. and of the British Columbia Court of Appeal that the omission in s. 152 of language similar to what appears in s. 288(3) of the Ontario Insurance Act suggests that the legislature did not intend the insurer to have control of the litigation in the case of fire insurance, unless the insured had been fully indemnified.

Strathy then addressed whether the Sommersal decision changed the common law, and found it did not, stating: August/September 2011

Claims Canada 51

04/08/11 3:11 PM

66 In my respectful view, there is nothing in the reasons with the insurer with respect to the prosecution of the of Iacobucci J., or for that matter in the dissent of Binnie litigation.

J., to suggest that the Supreme Court gave consideration, 75 Fifth, for the reasons below, it is not necessary for me in any way, to the issue of the insurer’s right, having proto consider whether the court has a residual discretion, in vided an indemnity, to control the prosecution of an acappropriate circumstances, to give the insurer control of tion against the third party for recovery of both insured the litigation, even where there is no express contractual and uninsured claims. The question was simply not at or statutory provision. issue.

76 Counsel for the insurers submits that if I have discre67 Had it been the intention of the Supreme Court to tion as to which party has carriage, it should be given to overrule the principle that the insured is dominus litis the insurers who have a larger ($1 million) “hard” claim until fully indemnified, or to effectively overrule the decifor property damage as opposed to Toronto Honda’s sion of the Court of Appeal of British Columbia in Farrell smaller ($700,000) “soft” claim for business losses. There Estates, I would expect the court would have said so. is no evidence before me to show that Toronto Honda’s The judge then proceeds to summarize his conclusions, business loss claim is any less recoverable than the propand given their importance, they are reproduced here, with erty claim. some editing: 77 There are, as well, other factors, including: 70 First, the case law in Ontario, as well * the insured has been diligent in puras the decision of the British Columbia suing claims on behalf of itself and the Court of Appeal in Farrell Estates, conUltimately,if insurers insurers - this action was commenced alfirms that the insured is in control of the most two years ago and is well advanced; wish to make litigation, or dominus litis, until it has * the insurers delayed for over 15 months been fully indemnified for its insured and after the fire before opening up discussubrogation uninsured losses. sions about subrogation and these were arrangements in all 71 Second, there is nothing in the plain prompted by the initiative of counsel for their policies clearer, the insured; language of the Subrogation Clause to alter the insured’s right to control the liti* this application was not commenced particularly in cases gation until such time as it has been fully until August 4, 2010, more than two where the fire or indemnified. The Subrogation Clause is years after the fire; simply silent on the issue. automobile provisions * a great deal of time and effort has al72 Third, there is no reason to imply a ready been expended by Toronto Honda, do not apply, then, provision giving the insurer the right of and its counsel, in pursuing the claim; control in order to give business efficacy as the judge observes, * Toronto Honda, and the insurers, to the contract. Nor does an entitlement will benefit from the fact that Falconer they can and may to control the litigation follow by necesCharney and Sutts Strosberg act as class wish to do so. sary implication from the insurers’ right counsel and have control of that litigato be subrogated to the rights of the intion as well, resulting in cost-saving and sured and to bring action in the name of other synergies; and the insured. In this regard, I agree with the observation of * there is no suggestion that the insurers’ position has Melvin J. of the British Columbia Supreme Court in Afbeen or will be prejudiced in any way by leaving carriage filiated FM Insurance Co. v. Quintette Coal Ltd. at para. with Falconer Charney and Sutts Strosberg, who are un15: an insurer cannot be subrogated to rights which have questionably qualified to act as counsel. no connection with the subject-matter of insurance…

78 There may be cases where the insurer’s interest is so The effect of payment is to subrogate the insurers to the vastly disproportionate to the insured’s interest that it rights of the assured in respect of the subject-matter [of would be unreasonable to allow the latter to have control the policy]. of the litigation. This is not such a case.

79 Sixth, as this is not a regulated contract, the policy 73 The right to be “subrogated to the rights of the inconsiderations referred to by Iacobucci J. in Sommersal sured” means that the insurer is entitled to stand in the are not particularly pertinent. I do note, however, that shoes of the insured for the purpose of asserting the inin Portuguese Canadian (Toronto) Credit Union Ltd. v. sured’s legal rights against the third party. It does not Cumis General Insurance Co., above, Perell J. observed mean that the insurer is entitled to assert claims of the that there are sound policy reasons for the principle that insured in which it has no interest. the insured is in charge of the litigation - at para. 45: 74 Fourth, the effect of the Subrogation Clause, includIt seems to me that the underlying principle to this rule ing the right of the insurer to share proportionately in that makes the plaintiff domitus litus when there is comrecoveries, coupled with the duty of good faith, will repeting claims against a third party is salutary for at least quire the insured, although in control of the litigation, three reasons. First, until fully indemnified, it seems just to consider the insurer’s interests, to keep the insurer and fair that the insured should be able to control his or informed concerning the status of the litigation and her claims. Second, the rule protects a third party who concerning major issues in the litigation, and to consult 52 Claims Canada

p50-53 ARC.indd 52

August/September 2011

www.claimscanada.ca

04/08/11 3:12 PM

would otherwise be subjected to the same claim being brought by the insured and also being brought by the insurer in the name of the insured. Third, the rule avoids the evil of a multiplicity of proceedings.

80 Seventh, it would be a simple matter for the insurers to amend the Subrogation Clause to alter the common law position and to give carriage to the insurers, if they wished to do so. This very point was made nearly 50 years ago by Schatz J. in Kellar v. Jackson, above, at para. 5. I suspect that, at least in the case of sophisticated and powerful insureds such as Bank of Nova Scotia, there might be resistance to such a provision. Nevertheless, the choice belongs to the underwriters and if their pens are not prepared to write such a clause into the policy, they should not ask the court to do so.

81 There is, of course, another commonly employed alternative. In the case of large losses such as this, it is prudent and common for the insurers and the insured to discuss subrogation at the time the insurance claim is paid, and to agree on such matters as legal counsel, sharing of costs, and procedures for the resolution of any disagreements.

If the insurers have failed to take these simple and basic steps, they can hardly complain if their insured insists on its common law rights.

Comment As all insurers and counsel know, the issue of control of the litigation frequently arises in a subrogation scenario.

Most of the time, the insured’s losses are relatively small, or will be very difficult to prove. Usually, it will be the insurer that starts the action in its insured’s name, and counsel retained to do so will determine whether the insured has any uninsured losses, for example, its deductible, and whether it wishes to include its uninsured claims in the action. This is done on the understanding the insurer will decide how to conduct the litigation, and when and whether to settle, with any settlement proceeds being allocated on the basis of the subrogation clause in the policy or in accordance with statutory provisions.

This decision makes it clear, however, that if the insured wishes to pursue and control the litigation, and an agreement cannot be reached as to whether or how this will be done, it is within the insured’s purview to do so, subject to the proviso in paragraph 78 of Strathy’s reasons regarding disproportionate interests, (and the possible small residual discretion mentioned by the judge in paragraph 75).

Ultimately, if insurers wish to make subrogation arrangements in all their policies clearer, particularly in cases where the fire or automobile provisions do not apply, then, as the judge observes, they can and may wish to do so.  Michael S. Teitelbaum is a partner with Hughes Amys LLP. Hughes Amys is a member firm of The ARC Group Canada.

You’re invited to join instouch.

instouch

the insurance industry’s social network

Now with over 2,400 members and 100 groups, instouch.com is fast becoming the place for insurance professionals to connect and network with industry contacts, groups and associations.

Get connected.

Stay instouch.

Membership at instouch is free and once signed-up you can connect with and message others, join or add a group, post and interact on discussion forums and blogs, add or respond to events and much more. Look forward to seeing you there!

INSTOUCH1-2 ad new.indd 1

www.claimscanada.ca

p50-53 ARC.indd 53

www.instouch.com Join today.

August/September 2011

16/06/11 10:00 AM

Claims Canada 53

04/08/11 3:12 PM

EF

• education forum

A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA

Adjusting to

SABS:

Injuries, Assessments and Settlement Plans

A

s a result of Ontario’s new Statutory Accident Benefits Schedule (SABS), which came into effect last September, adjusters now need to develop a broader understanding of serious injuries and how the various facets of injury, assessment, treatment options and coverage fit together. While the new legislation directly affects adjusters in Ontario, the knowledge and skills involved are valuable for adjusters across the country.

Determining benefit entitlement requires integrating medical information with other actuarial information to establish an appropriate course of action for future rehabilitation. Adjusters need to: • differentiate between acute and chronic injuries, and between objective and subjective injuries • assess the impact of the injuries on the whole person • review the life care plan for returning the person to maximum independence • understand how structured settlements can be tailored to a claimant’s needs

Acute vs. chronic injuries Acute injuries are of limited duration (typically no more than six months) and result from a specific impact or trauma to the body. The most common types are soft tissue injuries such as sprains and strains of the muscles and/or ligaments of the neck, back, shoulder, knee, etc. More severe acute injuries can also include nerve damage and fractures. For 54 Claims Canada

p54-55 EDUCATION FORUM.indd 54

acute injuries, pain resolution occurs when the underlying cause of the pain has been treated and healed.

Chronic injuries typically involve pain lasting more than six months, and there is often no obvious cause for the pain. Pain normally serves as an alarm to warn us about harm to the body; in chronic pain, the alarm goes awry, remaining on all the time and at a disproportionate volume. A person who feels constantly constrained by pain may experience a reduction in mobility, and perhaps also depression or sleep disturbances. Chronic pain can involve a mix of physiological, psychological and sociological components. The challenge is to assess the relative contribution of each component and address each in the history and assessment of the patient.

Objective vs. subjective injuries Objective injuries can be verified using a diagnostic method other than the person’s verbal description; for example, an x-ray, an ultrasound or an MRI. The choice of an appropriate course of treatment is linked to the severity and type of injury as confirmed through diagnostic testing.

Subjective injuries are those that are difficult to verify through diagnostic testing, such as muscle or tendon strains and sprains. When a person provides a subjective description – for example, “my neck is stiff and sore” – healthcare professionals use standardized tests (range of motion, reflex tests, etc.) and best-practice guidelines to try to verify

August/September 2011

the subjective findings and determine an appropriate course of treatment.

Subjective injuries cannot always be measured and may require a great deal of investigation.

Assessing the whole person Assessing benefit entitlement also involves looking beyond the specific nature of the injury to its implications in the broader context of the claimant’s life. For example: • Who is the claimant? What is his or her education level, family situation, social activity pattern?

Reading up Assessing the impact of an injury involves looking at a range of medical and non-medical information.

For example: • Hospital records, emergency report, ambulance records • Case management reports • Reports of physiotherapists, occupational therapists, speech therapists • Specialist records – surgeon, dentist, ophthalmologist • Doctors’ medical/legal reports • IME legal reports • Clinical notes from doctors and therapists who have treated the claimant over the past 3–5 years (for information about past treatments) • Workers’ compensation records • School records • Social/sports interests/activities • Prior bodily injury settlements • Employee file

www.claimscanada.ca

04/08/11 3:29 PM

• What does the person do for a living?

Are they legitimately off work? What are their mental and physical requirements? Can the person be retrained?

• Is recovery progressing as expected?

Are there complications? Has there been another event?

• Does the claimant have a prior history of worker’s compensation or injury claims?

• How do any pre-existing conditions affect recovery and how will they affect quantum?

• Based on the medical reports, when should full recovery and final prognosis be expected?

Life care plans A life care plan is a comprehensive, detailed plan that identifies the current and future medical and non-medical needs of a seriously injured person, then quantifies the costs related to these needs over the injured person’s expected lifespan. It is based on the client’s individual needs and is specific to that client. The emphasis is on assisting the person in achieving maximum independence, preventing functional deterioration and providing replacement services for those tasks the injured person is no longer able to complete.

Future care cost reports and life care plans are similar but not exactly the same. Life care plans focus on catastrophic and permanent injuries which the claimant will not recover from, while future care cost reports may involve serious but less-catastrophic injuries and treatment over a prescribed time period.

A life care plan is usually completed by a registered nurse, occupational therapist, vocational consultant or rehabilitation management firm.

Structured settlements A structured settlement is a financial package designed to meet a particular claimant’s needs through periodic payments, either for a fixed term or for the claimant’s life. The structure is tailored to the claimant in question.

All payments are tax-free, and there is often an initial lump sum to meet current needs.

The funding vehicle for the structure is generally an annuity purchased from a life insurer. This vehicle has been developed over a number of years, and the design of structures has become quite sophisticated. For example, annuities can be indexed at a given rate to compensate for inflation and can also be de-

signed to provide lump-sum payments at intervals for specific needs, such as replacement of wheelchairs.

Structures are almost always designed to include a guarantee period; for example, “lifetime payments guaranteed 25 years.” The guarantee means the payments must continue to the end of the 25-year guarantee period, even if the person dies within 25 years of the start date. In that case, the remaining guaranteed payments would be paid to the person’s estate. If the person lives beyond 25 years, the payments will continue for as long as he or she lives.

Adjusters need to be able to explain to claimants the reasoning behind proposed settlement plans. This, in turn, requires understanding not just the plan itself, but the injuries, their impact on the whole person and the person’s life care plan.  This article is based on excerpts from the study material in the Understanding Serious Injury series of workshops – a new supplementary training program launching later this year, developed specifically for adjusters by the Insurance Institute of Ontario and the Ontario Insurance Adjusters Association.

excellence ADVICE. REPRESENTATION. OUTCOME. IT’S WHAT WE DO.

agmlawyers.com Affleck Greene McMurtry LLP 365 Bay Street, Suite 200, Toronto, Canada M5H 2V1 T 416.360.2800 F 416.360.5960

www.claimscanada.ca

p54-55 EDUCATION FORUM.indd 55

Excellence in Commercial Litigation and Competition Law

August/September 2011

Claims Canada 55

04/08/11 3:29 PM

• on the scene OTS Region Spotlight: Newfoundland & Labrador

Secretary, Treasurer: Brain Lacey Past President: Neil Lacey President: Marcel Pitcher l FirstOnSite has expanded its Ontario managementteam with three new appointments.

Steve Gregg is now district manager of the GTA. Jim Mandeville is now branch manager of Toronto East.

Len Perdic has accepted the title of project manager in Hamilton. l

Ontario Region CIAA President Richard Swierczynski along with CIAA executive members Kelly Stevens, Georgiana Chen and Spencer Bailey were out and about enjoying a day out golfing at another successful golf tournament hosted by the OIAA at Deer Creek Golf & Banquet Facility on June 10/11 with all benevolent proceeds going to the Big Brothers Big Sisters of Canada foundation. l

Kernaghan Adjusters’ held its Senior Management Team annual meeting in Bellingham at the Chrysalis Inn & Spa at the Pier in March.

George Noroian from Giant Leap Management was brought in to coach and mentor the senior management group to help the company continue building on the team. In attendance were: Patti Kernaghan, Steve Pitkanen, Blair McGregor, Marja Welton, Russ Fitzgerald, Grant Rerie, John Hall, Raymond Smith, Phil Harris. l

56 Claims Canada

p56,58-59 on the scene2.indd 56

August/September 2011

www.claimscanada.ca

04/08/11 3:35 PM

National Standing Committees 2010-2011 ADVISORY Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 401 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca Delores Thorbourne, BA, FCIP Granite Claims Solutions Suite 103 Greystone VII 4208 - 97 Street Edmonton, AB T6E 5Z9 Phone: (780) 442-3077 Fax: (780) 466-0325 E-mail: delores.thorbourne@mclarens.ca 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 James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@mclarens.ca David Porter, LL.B., FCIP, CRM Advance Claims Service Ltd. 206 - 2323 Boundary Road Vancouver, BC V5M 4V8 Phone: (604) 642-0660 Fax: 1-888-452-5246 E-mail: davidp@advanceclaims.com CAREER RECRUITMENT PLANNING Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3 P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: Richard@azclaims.ca COMMUNICATIONS Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Avenue, Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca CONSTITUTION & RULES John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@mclarens.ca CONVENTION Marie Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street Suite 204 St. Catharines, ON L2R 3H7 Phone (905) 984-8282 Fax (905) 984-8290 E-mail: marie.gallagher@mclarens.ca DESIGNATION Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca

www.claimscanada.ca

p57 CIAA NSC.indd 57

E. Brian Gough, FCIP, CLA, FCIAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: ebgough@marshadj.com Robert V. Pearson, CLA, FCIAA AAL Alberta Ltd. 600 – 2424 4th Street S.W. Calgary, AB T2S 2T4 Phone: (403) 452-2195 Fax: (403) 452-3568 E-mail: rvp@aaladjusters.com Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Avenue, Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com John L. Taylor, BBA, FCIP, CLA Ontario Mutual Insurance Association 350 Pinebush Road, PO Box 3187 Cambridge, ON N3H 4S6 Phone: (519) 622-9220 Fax: (519) 622-9227 E-mail: jtaylor@omia.com DISCIPLINE Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 – 1575 West Georgia St. Vancouver, BC V6G 2V3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 E-mail: pkernaghan@kernaghan.com EDITORIAL Fred Silvestri, BA, CIP NCRS 6725 Airport Road, Suite 300 Mississauga, ON L4V 1V2 Phone: (905) 293-7715 Fax: (866) 278-0310 E-mail: fred.silvestri@srsconnect.com 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 BBCG Claim Services Limited 3660 Hurontario St., Suite 601 Mississauga, ON L5B 3C4 Phone: (905) 279-8880 Fax: (905) 279-5338 E-mail: webaker@bbcg.ca EMERGENCY MEASURES Richard Van Horne Action Investigations Inc. 2 Catelina Court Dartmouth, NS B2X 3G9 Phone: (902) 462- 1222 Fax: (902) 462-3688 E-mail: richardvanhorne@actioninvestigations.ca FINANCE Randy P. LaBrash, CIP, CFE, CFEI Crawford & Company (Canada) Inc. 300 – 191 Lombard Avenue Winnipeg, MB R3B 0X1 Phone: (204) 947-2340 Fax: (204) 943-9168 E-mail: Randy.Labrash@crawco.ca

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 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 IBC: LIAISON, LEGISLATIVE & FORMS David McKeon, CIP McKeon & Associates Adjusting Company 2120 Rathburn Road East, Suite 91 Mississauga, ON L4W 2S8 Phone: (905) 602-0321 Fax: (905) 602-4025 E-mail: david@maaac.ca LICENSING J. Miles O. Barber, B.Comm.

(Hons.), FCIP, CRM Network Adjusters Ltd. 67 Folkestone Blvd.

Winnipeg, MB R3P 0B4 Phone: (204) 897-5793 Fax: (204) 897-5797 E-mail: mbarber@mts.net MEMBERSHIP & QUALIFICATIONS Santo Carbone, CRM, FCIAA Crawford & Company (Canada) Inc. 300-123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 364-6341 Fax: (416) 435-0546 E-mail: santo.carbone@crawco.ca NOMINATING Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 – 1575 West Georgia St. 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 James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca David Porter, LL.B., FCIP, CRM Advance Claims Service Ltd. 206 - 2323 Boundary Road Vancouver, BC V5M 4V8 Phone: (604) 642-0660 Fax: 1-888-452-5246 E-mail: davidp@advanceclaims.com PRIVACY James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Keith P. Edwards, FCILA, CLA, FUEDI-ELAE CIAA Honorary Life Member c/o CIAA National Office 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca

CIAA REGIONAL PRESIDENTS 2010 – 2011 NEWFOUNDLAND & LABRADOR Marcel Pitcher, CIP, CRM Crawford & Company (Canada) Inc. 300 – 44 Torbay Road St. John’s, NL AlA 2G4 Phone: (709) 753-6351 Fax: (709) 753-6129 E-mail: Marcel.Pitcher@crawco.ca NOVA SCOTIA E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca NEW BRUNSWICK & PRINCE EDWARD ISLAND Luc Aucoin, BBA, FCIP Plant Hope Adjusters Ltd. 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: laucoin@planthope.com QUEBEC/AESIQ Elaine Savard, LL.B., FPAA Les Expertises Richard Racette 1090, rue Principale Sainte-Agathe des Monts, PQ J8C 1L6 Phone: (819) 326-0012 Fax: (819) 326-2023 E-mail: elaine.savard@exprr.ca ONTARIO Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3, P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: richard@azclaims.ca MANITOBA Timothy W. Bromley J.P. Hamilton Adjusters Ltd. 125 Enfield Crescent Winnipeg, MB R2H 1A8 Phone: (204) 944-1057 Fax: (204) 944-1606 E-mail: tbromley@mts.net SASKATCHEWAN Lee Dixon Crawford & Company (Canada) Inc. 210 – 227 Primrose Drive Saskatoon, SK S7K 5E4 Phone: (306) 931-1999 Fax: (306) 931-2212 E-mail: Lee.Dixon@crawco.ca WESTERN Bea Boutcher, CIP Horizon Adjusters Ltd. #207, 9814 – 97 Street Grande Prairie, AB T8V 8H5 Phone: (780) 402-8383 Fax: (780) 402-7888 E-mail: bea.boutcher@horizonadjusters.com PACIFIC David Porter, LL.B., FCIP, CRM Advance Claims Service Ltd. 206-2323 Boundary Road Vancouver, BC V5M 4V8 Phone: (604) 642-0660 Fax: 1-888-452-5246 E-mail: davidp@advanceclaims.com

August/September 2011

Claims Canada 57

04/08/11 3:39 PM

• on the scene OTS CIAA New Members — April 29th, 2011 INDIVIDUAL MEMBERSHIP Crawford & Company (Canada) Inc. Desirae Bellisle Brent Daley Robert Michaud Roger Bristow Laura O’hearn Chris Jennings Richard Vaz Jeffrey Attwood Ian Encarnacion Ajay Shukla

St Johns NL Dartmouth, NS Saint John, NB Winnipeg, MB Hamilton, ON Mississauga, ON Mississauga, ON Newmarket, ON Toronto, ON Toronto, ON

Level 3 Level 1 Level 1 Level 3 Level 3 Level 3 Level 3 Level 1 Level 1 Level 3

Courtenay, BC Courtenay, BC

Level 3 Level 3

Peterborough, ON

Level 3

Kernaghan Adjusters Limited Debra K Halstead Bradford W Murray

Claim Xperts Inc. Paul Morin

CIAA New Members — June 15th, 2011 Kernaghan Adjusters hosted a cocktail party on Jun 14 at the Expressionz Cafe in Edmonton. Expressionz Cafe is an entrepreneurial non-profit organization that supports community and the arts. Their venue houses artistic and creative endeavors and is an excellent setting for performances, presentations, rehearsals, workshops, meetings and warm gatherings. The party included the talented musicians of U22 Productions and their founder, Rhea March. l Grant King, the Canadian Independent Adjusters’ Association’s Nova Scotia region president, and Karen DeCoste, the Canadian Insurance Claims Managers’ Association’s Nova Scotia region president, present Dianne Swinamer of Feed Nova Scotia and David McKeage of Brigadoon Children’s Camp Society each with a donation of $5,000. l Grant King, CIAA’s Nova Scotia region president, Luc Aucoin, CIAA’s New Brunswick & Prince Edward Island region president, Mary Charman, CIAA president, and Marcel Pitcher, CIAA’s Newfoundland & Labrador region president, at the CIAA/CICMA Joint Conference on June 22 in Digby, N.S. l Grant King, CIAA’s Nova Scotia region president, presents Mary Charman, CIAA president, with a gift on behalf of the Nova Scotia region chapter during the CIAA/ CICMA Joint Conference on June 22 in Digby. N.S. l

58 Claims Canada

p56,58-59 on the scene2.indd 58

August/September 2011

INDIVIDUAL MEMBERSHIP Crawford & Company (Canada) Inc. Jennifer Fiddler Rannoch Harley

Hamilton, ON Dartmouth, NS

Level 1 Level 1

Toronto, ON

Level 1

Kernaghan Adjusters Limited R. Dean Taylor

CIAA New Members — July 15th, 2011 ABI Claims Adjusters Inc Melanie Levere

Ottawa, ON

Level 3

BBCG Claim Services Limited Trevor Grzybowski

Mississauga, ON

Level 2

Crawford & Company (Canada) Inc. Danna Lewis

Gary Hogan Christine Saunders Carl Beaudoin

Mississauga

Vancouver, BC

Moncton, NB

Dartmouth, NS

Level 3 Level 3 Level 1 Level 3

Horizon Adjusters Ltd. Brandi Bagan Michelle Bainbridge

Grande Prairie, AB Level 1 Grande Prairie, AB Level 1

Maltman Group International Sharon Dawson Steve Snider Stephen Ward

Toronto, ON Toronto, ON Toronto, ON

Level 3 Level 3 Level 3

Townsend & Leedham Adjusters Ltd. Joann Christou Jonathan Lunt

Edmonton, AB Edmonton, AB

Level 3 Level 3

Jan Lindsay is the tenth recipient of the Lee Samis Award of Excellence. Lindsay was presented the award at the Canadian Defence Lawyers (CDL) Annual Meeting — Pirates of the Defence Bar — on Jun 22 in Toronto.

The award is named for the founding president of CDL to recognize exceptional contributions and/or achievements by members of CDL: • to the legal professional in general; or • to jurisprudence in Canada on the law of insurance; or • to law or development of the law of insurance in Canada; or • a significant law-related benefit to the CDL and/or the insurance industry. l www.claimscanada.ca

04/08/11 3:36 PM

Friends, family and colleagues of the late, great Doug Hurlbut came together for Dougstock III — a celebration of his life, friendship and much missed camaraderie. The event, La(r)ger Than Life, was held at the Pilot Tavern on June 3.

Friends and colleagues were treated to stories and memories of Doug, as well as some live music in his honour. l

www.claimscanada.ca

p56,58-59 on the scene2.indd 59

August/September 2011

Claims Canada 59

04/08/11 3:36 PM

• on the scene OTS The Inaugural Belfor Cancer Ride was held on June 24. The industry motorcycle event was organized to help raise funds for the Princess Margaret, Weekend to End Women’s Cancers. The event took riders on a scenic route through Buckhorn and ended in the beautiful town of Bancroft for an overnight stay. Those participants involved helped to raise over $1,500 for the cause.

For anyone interested in participating in next year’s ride please email carri.wells@cal.belfor.com or paul.wilkins@ca.belfor.com. l

60 Claims Canada

p60-61 OTS.indd 60

August/September 2011

www.claimscanada.ca

04/08/11 3:43 PM

The Ontario chapter of the Canadian Insurance Claims Managers Association (CICMA) held its annual golf tournament at the Cardinal Golf Course in Newmarket, Ont. on June 24. This year, 296 golfers participated in the event, raising a total of $26,000 for Camp Oochigeas. The Ontario chapter of the CICMA has been supporting Camp Oochigeas for the past 16 years. The proceeds from the putting content at the tournament were donated to the Douglas N. Hurlbut Award, a total of $750. l

With our extended hours you can noW sleep bet ter at night.

When night falls you want your protection to go up. That’s why we’ve introduced STRONE After Hours DIRECT. It’s your direct connection to a dedicated STRONE customer service representative from 5:00PM to 10:00PM, Monday to Friday, and Saturdays from 8:30AM to 5:00PM. They’ll immediately coordinate and manage your request and you can count on professional, dependable and courteous service. To access STRONE After Hours DIRECT, please contact your local branch or call 1-866-877-5834 today.

www.claimscanada.ca

p60-61 OTS.indd 61

August/September 2011

Claims Canada 61

04/08/11 3:43 PM

• on the scene OTS Winmar celebrated the grand re-opening of its Oakville/Mississauga office in a new location. MPP Kevin Flynn, Mayor Rob Burton, Cathy Duddeck, regional and town councillor, Pam Damoff, town councilor, John Sawyer, president of the Oakville Chamber of Commerce, Wendy Rinella, member of the board of the Oakville Chamber of Commerce, John White, co-founder of Winmar, and Mike White, owner/manager of the Oakville/Mississauga location, were on-hand for the official ribbon cutting ceremony. The new location is at 1158 South Service Road in Oakville, Ont. l

62 Claims Canada

p62 On The Scene.indd 62

August/September 2011

www.claimscanada.ca

04/08/11 4:05 PM

Confidence.

Choose your repair partner with confidence.

Enjoy complete peace-of-mind every time you recommend a CSN facility to your policyholders, knowing they will have a reliable and hassle-free repair experience. Have confidence that our highly qualified collision repair specialists, and our reputable facilities, will always deliver on the promise. It is a promise to provide an honest, quality repair that is built on confidence, trust and integrity.

Your policyholders reap the benefit of a National Lifetime Warranty on all repairs thanks to our CSN network of leading collision repair facilities across the country.

Confidence. Trust. Integrity. www.csninc.ca

Announcing_Ad_Canadian_Underwriter FINAL_Outlined NO CODE.indd 1

28/06/11 1:17 PM