Claims Canada August/September 2015 by Annex Business Media

www.claimscanada.ca

October/November 2015

What is this

Official Journal of the Canadian Indeépendent Adjusters’ Association

THING?

Claims, connectivity and the Internet of Things

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Contents OCTOBER / NOVEMBER 2015 • VOLUME 9 • NUMBER

Cover Feature

12 WHAT IS THIS THING?

The Internet of Things has the potential to blend connectivity with insurance claims. Think of it as a bridge between the old economy of bricks, mortar and physical objects and the new economy of mobile devices, data networks and analytic engines. It’s estimated that billions of “things” will be linked to the Internet within the next five years through sensors located in cars, homes and businesses. How will this connected world affect loss adjusters, insurance companies and the entire claims management process?

12 30

BY CRAIG HARRIS

Spotlight

20 The Path Forward

For former CIAA president Fred Plant, it’s “déjà vu all over again,” as he takes the mantle of the national association for independent insurance adjusters. BY CRAIG HARRIS

Education Forum

36 Share and Share Alike

Claims arising out of “shared economy” companies like Uber and Airbnb are anything but simple for today’s adjusters.

News Features

28 Reducing Loss Through Restoration

A look at equipment restoration and its effect on commercial claims across Canada. BY DANNY FUNG

30 Getting the Lead Out What are the implications of lead paint liability for Canadian insurance coverage? BY HEATHER SANDERSON

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32 The “Derivative” Claim

A recent Alberta court decision suggests that insurers should tread carefully on coverage involving intentional acts and negligence. BY DONALD MCGARVEY and KATE WHITTLETON

34 Driver ID

Discovering the actual sequence of events in a car accident can be a surprisingly difficult task. BY JEAN-FRANCOIS GOULET

Departments 4 First Notice 38 On The Scene

Columns

10 President’s Message 36 Education Forum

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• first notice FN

Auto AB loss ratios highest since 2010: A.M. Best The loss ratio, in personal accident benefits for Canadian private auto insurers, rose sharply in 2014, but changes made in Ontario are starting to work their way through the system, an analyst from A.M. Best Company Inc. told insurance professionals September 24 in Toronto at its annual Insurance Market Briefing. Joel Silverthorn, senior financial analyst for Oldwick, N .J.-based A.M. Best, alluded to several measures taken by the Ontario government which were intended to help reduce auto insurers’ expenses. One was Bill 15, an omnibus bill passed into law in N ovember, 2014. Another was the 2015-16 budget document - released last April – in which the ruling Liberals promised to reduce the mandatory accident benefits coverage limits to $65,000 (including attendant care), to reduce the catastrophic impairment coverage and to change the criteria for catastrophic impairment. Those measures “had some anti-fraud as well as some other initiatives to help the expense side, because as rates were brought down, the promise from the government was, ‘We will help you on the expense side,’” Silverthorn said. “That’s working its way through and that’s going to be something everyone is holding their breath with.”

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He referred to Ontario’s Automobile Insurance Rate Stabilization Act (AIRSA), which took effect in August 2013. That law established an industry-wide target reduction, by 15% within two years, of the “average of the authorized rates that may be charged by insurers” for private passenger auto, with a two-year target. In a report on the Canadian market, A.M. Best noted that the industry-wide loss ratios, among private insurers, in auto personal accident, were 143.3% in 2010, 74.3% in 2011, 50.4% in 2012, 67% in 2013 and 82.3% in 2014. Loss ratios in auto liability were 69% in 2010, 82.5% in 2011, 88.6% in 2012, 77.4% in 2013 and 73.5% in 2014. In Ontario, several changes will take effect for accidents occurring on or after June 1, 2016. Currently, mandatory coverage, for catastrophic injuries, includes $1 million in medical and rehabilitation benefits and another $1 million in attendant care coverage. This will change to one $1-million limit for attendant care and medical/rehab. For non-catastrophic injuries, the coverage limits will be reduced to $65,000 limit for medical/rehab and attendant care. l

Cyber insurance market poised for growth The global demand for cyber insurance presents a huge commercial opportunity for insurers and reinsurers – estimated to be at least US$7.5 billion by the end of the decade – but with that opportunity comes risks that could be potentially devastating, notes a new paper from PricewaterhouseCoopers LLP (PwC). Insurance 2020 & beyond: Reaping the dividends of cyber resilience explores how cyber insurance could be a more sustainable venture that offers real protection for clients, while safeguarding insurers and reinsurers against damaging losses. It estimates the largely untapped cyber insurance market could increase from about US$2.5 billion in premium written in 2014 to US$5 billion in annual premiums by 2018 and at least US$7.5 billion by 2020. “Even in the more penetrated U.S. market, only around a third of companies have some form of cyber coverage,” states the PwC paper, released in September at the Monte Carlo Reinsurance Rendez-vous. “There is also a wide variation in take-up by industry, with only 5% of manufacturing companies in the U.S. holding standalone cyber insurance compared to around 50% in the healthcare, technology and retail sectors,” PwC states. PwC expects that “cyber insurance capacity will continue to increase over the next few years, which is likely to put pressure on premium rates and encourage some insurers to relax limits, exclusions and other terms and conditions as they compete for business,” the paper notes. l

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Allstate survey shows Canadians not sold on UBI

The potential benefits of usage-based insurance (UBI) – including safer driving behaviour – have long been touted, but survey results released in late September by Allstate Insurance Company of Canada show consumers have not necessarily bought into the value of a UBI program. Conducted by Leger on behalf of Allstate Canada, the online survey found that significant confusion exists among respondents about the potential benefits of UBI – which involves in-vehicle telematics devices measuring driver habits, such as hard braking – the impact of invehicle telematics on insurance premiums, and how auto insurance companies handle the participant privacy and data. The quantitative online survey involved 1,456 Canadians, with field work done in August using Leger’s online panel, LegerWeb, notes a statement from Allstate Canada, which produces and distributes home and auto insurance prod-

Claims Canada

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ucts, including UBI. The company notes that many Canadians have embraced new automotive technology offerings because of perceived benefits, but this has not extended to UBI, which can lead to lower premiums reflective of driving habits. That skepticism may be having a negative impact on UBI’s adoption, Allstate Canada reports, citing some misconceptions among respondents on advanced auto insurance options. Survey results show just 41% of respondents report they feel the biggest potential benefit of participating in a UBI program would be earning a discount on their rates, while 34% of those polled do not see any potential advantage. With regard to perception on how UBI can infl ence insurance rates, the survey reveals 26% of respondents say they feel their rates could increase, 26% feel their rates could decrease, and 31% feel their rates would remain unchanged. l

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E-commerce a key priority for insurers: study More than three-quarters of surveyed property and casualty (P&C) and life insurers identified the need to have effective web or e-commerce strategies as the number one trend affecting the industry, according to a joint study conducted by Gartner, Inc. and ACORD. The survey of 104 insurance leaders in Canada, the United States and the United Kingdom was conducted in the second quarter of 2015 by Gartner and the nonprofit insurance industry standards association ACORD (Association for Cooperative Operations Research and Development). It found that 78% of those surveyed identified the need to have effective web/ecommerce strategies as the number one trend having the greatest impact on the industry. “Many companies have e-commerce as a leading initiative within their digital insurance strategies and are looking to increase their touch with customers through a variety of web strategies such as improved e-service sites, interactive websites and social media interactions,” Stamford, Conn.-based Gartner added in a press release. The second industry trend projected to have the largest impact on business strategy and vision was the greater need for cyber security practices and procedures, with more than three-quarters of respondents stating that it had a “significant” or “moderate” impact. This was followed by big data/ analytics. l

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New flood map program launched in Canada

Flood Risk Canada, Inc. (FRC) has launched a new program designed to allow insurers, lenders and property owners to receive accurate and current flood hazard and flood risk data for commercial, residential and mixed-use properties in Canada. FRC reports the new flood maps in its Flood Hazard Mapping Program (FHMP) will help with determining a property’s actual flood risk and will also allow the identification of higher risk flood areas, such that the location-specific mitigation measures can be prioritized, notes a statement from the company in late September. The maps incorporate most current data on water flow, storm tides, rainfall, drainage flooding, snow melting, leave break flooding and climate change, adds the company, a provider of smart flood risk assessment and prevention solutions for commercial property, focusing on true flood risk exposure, uninsured losses and liability. “Our goal is to provide precise flood risk measurement tool that insurers, lenders and real estate developers, owners, operators, as well as asset and real estate investment management companies can use to reduce the possibility of flood loss and accurately assess the risk of flood of their properties,” Stephen Gill, partner and CEO of Flood Risk Canada, says in the statement. l

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• first notice FN

Canada second largest energy insurance market in world

Canada was the second largest energy and power insurance market in the world with US$1.77 billion in premiums in 2014, suggests new research from Finaccord, a market research, publishing and consulting company specializing in financial services. Finaccord’s study - Global Energy and Power Insurance: A Worldwide Review – found that energy and power insurance premiums worldwide, including business handled by captive and mutual insurers, amounted to approximately US$23.56 billion in 2014. This increased from about US$21.48 billion in 2010 – equivalent to a compound annual growth rate in nominal terms of 2.3%. In 2014, this total market segmented between approximately US$14.16 billion from energy insurance premiums and about US$9.40 billion from power insurance premiums, with the United States “by far the largest market at around US$8.38 billion, followed by Canada at US$1.77 billion and China at US$1.45 billion,” Finaccord said in a statement. With regards to energy insurance premiums, in particular, these

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

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Produced by the publishers of Canadian Underwriter magazine

A bi-monthly magazine (6x per year), Claims Canada is published by NEWCOM Business Media Inc. is located at: 80 Valleybrook Drive, Toronto, ON, M3B 2S9. Claims Canada magazine is the Official Publication of the Canadian Independent Adjusters’ Association [CIAA] and through its editorial content and circulation brings together the ‘entire property & casualty insurance claims market nationally’ with information and insight into the profession, business and people of insurance claims and loss adjusting. All key claims process stakeholders are reached as part of our readership community – including: both CIAA member and non-member independent claims adjusting firms; insurance and reinsurance company executive, claims management

broke down between around US$7.15 billion from upstream insurance, around US$2.17 billion from midstream insurance and around US$4.84 billion from downstream insurance. Territories in scope included Brazil, Canada, China, France, the GCC countries (i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates), Germany, Japan, N igeria, the United Kingdom and the United Sates, “with the rest of the world expressed as a residual balance in the overview report for both energy and power insurance,” the statement said. “At the global level, upstream energy insurance premiums have been growing at twice the rate of midstream premiums, while downstream premiums actually declined between 2010 and 2014,” said Finaccord consultant Christian von Celsing. in the statement. “The more rapid increase in the value of the upstream segment can be attributed to rising exploration and production worldwide. On the other hand, it is generally the case that insurance pricing for downstream assets has been subject to the most pressure.” l

Claims Canada

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October/November 2015

Elliot Ford Account Manager eford@canadianunderwriter.ca (416) 510-5117 Christine Giovis Account Manager (416) 510-5114 christine@canadianunderwriter.ca Mike Wells Account Manager • (416) 510-5122 mike@canadianunderwriter.ca

and claims adjusting personnel; corporate risk managers and loss control professionals; insurance brokers; insurance law firms; forensic engineers and accountants; appraisal, restoration, rehabilitation and collision repair professionals; Insurance Institute chapters; insurance associations, regulators and related claims market recipients. The contents of this publication may not be reproduced or transmitted in any form, either in part or in full, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent.

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Message from the President La Plume du Président FRED PLANT

Ours is a honourable profession. You should be proud of the important work you do everyday – delivering the product of the Property & Casualty Insurance Industry in Canada. We have all heard it said that nothing works without insurance. No planes fly, no buildings are built, no food is produced; even a pumpkin tossing event was cancelled this fall due to the unavailability of insurance. None of the insurance cover that allows our modern world to spin would be possible were it not for the men and women around the world who, like CIAA members across Canada, deal with the multitude of claims that emanate from all that insurance coverage. There are few, if any, P&C insurers in Canada who do not call on independent adjusters to help deliver on the promises embedded in their policies. Some insurers engage independents routinely – to the extent of being a significant component of their operation. Others retain us only when claim volumes exceed inhouse capacity or when a catastrophic event occurs. When the CATs hit, we are everyone’s best friend. Although independent adjusters provide a vital service, many across the country are questioning the relationship they have with their insurer customers. Rather than feeling valued, respected and encouraged to perform at the top of their game, some are concerned for the future of their profession. The insurers’ quest for ever-improved bottom-line results through expense reduction has transformed adjusting to much less than it ever was. The measure of loss adjustment success may be more about compliance with process and less about investigation and indemnity. In conversation with adjusters across Canada I sense the fabric of the insurer/adjuster relationship is being stretched thin. However, it is not torn. And it is on every one of us to engage our customers to ensure the value of our service is realized and respected. This is a conversation that needs to take place and that has to start now. Get involved and be part of it. There is a lot to talk about. One thing we have to be careful of is to avoid the discussion descending into a détente of entrenched positions. As adjusters, we can’t simply say: “here is what we’ve decided to offer you.” By the same token, insurance companies cannot dictate an environment of impossibly thin margins, flat rates and shortcuts that would require us to compromise our professional integrity. Such paths are certain dead ends. If, however, our conversation is built on a collaborative model, I think it will be a very productive dialogue. As independent adjusters, we have to listen to what insurers truly need, how and 10 Claims Canada

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Notre profession est honorable. Vous devriez être fiers du travail important que vous accomplissez chaque jour, c’est-à-dire d’offrir le produit du secteur de l’assurance de dommages au Canada. Nous avons tous déjà entendu dire que rien ne fonctionne sans assurance. Aucun avion ne vole, aucun immeuble n’est bâti, aucun aliment n’est produit; même un événement organisé pour lancer des citrouilles a dû être annulé cet automne en raison du fait qu’aucune assurance n’était disponible. Aucune garantie d’assurance qui permet à notre planète moderne de tourner n’existerait si ce n’était des hommes et des femmes de partout dans le monde qui, comme les membres de l’ACEI d’un bout à l’autre du Canada, traitent la multitude de réclamations qui émanent de tout ce qui est offert par cette protection d’assurance. Le nombre d’entreprises en assurance de dommages au Canada qui ne font pas appel à des experts en sinistres indépendants, afin de les aider à mettre en pratique les promesses comprises dans leurs politiques, est très limité, si même il y en a. Certains assureurs ont recours aux services d’experts indépendants de façon courante. Au point même où ceux-ci font partie intégrante de leur fonctionnement. D’autres nous consultent uniquement lorsque le volume des réclamations va au-delà de la capacité ou quand un événement catastrophique se produit. Lorsque des catastrophes surviennent, nous sommes le meilleur ami de tous. Bien que les experts en sinistres indépendants offrent un service essentiel, nombreux sont ceux au pays qui s’interrogent au sujet du lien qu’ils ont avec leurs clients assureurs. Plutôt que de se sentir valorisés, respectés et encouragés à donner le meilleur d’eux-mêmes, certains sont inquiets pour l’avenir de leur profession. Étant donné que les assureurs cherchent toujours à améliorer les résultats finaux en visant une diminution des dépenses, cela a eu pour effet de réduire le travail des experts en sinistres à un point plus bas que jamais. L’évaluation du succès relié à la perte concernant cette expertise touche peut-être plus la conformité quant au processus que les questions entourant l’enquête et l’indemnité. En discutant avec des experts en sinistres d’un bout à l’autre du Canada, je constate que le lien entre les assureurs et les experts en sinistres a été très affecté. Cependant, il existe toujours. La responsabilité incombe à chacun de nous de discuter avec nos clients afin de veiller à ce que la valeur du service que nous offrons soit bien concrète et respectée. Cette conversation s’avère nécessaire et elle doit commencer dès maintenant. Impliquez-vous et faites-en partie. Le sujet est très vaste. L’un des éléments auxquels nous devons faire attention est d’éviter que la discussion tombe vers des positions bien arrêtées. En tant qu’experts en sinistres, nous ne pouvons pas simplement dire : « Voici ce que nous avons décidé de vous offrir ». Dans ce même ordre d’idée, les compagnies d’assurance ne peuvent pas imposer un milieu de marges invraisemblables, de taux fixes et de raccourcis qui nécessiteraient que nous compromettions notre intégrité professionnelle. De telles options sont assurément sans issue. Si, toutefois, notre conversation est fondée sur un modèle de collaboration, je crois que le dialogue sera très fructueux. En tant qu’experts en sinistres indépendants, nous devons bien écouter pour connaître quels sont les vrais besoins des assureurs, déterminer de quelle façon et si ces www.claimscanada.ca

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if those needs have changed and how we can respond to those needs. Insurers need to understand that if they want reliable and ongoing access to a quality service, there are costs associated with this service. That means proper staffing, training, professional development and investment in technology. In other words, independent adjusting should be looked at as an investment in the long-term, not merely a cost in the shortterm. At CIAA, we take this investment in the future of independent adjusting very seriously. That is one of the reasons we have developed a strategic plan that will guide us through the years ahead. Under the leadership of Patti Kernaghan we are continuing with the National Insurance Industry Advisory Board, which provides an excellent foundation for direct discussions between top insurer officials and CIAA members. I am honoured to take the baton from CIAA’s previous president, Albert Poon, who played a vital role in developing and guiding our strategic plan. Thanks for all you have given back to our profession, Albert. For me, I pose a challenge to all individual independent adjusters and members of CIAA to engage their insurance company partners on issues of alignment, respect and mutual interests. In September 2016, my home province of New Brunswick will host the CIAA’s Annual General Meeting in beautiful St. Andrews By-the-Sea. I encourage all members to plan to attend and be part of the continuing conversation that will lead to the betterment of independent adjusting in Canada and, with that, the betterment of our overall P&C insurance industry. n

besoins ont changé, ainsi que comment nous pouvons répondre à ceux-ci. Les assureurs doivent comprendre que s’ils veulent avoir un accès fiable et continu pour obtenir un service de qualité, ils devront forcément payer les coûts qui sont associés à celui-ci. Cela signifie qu’il faut avoir un nombre suffisant de membres du personnel, offrir une formation adéquate, encourager le perfectionnement professionnel et investir dans la technologie. Autrement dit, on devrait considérer le travail des experts en sinistres comme étant un investissement à long terme, et non seulement un coût à court terme. À l’ACEI, nous prenons très au sérieux cet investissement pour l’avenir du travail des experts en sinistres indépendants. Il s’agit de l’une des raisons qui expliquent pourquoi nous avons mis au point un plan stratégique qui nous servira de guide au fil des années à venir. Sous la direction de Patti Kernaghan, nous poursuivons notre entente avec le Conseil consultatif national de l’industrie de l’assurance, qui fournit une excellente base pour susciter des discussions directes entre les principaux responsables des assurances et les membres de l’ACEI. Je suis honoré de succéder à l’ancien président de l’ACEI, Albert Poon, qui a joué un rôle prépondérant quant à l’élaboration et l’orientation de notre plan stratégique. Merci pour tout ce que vous avez légué à notre profession, Albert. Pour ma part, je lance le défi à tous les experts en sinistres indépendants et aux membres de l’ACEI, afin que ceux-ci établissent un lien avec leurs partenaires au sein des compagnies d’assurance quant aux questions de concordance, de respect et d’intérêts mutuels. En septembre 2016, ma province natale du Nouveau-Brunswick accueillera l’assemblée générale annuelle de l’ACEI dans le décor enchanteur de St. Andrews by-the-Sea. J’invite tous les membres à prévoir d’assister à cette rencontre et de prendre part à la conversation en cours qui mènera à une amélioration du travail des experts en sinistres indépendants au Canada et, de ce fait, à l’amélioration de l’ensemble de notre industrie de l’assurance de dommages. n

NATIONAL EXECUTIVE 2015 2014 - 2016 2015 President Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca 1st Vice-President Heather Matthews, CIP, CRM Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca 2nd Vice-President Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA, FIFAA AMG Claims Inc. P.O. Box 20102 Sherwood Charlottetown, PE C1A 9E3 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca Secret ar y Monica Kuzyk, FCIP, CRM Curo Claims Services 125 Northfield Dr. W., P.O. Box 218 Waterloo, ON N2J 3Z9 Phone: (866) 952-2876 Fax: (519) 888-9704 E-mail: mkuzyk@curocanada.com

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T reasurer John D. Seyler, CIP Integrated Insurance Resources 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@integrated-ins.ca Past -President Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com Executi ve D irector 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

D irector Paul Feron, FCIP, CRM ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2 Phone: (519) 645-6500 Fax: (519) 645-2250 E-mail: paul.feron@scm.ca D irector Lorri Frederick ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (905) 308-6292 Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca D irector James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca D irector 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

D irector John Jones, BA Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: jjones@cl-na.com D irector Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com D irector Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Ph: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com D irector Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Ph: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com

October/November 2015

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• cover story

What is this

THING?

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hen it comes to the “next big thing” in technology, it’s fair to ask whether it is merely a futuristic vision or imminent reality. In the case of the Internet of Things (IoT), the answer is both. There are already plentiful examples of the IoT in action. In a recent report, The Internet of Things and Property/Casualty Insurance: Can an Old Industry Learn New Tricks?, research firm Celent defines it as the integration of three components: physical objects with networked sensors, transmission of information to data stores and analytic engines that examine the data and provide a feedback loop. Industries ranging from agriculture to automotive to appliance manufacturing have installed devices that continuously monitor the functioning of equipment and send data to a source for analysis and action. In insurance, there is potential for IoT in streamlining the claims handling process and improving customer satisfaction, according to Dale Avis, vice president, information technology and chief information officer for Crawford & Company (Canada) Inc. www.claimscanada.ca

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“There are a number of benefits to be realized by the evolution of IoT in claims handling,” Avis notes. “Built-in sensors or devices will have the capability to provide automated loss notification or identify a potentially hazardous situation. The primary benefit of IoT in claims handling is increased insured satisfaction through the ability to transmit claims status between the insurer and the insured almost instantaneously.” The p&c industry insures a lot of “things.” Gartner estimates that the IoT will include 26 billion units installed by 2020, and by that time, IoT product and service suppliers will generate revenue exceeding $300 billion globally. According to Cisco research, over 50 billion devices will be connected to the Internet by 2020. Whatever the number, all of those devices will be generating various forms of data – numerical, text, audio, video. Closer to home, spending on IoT is set to take off in Canada in 2015, according to a recent forecast by International Data Corporation (IDC). It projects that investments in this area will reach $6.5 billion by 2018, particularly in the “fastest-growing sectors” of consumer, manufacturing and insurance.

“The Internet of Things will change the way all of us operate in the world,” notes Patti Kernaghan, president and CEO of Kernaghan Adjusters. “Data analytics will help bring the industry forward into that world. The issue is how we manage the data, that we accept the conclusions that the analytics will point us towards, and that we’re prepared to take action.”

Dipping Toes into IoT Waters According to the consulting firm Stategy Meets Action, many insurers are already dipping their toes into IoT waters. In a recent study of emerging technologies, it found that 20 per cent of insurers surveyed were currently piloting, testing or deploying IoT projects. That number rose to 50 per cent over a three-year future timeframe. In an increasingly gadget oriented society where personal and commercial lines consumers demand mobility, remote access and interaction between devices, the connectivity push will only continue. This trend will be compounded by the relatively new capacity to monitor virtually anything – checking a person’s heartbeat or temperature

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with wearable technology, unlocking doors with mobile devices, tracking (or controlling) car movement with sensors, remotely monitoring complex building systems for heating, ventilation and air conditioning (HVAC), security, smoke detection/fire. “Telematics, mobile and wearables – all provide ways to capture even more real time data about the customer and perils,” note Mukul Ahuja, a senior manager with Monitor Deloitte focusing on the property and casualty insurance

sector. “Especially in auto insurance, where UBI (usage based insurance) has long been a dream, these technologies have helped not only accurately determine risk but also reduce claims by improving safety. More connected homes and cars allow for capture of personalized driving patterns, track our movement patterns and so on to determine risk more accurately.” The space-age predictions of the connected home, driverless car, smart

If you’re in Manitoba, this is considered an automobile. Surprised? ARC isn’t.

cities, self-monitoring commercial building or machinery suddenly don’t seem that far off. The IoT opens up a world of opportunities, and a potentially disruptive environment, for the insurance industry. One of the key questions – will any of this help loss adjusters or insurance companies in the claims management process? There are some key areas, such as vehicle telematics, connected homes and smart commercial buildings, that could yield improvements in data accuracy, investigation and loss control.

If you’re in Manitoba, this is considered an automobile. Vehicle Telematics Tangible Surprised? ARC isn’t. Example

A tangible example of IoT in the insurance world is vehicle telematics. According to Towers Watson, the pace ARCof Group Canadaof is ausage-based national insurance adoption network of independent (UBI) telematicslaw hasfirms, accelerated expoeach intimately connected to nentially their in Canada in the last year. A local market. recent survey from the consulting comInsurance and risk management pany showed that 56 per cent of Canadiexperts. Regional strength. ans expressed a “strong interest” in buyNational scope. ing a UBI policy, mainly for premium That is the ARC Group. discounts. Go to AskARC.com Currently, there are 11 insurers with approved usage-based auto insurance Go to AskARC.com plans approved by the Financial Services Commission of Ontario (FSCO). These range from established players, such as Desjardins (Ajusto), The Co-operators (en-route) and Intact Financial (my Driving Discount) to new entrants like UK-based Ingenie. Other provinces, such as Quebec, also have UBI programs in place, while jurisdictions like Alberta are still establishing criteria for implementation. A recent report from business intelligence firm visiongain estimates that over ARC Group Canada is a national network of independent law firms, each intimately connected to their local market. $60 billion of auto insurance premiums globally will be generated by the UBI Insurance and risk management experts. Regional strength. National scope. Go to AskARC.com market by 2020. It noted that the number of UBI policyholders worldwide jumped from 12.2 million in 2014 to 21.7 million in 2015. Vehicle sensor devices have vast poThe ARC Legal Reporter tential Winter Issue – Articlein#1providing services other than A National Network of Independent Law Firms just insurance discounts, according to some sources. So far, the claims component has remained largely untapped. When is a medical examination considered a second examination under Rule 36 of the New Brunswick Rules of Court? “One of the key areas we are seeing movement is the desire for telematics The ARC Legal Reporter Blyth v. Crowther and Kelly Reported Case: providers to integrate with the claims Winter IssueCitation: – Article #1 2009 NBCA 80 process, to and provide that loss data right When both the plaintiff’s physical and mental condition are in issue in an action, At Issue: the plaintiff undergoes a physical examination, will a subsequent application for a from FNOL in a real-time fashion,” says psychiatric examination be considered an application for a second medical examination? Alex Watson, manager, insurance conYour customer has a list of the vehicles that are covered by your fleet policy. You have a list of the vehicles that are covered by ARC Group Canada is a national that policy. network of independent law firms, And your lists aren’t theintimately same. each connected to their local market. When the one vehicle that is involved in Insurance risk appear management an accident is the one thatand doesn’t on experts. Regionalnext? strength. both lists, do you know what happens National scope. ARC does. That is the ARC Group.

endent Law Firms

cal examination considered a second examination ule 36 of the New Brunswick Rules of The Court? Court: 14 Claims Canada

ARC_Fleet ad_1/2 page.indd 1

October/November Judgment Rendered: Factual Summary:

Should medical examinations that are ordered as part of the discovery process be characterized as ‘independent’ medical examinations? Court of Appeal of New Brunswick 2015 October 13, 2009 (Reasons delivered November 2015-02-14 26, 2009) 1:05 PM The plaintiff suffered injuries in a motor vehicle accident and commenced an action seeking damages. Both the plaintiff’s physical state and mental state were in issue in the action. The plaintiff submitted to a physical examination by the defendant’s expert, but subsequently refused to submit to a psychiatric examination.

th v. Crowther and Kelly 09 NBCA 80 en both the plaintiff’s physical and mental condition are in issue in an action, and The adefendant made a motion requesting an order that the plaintiff submit to the plaintiff undergoes a physical examination, will a subsequent application for p12-19 COVER STORY.indd 14 psychiatric examination. The motions judge granted the order. The plaintiff appealed, chiatric examination be considered an application for a second medical

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sulting practice, Deloitte. “It is evolving from just using that data to better price and underwrite risk to providing that quality of information and better understanding of the loss from the onset, versus the traditional way of gathering witness statements, taking information from the claimant.” Watson notes that while traditional claims gathering techniques will still be relevant, telematics data will increase in importance.

Claims Gathering Techniques “Telematics providers are able to geolocate to an exact longitude and latitude of where the loss occurred, potentially identify the impact of the accident on the vehicle, the speed, and so on,” he observes. “Whereas a lot of the information in the past has been second-hand based on the claimant’s perceptions or witness statements. Gathering that (telematics) data and increasing that quality upfront will help facilitate the speed to close on particular losses.” There are, however, stumbling blocks in integrating vehicle data into the claims handling process. One concern is that most of the insurance companies using telematics have outsourced their usage-based insurance programs to third party vendors. Insurers generally don’t own or control the data, except as noted by contract or agreement. Without direct or real-time access to data, claims or loss management will be limited. The second obstacle is the relatively slow pace of regulatory change around the use of telematics data. For example, FSCO does not currently permit the use of this information for claims-related activity. “From a FSCO perspective, let’s only look at discounts for now,” said Bruce Green, senior manager of rates and classifications for FSCO, at a 2014 telematics conference in Toronto. “That means no mid-term re-rating; not using it for nonrenewal or varying the term of a policy; and not using it for claim-related purposes at this time.” Even with these challenges, it’s clear that connectivity, sensors and data analytics are coming fast to the world of cars. Autonomous vehicles represent the next generation of automotive IoT technology set to impact the insurance industry. With automakers from Ford to Toyota to Volvo (not to mention tech giant Google) experimenting with and testing driverless cars, many project that 16 Claims Canada

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According to an Accenture report, The Connected Home – New Opportunities for Property & Casualty Insurers, the global connected home market is expected to reach $235 billion by 2016. this innovation could be a reality within the next five or ten years. A report released in September 2015 by marketing and research company Navigant suggests that annual sales of autonomous-capable vehicles could reach 85 million by 2035. The industry consensus is that more comprehensive self-driving features will be brought to market by 2020, the study’s executive summary said, adding that such features will enable more complex automated driving, but still require some supervision by a competent driver. Either way, there will be implications for insurers. “Autonomous and semi-autonomous cars will fundamentally alter the nature of driving and the insurance industry’s business model,” David Powell, Lloyd’s Market Association’s (LMA) non-marine manager, told an audience of Lloyd’s underwriters and claim experts in London, UK in July 2015. “These vehicles mean

October/November 2015

fewer collisions, which will take place at lower speeds. Removing the driver removes eight-out-of-ten of the most common causes of vehicle accidents.”

The Connected Home The “connected home” has also seen a spate of recent activity, with some suggesting this is an area ripe with opportunity for personal property insurers. According to an Accenture report, The Connected Home – New Opportunities for Property & Casualty Insurers, the global connected home market is expected to reach $235 billion by 2016. “For insurers, the IoT can provide value in the form of new insurance models and products—based on deeper insight into the customer’s needs—and a higher level of customer satisfaction derived from dynamic risk monitoring and improved claims handling,” Accenture stated in the study. www.claimscanada.ca

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In June 2014, American Family Insurance and Microsoft launched a “business accelerator” for tech startup firms focused on home automation. American Family Insurance, the eighth largest homeowners’ insurer in the U.S., will provide industry experience, consumer insights and homeowner knowledge to companies focused on building safer and smarter homes, according to a press release. Lat year, Google also purchased Nest Labs, a maker of “smart” thermostats and smoke alarms, for a reported $3.2 billion. Analysts noted that the acquisition, the second biggest by Google since buying Motorola Mobility, marked the Internet firm’s foray into the next generation of smart home devices, including sensors and networks for remotely controlled appliances, door locks and other everyday objects. Lost in the shuffle of the iPhone 6 release and the wearable technology of the iWatch, Apple also unveiled HomeKit, its iOS-based protocol for hooking up connected gadgets in the home. Other software companies have jumped on board, including August Smart Lock, an electronic lock that provides keyless entry into the home through Apple mobile devices. What does this mean for personal property insurers? The information coming from the next generation of Internet-connected devices will provide a slew of data to insurance companies. Is the home well maintained? Is it secure? Is there a consistent temperature level? Are there moisture detection devices in basements and around washing machines and dishwashers? Are there advanced smoke and carbon dioxide detectors? As an example, Accenture suggests that “the insurer— either in partnership with a security provider, or on its own initiative—can offer a data recorder that can be installed in the home to track temperature, humidity, wind speed and mechanical vibrations as they affect the house. At least one insurer has already filed a patent for such a home sensor system.”

Relevance to Claims Handling

key areas for attention,” Accenture noted in its study. “In some cases, business and/or operating model changes may be needed to support the new inflows of data.” Claim reduction is a huge potential payoff for IoT for homeowner insurers, according to Accenture. “As the use of in-home systems and devices becomes more widespread, insurers should set optimal targets for reductions in the number and size

of losses,” the consulting firm noted in the report. “One possibility is to explore how to leverage current commercial lines loss mitigation programs as connected home data makes it more practical and efficient to offer lower-premium (and lower- exposure) homeowner products.” Others concur that loss mitigation could be a key outcome in the emergence of IoT. “Overall, I would expect that the impact of IoT will lead to a reduction in the frequency, as well as

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The trick will be how to make this data relevant to the actual claims handling, as well as rating and underwriting, process for the insurance industry. “The application of new data to claims processes and the integration of raw data into core policy and claims systems are www.claimscanada.ca

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? severity, of claims,” Avis remarks. ”Advancements in technology will facilitate an overall safer environment, as well as a faster reaction when a loss occurs.” The potential of IoT in loss mitigation may be even greater in commercial lines for property, machinery and equipment. Many larger buildings already have sophisticated operational systems in place that monitor HVAC, security, fire/smoke detection, sprinkler systems. In most cases, that data is already being collected and examined, at least by the owners or building management companies. Loss prevention and risk management represent areas of potential advantage for commercial clients. “By definition, you have hard-headed business people who may be risk managers or have a financial interest in lowering risk costs,” says Donald Light, an insurance analyst and author of the Celent report. “The IoT value proposition for buildings, operations, general liability, security – these are all areas that companies are very receptive to in terms of improved loss control.”

Smart Commercial Buildings “The advent of smart commercial buildings will eliminate the need for building managers to total a stated insurable value by listing everything on its premises,” notes Paul Bermingham, ex18 Claims Canada

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The real questions are how long it will take for sensor-equipped devices to be widely installed in homes, cars and businesses and whether the ensuing data will be useful for underwriting, pricing and claims/loss control. ecutive director of claims at Xchanging Claims Services in an October 2014 article in the publication Risk & Insurance. “Instead, property premiums can be automatically tallied by connecting the insurance company to the building’s central smart hub, which houses all of the data such as air quality and temperature,” Bermingham observed. “Access to security systems, sprinklers, and disaster recovery plans in one location provides a much crisper insurance profile than just relying on raw building and cost data.” Beyond cars and buildings, there are specific aspects of the IoT that are rel-

October/November 2015

evant to loss adjusters and claims management practices. A key area of exploration is the use of drones, according to Avis. He notes that Crawford & Company (Canada) Inc. is currently in the process of testing a prototype and evaluating methods of implementing drone technology into its claims handling practices. “Drone technology is (an) example of real life application of the IoT,” Avis remarks. “These aerial devices serve as the eyes of an adjuster, enabling them to remotely access and capture images and photographs of a loss site that may be difficult or unsafe to enter. The bird’seye view captures vital footage, enabling a claims professional to properly survey and assess the extent of damage. Through remote access capabilities, this information can be fed to a separate location enabling the claims professional to prepare an initial report and a scope of loss, and to survey damages and submit them directly to the insurer.”

Drones, Geo-Tracking and Fraud Geo-tracking of adjuster personnel – identifying a person’s current, physical location by obtaining GPS data from their smartphones or other GPSenabled devices – is another key feature of the IoT that could yield big gains in www.claimscanada.ca

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the claims adjusting process, according to Avis. “Through the use of such technology, the strategic and efficient deployment of catastrophic response teams can be enhanced,” he notes. ”From the perspective of an IA firm, this technology would provide us with the ability to isolate branch locations, and the physical locations of adjusters to identify those who are in closest proximity of a loss site. This feature will be of particular importance during the occurrence of catastrophic events, assisting in the deployment of the best suited and closest situated adjusters in a fast and efficient manner.“ And then there is fraud detection. “There is considerable buzz around the development of technology that can effectively run internet and social media searches on parties and feed potential red flags to insurers or claims professionals,” Avis comments. “This information can be vital in assessing the potential for opportunistic fraud, and assists in the investigative component of the claim’s cycle.”

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While these aspects represent the upside potential of IoT, there are risks associated with the emerging technology. One of the main challenges is the sensitivity of information and security of data across multiple devices and networks. A Hewlett-Packard study released in July 2014 found that “70 per cent of the most commonly used IoT devices contain serious vulnerabilities.” The survey did a scan of ten of the most popular IoT devices, such as televisions, webcams, thermostats, remote power outlets, sprinklers, door locks, home alarms, scales and garage openers. On average, 25 vulnerabilities were found by researchers in HP’s study of the top ten most popular IoT devices – with a total of 250 security concerns discovered. “The fact is that any devices can fail, and any networked process can be hacked,” Light comments. “These risks are probably more acute on the commercial side because the systems, sensors and data they already have were not designed to be secure. They were not designed to be shared. Today, we live in a different world.”

Despite the security risks, many see the evolution of IoT within the p&c insurance environment as a slow but steady process. The real questions are how long it will take for sensor-equipped devices to be widely installed in homes, cars and businesses and whether the ensuing data will be useful for underwriting, pricing and claims/loss control. “The Internet of Things (IoT) is an ever-evolving phenomenon,” Avis concludes. “The developments that have been made on this front will serve to benefit the insurance industry as a whole by increasing the interconnectivity and flow of communication between policyholders, carriers, brokers and claims professionals. “ 

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• spotlight S

The Path

Forward

With more “boots on the ground,” CIAA president Fred Plant says the time is right for a renewed commitment to the key issues facing front-line adjusters. By Cr a ig Ha rris

quote from the recently passed Yogi Berra seems to sum in the organization,” he says. “Although CIAA represents the up Fred Plant’s newly minted role as CIAA president: vast majority of adjusters today, we want to be the ‘big voice’ of “It’s déjà vu all over again.” Leave it to the late N.Y. all independents in Canada.” Yankee catcher to throw in a redundant witticism or two when Plant observes that adjusters can’t strictly reap benefits from needed (especially for Plant, a die-hard Red Sox fan). the profession without returning the favour. Plant, who previously served as president of the organi“My father had a saying: ‘a career is like a bank account. You zation in 2008, takes the reins of the CIAA at an interesting can’t keep drawing from it; you have to put something back juncture in independent adjusting. While he was president of in,’” he comments. “This is true for adjusters, just as it is with Plant Hope Adjusters back then, Plant is currently senior vice other professionals. Would you want to hire an accountant president, Atlantic region of ClaimsPro. who graduated 30 years ago and has not taken any professional Since that time, things have both changed – and stayed the development or tax courses since then?” same. One of the major short-term developments, of course, Continuing education and the umbrella of professional deis ClaimsPro’s decision to join the CIAA and bolster member- velopment is a steady theme that has characterized the work ship. of CIAA presidents and committee volun“I am happy to get those boots on the teers – one of the items that hasn’t changed. The feedback ground; this is a tremendous injection of Plant says this will continue to be a key people, expertise and experience into the area of focus for this year and beyond. I get from some organization” says Plant, who became CIAA, we have the capability adjusters is that this and“Within president at the CIAA’s annual general numbers to create and sustain ongoing meeting in August. “We have a whole lot two-way conversation education,” he notes. “We developed promore soldiers to carry the load – and many designations, such as the Charis long overdue and fessional hands make light, or at least lighter, work. tered Loss Adjuster (CLA), so that people needs to replace So we have all these people joining the orknow they are dealing with adjusters who ganization, bringing fresh ideas and new are at the next level.” the fractured perspectives. That is exciting.” Plant asserts that the CIAA should individual discussions strive to maintain its position as the go-to Plant notes that the addition of ClaimsPro to CIAA may also be a case of déjà hub for continuing education opportunibetween adjusters vu for their employees – many of the inties for independent adjusters. and insurers. dependent adjusting firms acquired by “We need to give our professional loss ClaimsPro were formerly CIAA members. adjusters the tools to constantly stay on “There are a lot of adjusters who are familiar with CIAA, top of their game,” he says. “We want adjusters to have a base many of whom have participated in the past on various com- level of education and then specialize in certain directions or mittees in different regions across the country,” he says. “They lines of business. By creating the right education programs and understand the association’s importance in the promotion and making courses available we will have more opportunity to dedevelopment of independent adjusting in the country.” velop professional loss adjusters.” For Plant, representation of independent adjusters across The CIAA’s role of acting as the benchmark for professional Canada is an ongoing and moving target for CIAA. He notes, development should result in a spillover effect of attracting for example, that there are more than 70 small adjuster firms in new members to the adjuster ranks –long a concern of the orAlberta, not all of which are members. ganization and its aging demographic, according to Plant. “We would very much like to have every independent loss “Like many professional services, attracting people into our adjuster in this country as an active and participating member business is a challenge,” he says. “It is not for everyone – it’s

“

”

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24/7 in a high pressure environment; you have to be a certain type of person. If we can attract a better bevy of trainees with a facility for those people to be well educated, we can greatly enhance the quality of the important service we provide.” Another longstanding issue is harmonized cross-provincial licensing, which, despite the hard work of CIAA members like Miles Barber, is moving at a glacial pace of regulatory change. “We have some degree of licence recognition from one jurisdiction to the next, but it’s not enough,” Plant argues. “For example, I have a licence in the State of Maine, but I can’t get one in Quebec - what does that tell you? If a disaster takes place in Quebec and I was the best adjuster in Canada, I couldn’t go there and use my skills to help just because I crossed a political boundary in my country. That doesn’t make sense.” “The portability of licensing is an issue we have to work on,” he adds. “As an adjuster, it’s not like you are splitting atoms in Alberta and doing brain surgery in Nova Scotia. What professional loss adjusters do at home is fundamentally and most often the same work that is required right across the country.” Plant notes there is a double standard at play when it comes to licensing mobility. “Adjusters directly employed by insurance companies are often free to roam the country unhampered by licencing regulation,” he says. “Yet an independent adjuster who is well qualified and has met the rigor of his or her home licencing requirements is handcuffed by regulation that delays and adds cost to getting the job done. That is not in the best interests of the public.” Rather than an agenda with checklists and tick-boxes for this year as CIAA president, Plant says there are big-picture issues he wants to examine with members and industry partners. One of those items is improved communications with their core clients – insurance companies. “Our interests are, or should be, totally aligned. Based on my conversations with independent adjusters from every region of Canada, I sense we are actually out of alignment,” he says. “My career has spanned nearly four decades. During that period, rates paid to independents have dropped in real dollars by more than 50 per cent,” Plant observes. “I believe that insurance companies would be happy to pay us more if they believed they were getting more from us – it is our responsibility to demonstrate to them the value we bring to the table. We can’t just stand up and say we’re better; we have to show that.” This new direction needs to move away from what many adjusters describe as an “adversarial relationship” that has characterized adjuster-insurer interactions in recent years, according to Plant. “We have to understand where the insurance companies are coming from, their opinion of us, how the service model has changed,” he notes.

p20-21 SPOTLIGHT final.indd 21

For Plant, this communication should lead to some pertinent questions: “Are insurers clear in telling us what they need? Are adjusters meeting that need? Are there more efficient ways of providing those services without compromising fundamental aspects of loss investigation and settlement?” “Independent adjusters will always be around, but in what capacity? Plant asks. “We need to engage insurers on a day-today basis so we build a collaborative model. The feedback I get from some adjusters is that this two-way conversation is long overdue and needs to replace the fractured individual discussions between adjusters and insurers.” “We need a deeper level of conversation than in the past. And it should involve a lot of the rank-and-file adjusters who, from my frank discussions with people in the field, feel underappreciated and marginalized by their customers with respect to their abilities and the value of their service,” Plant says. For Plant, this year represents an opportunity for the CIAA to chart a path forward during a period of change and renewal. He wants to capitalize on the momentum of a broad foundation of membership, fresh perspectives and a bigger voice for the organization. “There’s a lot to do this year, but we have more members to get our messages across,” Plant concludes. “We want to develop relationships with insurers that allow both parties to be sustainable for one common goal – providing outstanding claims service to the insured customer. If we can do that, everyone wins.” 

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CIAA 31st Annual General Meeting and Conference, Toronto, Ontario

The Canadian Independent Adjustersâ&#x20AC;&#x2122; Association (CIAA) held its 31st Annual General Meeting and Conference in Toronto at the luxurious Four Seasons Yorkville on August 19-22. More than 100 attendees gathered for a bustling tradeshow, informative education sessions, social events and the member meeting. l

22 Claims Canada

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CIAA REGIONAL PRESIDENTS 2015 – 2016 Newfoundland & Labrador TBA

Nova Scotia Michael Connolly, BA, CFEI, CIP ClaimsPro 30 Damascus Rd., Suite 220 Halifax, NS B4A 0C1 Phone: (902) 835-5065 Fax: (902) 835-0848 E-mail: michael.connolly@scm.ca

New Brunswick & Prince Edward Island Greg Potten, BPE, CIP, CFEI AMG Claims Inc. 212 Queen Street, Unit 308 Fredericton, NB E3B 1A8 Phone: (506) 458-9000 Fax: (506) 458-9595 E-mail: greg.potten@amgclaims.ca

Quebec/AESIQ Denis Duchesne Cunningham Lindsey Canada Claims Services Ltd. 1250 rue Guy, bureau 1000 Montreal, QC H3H 2T4 Phone: (514) 938-5400 Fax: (514) 938-5445 E-mail: dduchesne@cl-na.com

Ontario Maria Joshua, FCIP Sedgwick CMS Canada Inc. 21 Four Seasons Place, Suite 100 Toronto, ON M9B 6J8 Phone: (416) 695-5100 Fax: (416) 695-5120 E-mail: maria.joshua@sedgwickcms.ca

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

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

Western M. Doreen Lennon, CIP Townsend & Leedham Adjusters Ltd. 200, 4245 - 97 Street Edmonton, AB T6E 5Y7 Phone: (780) 463-7776 Fax: (780) 462-1280 E-mail: dlennon@tladjusters.com

PACIFIC TBA

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National Standing Committees 2015-2016 ADVISORY Heather Matthews, CIP, CRM Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA, FIFAA AMG Claims Inc. P.O. Box 20102 Sherwood Charlottetown, PE C1A 9E3 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com Paul Feron, FCIP, CRM ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2 Phone: (519) 645-6500 Fax: (519) 645-2250 E-mail: paul.feron@scm.ca Lorri Frederick ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (905) 308-6292 Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca John Jones, BA Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: jjones@cl-na.com Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com CIAA NATIONAL INSURANCE INDUSTRY ADVISORY BOARD Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 - 1575 West Georgia Street Vancouver, BC V6G 2V3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 E-mail: pkernaghan@kernaghan.com Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca

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Heather Matthews, CIP, CRM Crawford & Company (Canada) Inc. 539 Riverbend Dr. Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Heather.Matthews@crawco.ca Monica Kuzyk, FCIP, CRM Curo Claims Services 125 Northfield Dr. W., P.O. Box 218 Waterloo, ON N2J 3Z9 Phone: (866) 952-2876 Fax: (519) 888-9704 E-mail: mkuzyk@curocanada.com Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com Patricia M. Battle Canadian Independent Adjusters’ Association/L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Ave. West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca

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 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 John D. Seyler, CIP Integrated Insurance Resources 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@integrated-ins.ca Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca CONSTITUTION & RULES Paul Feron, FCIP, CRM ClaimsPro 210 – 746 Baseline Rd. East London, ON N6C 5Z2 Phone: (519) 645-6500 Fax: (519) 645-2250 E-mail: paul.feron@scm.ca

Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 CONVENTION Fax: (289) 723-1979 TBA E-mail: mgallagher@kernaghan.com DESIGNATION Paul W. Greening, CLA, FCIAA Craig J. Walker, CIP, FCIAA, FIFAA Greening Aviation Claims Inc. Maltman Group International 26C Palliser Park, Box 190 River3550 Victoria Park Ave., Suite 301 hurst, SK S0H 3P0 Toronto, ON M2H 2N5 Phone: (306) 353-2000 Phone: (416) 492-4411 Fax: (306) 353-2200 E-mail: pgreening@sasktel.net Fax: (416) 492-5657 E-mail: cwalker@maltmans.com E. Brian Gough, FCIP, CLA, FCIAA Marsh Adjustment Limited Sasha Alexander 1550 Bedford Highway, Suite 711 University of Guelph Bedford, NS B4A 1E6 Alexander Hall Phone: (902) 469-3537 50 Stone Road East Fax: (902) 469-2396 Guelph, ON N1G 2W2 E-mail: ebgough@marshadj.com Phone: (519) 824-4120 Fax: (519) 824-0364 Robert V. Pearson, CLA, FCIAA E-mail: sasha@uoguelph.ca CIAA Honorary Life Member c/o CIAA National Office 5401 Eglinton Ave. W., Suite 100 Tim Guernsey Etobicoke, ON M9C 5K6 RSA Canada Phone: (416) 621-6222 18 York Street, Suite 800 Fax: (416) 621-7776 Toronto, ON M5J 2T8 E-mail: info@ciaa-adjusters.ca Phone: (416) 366-7511 Fax: (416) 367-9869 EDITORIAL E-mail: tim.guernsey@rsagroup.ca Mary Charman, CIP Crawford & Company (Canada) Inc. Peter Hohman 1 – 120 Mulock Dr. Insurance Institute of Canada Newmarket, ON L3Y 7C5 18 King Street East, 6th Floor Phone: (905) 898-0008 Toronto, ON M5C 1C4 Fax: (905) 898-1705 Phone: E-mail: Mary.Charman@crawco.ca Fax: E-mail: phohman@insuranceinstitute.ca Dan Langer TD Insurance 3650 Victoria Park Ave. North York,, ON M2H 3P7 Phone: (416) 774-3712 Fax: (416) 774-3120 E-mail: dan.langer@tdinsurance.com Justin MacGregor Highgate Insurance Brokers Inc. 151 Rose Glen Rd. Port Hope, ON L1A 3V6 Phone: (905) 885-1551 E-mail: justinmacgregor@highgateinsurance.com Alex Walker, CIP Royal & Sun Alliance 2225 Erin Mills Parkway, Suite 1000 Mississauga, ON L5K 2S9 Phone: (905) 412-1397 Fax: (905) 403-2328 E-mail: Alex.Walker@rsagroup.ca Mark Weir Intact Financial Corporation 700 University Avenue, 13th Floor Toronto, ON M5G 0A1 Phone: (416) 341-1464 Fax: (416) 217-0562 E-mail: mark.weir@intact.net

John M. Sharoun, FCIP, FCIAA, CRM Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: John.Sharoun@crawco.ca EDUCATION Gary Ellis, BBA, FCIP, RF, FCLA, FCIAA, FIFAA AMG Claims Inc. P.O. Box 20102 Sherwood Charlottetown, PE C1A 9E3 Phone: (902) 628-9091 Fax: (902) 628-9093 E-mail: gary.ellis@amgclaims.ca EMERGENCY MEASURES Richard Van Horne Action Investigations Inc. 2 Catelina Court Dartmouth, NS B2X 3G9 Phone: (902) 462-1222 Fax: (902) 462-3688 E-mail: richardvanhorne@actioninvestigations.ca FINANCE John D. Seyler, CIP Integrated Insurance Resources 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@integrated-ins.ca

Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com IBC: LIAISON, LEGISLATIVE & FORMS Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca LICENSING J. Miles O. Barber, B.Comm. (Hons.), FCIP, CRM Network Adjusters Ltd. 67 Folkestone Blvd. Winnipeg, MB R3P 0B4 Phone: (204) 897-5793 Fax: (204) 897-5797 E-mail: mbarber@mts.net MEMBERSHIP & QUALIFICATIONS Marie C. Gallagher, FCIP, CRM Kernaghan Adjusters Limited 602 – 1 St. Paul Street St. Catharines, ON L2R 7L3 Phone: (289) 786-1074 Fax: (289) 723-1979 E-mail: mgallagher@kernaghan.com NOMINATING Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com Fred R. Plant, AIIC ClaimsPro 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8507 Fax: (506) 853-8501 E-mail: fred.plant@scm.ca Lorri Frederick ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (905) 308-6292 Fax: (416) 360-7335 E-mail: lorri.frederick@scm.ca James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com PRIVACY James B. Eso, CIP, CIOP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Keith P. Edwards, FCILA, CLA, FUEDI-ELAE ClaimsPro 120 Adelaide St. W., Suite 2401 Toronto, ON M5H 1T1 Phone: (416) 777-4479 Fax: (416) 360-7335 E-mail: keith.edwards@scm.ca PROFESSIONAL PRACTICES Albert Poon, CIP Cunningham Lindsey Canada Claims Services Ltd. 1102 – 50 Burnhamthorpe Rd. W. Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: apoon@cl-na.com

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Being a member of CIAA has its benefitsâ&#x20AC;Ś Introducing new insurance enhancements available exclusively for members of the Canadian Independent Adjusterâ&#x20AC;&#x2122;s Association

PRIVACY BREACH EXPENSE COVERAGE: LMS PROLINK in partnership with Berkley Canada is pleased to announce complimentary Privacy Breach coverage for members of CIAA who subscribe to the Insurance program. Traditional Insurance policies have not kept up with the evolving landscape of privacy breaches and the exposure adjusting firms encounter when handling private and confidential client information. Any Adjuster or Adjusting Firm that handles or stores private business, customer, or employee information is at risk of a privacy breach.

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15-06-24 1:35 PM

CIAA 31st Annual General Meeting and Conference, Toronto, Ontario

The Canadian Independent Adjusters’ Association (CIAA) held its 31st Annual General Meeting and Conference in Toronto at the luxurious Four Seasons Yorkville on August 19-22. The President’s Banquet and Ball saw outgoing CIAA president Albert Poon pass the reins to incoming president Fred Plant. Numerous awards were handed-out to CIAA members and Ted Hellyer, vice president, operations and vice president, programs at the Insurance Institute of Canada, received CIAA’s ‘Honorary Member Award’ for his invaluable guidance and expertise in support of the professional development objectives of the CIAA. l

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Reducing Loss through

Restoration

A look at equipment restoration and its effects on commercial claims across Canada. By Da nn y Fu ng

Based on many years of experience, we have found that the success rate for restoring equipment is consistently better than 90% if acted upon quickly. The cost is typically less than 30% of the net replacement value of the equipment â&#x20AC;&#x201C; and that is not counting secondary costs associated with the loss of use of the equipment. This article provides an understanding of what equipment corrosion is, how it causes equipment failure, how to properly restore equipment and how cost effective restoration can be.

Smoke & Chemical Equipment Contamination Smoke is the end product of combustion. Its composition varies greatly depending on the material that combusted. The black soot that gives smoke its distinctive colour is often carbon. It is produced from the burning of wood, 28 Claims Canada

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plastic, petroleum, and other organic products. As carbon conducts electricity, it can cause short circuits in electrical and electronic equipment. Furthermore, it can cause overheating problems in heat producing equipment because of carbonâ&#x20AC;&#x2122;s heat-insulating properties. Carbon does not dissolve in water or solvents, and must be removed by mechanical means such as wiping, scrubbing and vacuuming. Sulphate and nitrate are contaminants that are also commonly found in smoke. They are produced from the burning of rubber, lacquer paint, petroleum based lubricants, and fuel oil including diesel fuels. Combined with moisture, sulphate and nitrate can turn into various forms of sulphurous and nitrous acids. These acids can cause serious corrosion in metals and electrical contacts, and the corrosive action can accelerate many orders of magnitude upon the application of electricity. The most harmful substance often found in smoke is chloride. In a majority of fire losses chloride is produced by

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the combustion of PVC plastic, which is commonly used in insulated electrical wires, plastic sheets, and containers. Chloride reacts readily with moisture and turns into various forms of highly corrosive hydrochloric and hydrochlorous acids. In a typical fire scene, the bright orange flash rust found on bare metal surfaces, and the yellowing of enamel finish on appliances, are their signatures. Similar problems can occur in the case of chemical contaminations such as the release of acid vapours or fumes, or chlorine gas, and the discharge of chemicals including dry powders from fire extinguishers. It is the water soluble components in the contaminants that react with moisture to cause corrosion problems.

Water & Moisture Equipment Damage Water damage, other than by direct absorption, is often caused by the same substances that make water conduct electricity - the minerals and other www.claimscanada.ca

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deposits that are in it. Tap water carries a certain amount of minerals such as calcium, sodium, and magnesium, originating from mineral latent rocks buried deep underground in the water table. Rain water typically contains weak carbonic acid which originates from carbon dioxide dissolving in rain drops as they fall from the sky. It can also contain more harmful acids from pollutants - such as Sulphur dioxide and nitrous oxides â&#x20AC;&#x201C; that are commonly found in polluted air. By the time the water from a broken pipe reaches the equipment, it often carries many surprises. The most harmful deed water can do is to introduce acids, minerals, and dirt into the equipment. In the presence of water, such contaminants will break down into various ions and start to corrode as soon as they make contact. If the equipment is energized by electricity while it is still wet, the ions released by the minerals will act as conductors and cause short circuits. More seriously, the corrosion process can accelerate by many orders of magnitude upon the application of electricity by way of electrolysis actions. Catastrophic failures can occur within minutes or seconds of flipping the switch. After the water dries, those ions will re-combine into mineral molecules and will stay behind and remain inert. If they are not removed, they will slowly react with moisture in the air, re-activate, continue to corrode and eventually cause the equipment to fail. Moisture exposure is a costly, and often, an overlooked hazard to electronic equipment. This is particularly problematic in situations where the equipment had been accumulating dust in the interior due to air convection or mechanical cooling by fans. When air becomes very humid, dust particles begin to absorb moisture and collapse into a wet, dense mass. If the equipment is switched on, this wet, dense mass can conduct electricity and cause short circuits. If the moisture is allowed to dry, the caking of collapsed dust particles can act as heat insulation that will not allow the equipment to cool properly, or start to obstruct air flow because of the new denser strucwww.claimscanada.ca

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tures. This, in turn, may cause overheating and eventually failures even though the equipment had never been in direct contact with water.

The Decontamination & Restoration Process The key is dealing with the situation before corrosion has a chance to inflict any damage that is significant or permanent. Since water must be present in order for corrosion to take place, the first step is to make sure the equipment remains powered off and stay dry. Without water or moisture, the entrapped minerals cannot break down into ions and therefore will stay inert.

The next step is to completely remove the soot, acids, and dirt before they inflict any damage further down the road. The most effective method is to disassemble the equipment, scrub and clean all the affected parts in specially formulated detergents, neutralize the chloride if needed, then if applicable, thoroughly rinse them in distilled or demineralized water, or an organic solvent such as ether. The secret is to dry them thoroughly at an elevated temperature with well circulated air for extended periods of time in order to remove any remaining moisture. Such work should only be handled by

trained professionals using specialized equipment. The procedures involved in dealing with moisture-exposed equipment are very similar to those employed for treating smoke and water related contamination. The disassembly of the equipment, thorough cleaning, and proper drying are the keys. Again, the work should only be handled by trained professionals using specialized equipment. As risk management and insurance professionals, we should all keep equipment restoration top of mind whenever we are involved in a commercial or industrial loss. Millions of dollars can be saved for all parties involved. î &#x2014;

Danny Fung is President & Senior Technical Consultant of Newtron Group, a restoration and consulting firm. He is a veteran engineer with 30 years of experience specializing in equipment restoration and technology.

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Getting the

Lead Out

What are the implications of lead paint liability for Canadian insurance coverage? By H ea t her A . Sa n d er so n

Although banned in Canada in 1976 and in the United States in 1978, lead paint remains present in many older houses. It was used prior to these dates as well, mainly because when added to paint, lead speeds up drying, increases its durability, maintains a fresh appearance and resists corrosion from moisture, according to the Royal Society of Chemistry. In March 2014, a California state court ordered three major paint companies to pay $1.15 billion towards the funding of an agency to inspect for and remove lead paint in pre-1978 homes in order to halt poisoning and prevent the future inevitable degradation of the paint. It was found that the Defendants knew as early as the 1920s and 1930s that lead paint was poisoning children, but continued to promote the sale and use of the paint as interior house paint when alternatives existed. Using the ‘but for’ causation test, the Court held each Defendant jointly and severally liable on the basis of public nuisance (see: The People of the State of California v. Atlantic Richfield Company, Conagra Grocery Products Company, E.I. Du Pont de Memours and Company, NL Industries, Inc., and The Sherwin-Williams Company, Case No. 1-00-VC-788657, Superior Court of California). The case is under appeal, but it is sending shock waves through the insurance industry, as there is concern that the case will spawn similar litigation throughout the United States, with coverage litigation to follow. Deteriorating lead paint in high friction areas, such as windowsills and doors, flakes, chips and forms dust. Due to normal hand 30 Claims Canada

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to mouth behavior, children often ingest the lead. Any level of lead exposure lowers a child’s IQ, causes memory impairment and, reportedly, is a cause of Attention Deficit and Hyperactivity Disorder (ADHD), as noted in the California case. In fact, it has been reported that Freddie Gray, the 25 year old Baltimore man who died as a result of spinal injuries sustained in the back of a Baltimore police van in April 2015, was poisoned by lead as a child while living in old tenement buildings with peeling lead paint. At the time of his death he was reportedly living on the proceeds of a lead paint settlement case (see: O’Hare, Sean, London Daily Mail, Mail Online, How Freddie ‘Pepper’ Gray, 25, lived off a lead paint settlement after being poisoned as a child and was well known to police following at least 18 arrests, April 28, 2015 http://www.dailymail.co.uk). The same article quotes Ruth Ann Norton, head of the Green & Healthy Homes Initiative and a founding member of the Maryland Lead Poisoning Prevention Commission, as saying that lead-poisoned children are ill-equipped to finish school. A chip of lead paint the approximate size of a period at the end of a sentence will increase lead blood level readings (California v. Atlantic Richfield Company). One gram of lead, the size of a packet of sugar, spread over 100 rooms with a size of 10 x 10, will produce a lead dust hazard at twice the level recommended by the United States Environmental Protection Agency. The majority of Canadian lawsuits for environmental harm have failed due to flawed expert reports and the absence of evidence (see: Strand Theatre Ltd. v. Prince Albert (City), 2014 SKCA 85, leave to appeal to the Supreme Court of Canada, refused, 2015 Carswell Sask 165).

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Multiple studies have confirmed that Canadian children are being harmed by the presence of lead paint (see O’Grady, Kelly and Perron, Amélie, Reformulating Lead-Based Paint as a Problem in Canada, American Journal of Public Health, 2011 December). If the massive body of evidence necessary to support a liability case against historical lead-paint manufacturers in Canada can be gathered, a Canadian court may find that exposure to degrading lead paint in pre-1976 housing is the liability of property owner. Moreover, liability could extend to those who were involved in the manufacture and sale of lead paint, raising significant insurance coverage issues for which there are no easy answers. Absent a tight lead paint exclusion, under third party coverage, is this ‘property damage?’ If there is evidence that the lead paint will eventually degrade and that bodily injury will be a virtual certainty as a result, is this a case of ‘bodily injury?’ Is a demand to abate the presence of lead paint ‘compensatory damages?’ Is the event an ‘occurrence’ or ‘accident’ if there is knowledge of toxicity when lead paint was developed and sold? If these threshold third party coverage issues are surmounted, there will be issues as to whether the pollution exclusions apply, but those arguments may be weak. One Alberta case, Medicine Hat (City) v. Continental Insurance Co., 2002 ABQB 259, suggests that lead dust may be a pollutant but ingestion of the dust may not be a “discharge, dispersal, release or escape of lead dust” within the meaning of an exclusion, but rather an “exposure” of the inhabitants of the pre-1976 to lead dust. “Exposure” has a broader meaning than “discharge, dispersal, release or escape,” suggesting that the pollution exclusion may be inapplicable. www.claimscanada.ca

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Proof of the mere possibility that the policy will respond or indemnify triggers a defence under third party coverage (see: Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33; Monenco Ltd. v. Commonwealth Insurance Co., 2001 S.C.R. 49; Nicols v. American Home Assurance Co., 1990 1 S.C.R. 801). Primary insurers whose policies have been triggered will then face the debate as to allocation of defence costs. (Québec courts have not yet ruled on how defence costs are to be allocated between multiple insurers in the context of multi-year continuous damage claims. The comments that follow apply to common law Canada.) There are inconsistencies amongst the provinces as to allocation of defence costs for uninsured periods. For example, In Lombard General Insurance Company of Canada v. 328354 B.C. Ltd., 2012 BCSC 431, the British Columbia Supreme Court held that in the absence of proof as to what defence costs will be expended to defend covered claims, an insured will not be required to financially support the defence for periods of time for which no insurance

applied. In Goodyear Canada Inc. v. American International Companies, 2013 ONCA 395, the Ontario Court of Appeal held that the insured is liable for periods for which there is no responding coverage.

Any level of lead exposure lowers a child’s IQ, causes memory impairment and, reportedly, is a cause of Attention Deficit and Hyperactivity Disorder (ADHD), as noted in the California case. The question may turn on whether insurers can use the traditional time on risk analysis and force the insureds to fund those periods for which no insurance is available. Subject to the Lombard decision, the traditional course in Canada has been to allocate defence and indemnity costs according to a time on risk analysis. See, for example, Royal

& Sun Alliance Insurance Co. of Canada v. Fiberglas Canada Inc. (1999), 12 C.C.L.I. (3d) 282 (Ont. Gen. Div.). Will excess carriers be persuaded to drop down and defend, sharing defence costs with the primary insurers? Before it will drop down, the excess insurer must have a contractual duty to defend which is ascertained by investigating whether that policy contains a defence agreement and if so, whether there is coverage under the excess wording: (ACE INA Insurance v. Associated Electric & Gas Insurance Services Ltd., 2013 ONCA 685). It is possible that lead paint will be “the next asbestos.” Even in Canada.  Heather A. Sanderson is a principal with Sanderson Law in Calgary, Alberta. Heather is a nationally recognized author and insurance coverage counsel who has appeared as counsel before a full panel of the Supreme Court of Canada. Currently, Heather is a director of Canadian Defence Lawyers (CDL), a member of CDL’s Insurance Coverage & Practice Committee and Chair of the DRI’s Insurance Law Sub-committee, Canadian Law and Cross-Border Issues.

Forensic Engineering Consultants Read Jones Christoffersen (RJC) Ltd. has been involved in the evaluation and restoration of building structures and enclosures for over 35 years. Our expertise has expanded to include Forensic Engineering: Property Damage Assessment and Loss Remediation Structural Collapse Failed Building Component Issues Building Code Compliance Issues Construction Claim Disputes Analysis Litigation Technical Support

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The “Derivative”

Claim

A recent Alberta court decision suggests that insurers should tread carefully on coverage involving intentional acts and negligence. By Do nal d J. Mc Gar v ey an d Ka t e M. Wh it t l et o n

If a party makes allegations that can be described both as intentional acts and as negligence, questions of insurance coverage and the duty to defend will no doubt arise. The issue of coverage is further complicated when intentional acts and negligence are intertwined with the allegations. The question comes down to: what is the true essence of the claim?

The Duty to Defend As stated by the Supreme Court of Canada (“SCC”) in Nichols v. American Home Assurance Company, [1990] 1 SCR 801, the duty to defend is triggered not by actual acts or omissions, but by the allegations in the pleadings, even if those allegations are groundless, false or fraudulent. The SCC has further indicated that where a claim makes no allegations that could potentially give rise to indemnity, there is no duty to defend. The duty to defend arises only when the allegations could potentially fall within coverage. In the well-known case of Non-Marine Underwriters, Lloyd’s of London v. Scalera, [2000] 1 SCR 551, 2000 SCC 24, the SCC endorsed the following 3-step process to determine whether a given claim could trigger indemnity: 1. Determine whether the allegations are properly pled. Courts are not bound by the legal labels chosen by the Plaintiff. In particular, one cannot frame a claim in negligence to trigger coverage where the essence of the claim rests on a foundation equivalent to an intentional act. 2. Determine whether any of the allegations are derivative in nature. The duty to defend will not be triggered simply because a claim can be cast in terms of both negligence and intentional tort. If both the 32 Claims Canada

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negligence and intentional tort claims arise from the same acts and cause the same harm, the negligence claim is derivative and subsumed within the intentional tort. If they are sufficiently disparate to render the two claims unrelated, the claim in negligence is not derivative of the allegations of the intentional act. 3. Ask whether any of the non-derivative claims could potentially trigger the insurer’s duty to defend. Based on the SCC’s analysis in Scalera, an insurer is entitled to look at the true essence of the allegations when assessing their duty to defend. Where the essence of the allegations is such that the claim(s) in negligence derive from an intentional tort and the acts that are alleged to have been both intentional and negligent are the same acts and cause the same harm, the true essence of the claim can likely be said to relate to an intentional act causing bodily harm. The “derivative claim” question is considered further below.

The Problem of Johnson v. Aviva Insurance Company of Canada The Scalera analysis has been applied in numerous other cases. For instance, in Sansalone v. Wawanesa Mutual Insurance, [2000] 1 SCR 627, 2000 SCC 25, a civil action www.claimscanada.ca

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was advanced against five B.C. Transit bus drivers arising by the Defendant during a floor hockey game. Aviva also out of various alleged sexual assaults. The allegations in asserted that the factual allegations were unchanged in the the Statement of Claim included battery, negligent battery, Amended Statement of Claim and that the only allegation negligent misrepresentation and breach of duty. In relation present was that the Defendant committed a deliberate to those allegations, the SCC found that the insurer had act by intentionally tripping and pushing the Plaintiff. It no duty to defend the Plaintiff because the negligence and seemed clear that the negligence allegations were entirely unintentional tort claims were entirely derivative from the derivative of the intentional act and the amendment to the battery claim and therefore excluded on the basis of an in- Statement of Claim to plead negligence was an attempt tentional act. only to trigger insurance coverage. By contrast, the Alberta Court of Queen’s Bench in JohnAlthough the Court agreed with Aviva that the son v. Aviva Insurance Company of Canada, 2014 ABQB 688, original Statement of Claim only alleged an intentionrecently found that, despite allegations of both negligence al act and therefore would not engage coverage, and and battery arising out of the same incident, an insurer the wording of the Amended Statement of Claim was was obliged to defend the claim. This determination has “ambiguous” and not “ideal,” the Court stated that re-ignited the debate over whether coverage for negligence any doubt as to whether the pleadings brought the inshould be available when the acts that cident under the policy’s coverage give rise to the negligence allegations was to be resolved in the insured’s are derived from intentional acts. favor. In 2009, the Defendant, Jeffrey As such, the Court found that when Johnson, participated in a floor hockey given the “widest latitude,” the subgame organized by the Calgary Sport stance of the Plaintiff’s claim was that & Social Club (“CSSC”). The Plainwhile playing floor hockey she was intiff, another participant, alleged that jured when she was tripped and pushed she was injured by Johnson during by the Defendant. How the Plaintiff’s the game. The Statement of Claim alleged injuries were sustained had originally alleged that the Defendant not been established: whether by incommitted an assault and battery by tentional or negligent act. It seems on “intentionally, viciously and forcibly this basis, the Court found that it was Given the tripping then pushing” the Plaintiff, arguable that the pleadings gave rise to Supreme Court’s thus causing injury. The claim was two actionable torts involving differdescription of a subsequently amended and while the ent acts based on the Defendant’s state allegations of intentional actions reof mind, one intentional and one nonderivative claim, mained, a sub-paragraph was added intentional. Given this “mere possibilthe Alberta Court of to allege, in the alternative, that Johnity” that the claim for negligence could Queen’s Bench decision in succeed, the Court found that Aviva son had been negligent in causing the Plaintiff’s injuries. Johnson v. Aviva Insurance had a duty to defend. At the time, the CSSC was insured Company of Canada is Conclusion by Aviva Insurance Company of CanAlthough the principles set out in surprising. ada (“Aviva”). The relevant policy covScalera continue to apply, recent juriserage extended to any member of the CSSC participating in a sanctioned sporting event, subject prudence has cast some doubt on traditionally “derivative” to certain exclusions. Specifically, the policy contained an claims. Given the Supreme Court’s description of a derivative claim, the Alberta Court of Queen’s Bench decision in exclusion which stated that the policy did not apply to: “Bodily injury” or “property damage” expected or in- Johnson v. Aviva Insurance Company of Canada is surpristended from the standpoint of the insured. This exclu- ing. Aviva did not appeal and thus, the effect of this case sion does not apply to “bodily injury” resulting from the may therefore add to the confusion surrounding this area as it would appear that a derivative claim in negligence that use of reasonable force to protect persons or property. The Defendant brought an application for a declaration arose from an intentional act may now attract coverage. that Aviva was obliged to defend him in the underlying ac- The fundamental question remains: “what is the true estion. Aviva opposed the application on the basis that the sence of the claim?”  Plaintiff’s allegations related to intentional conduct and Don McGarvey, Q.C. is a partner and Kate Whittleton were therefore excluded from coverage under the policy. The Defendant argued that the Plaintiff also alleged negli- an associate in the Edmonton office of McLennan Ross LLP. gence, which was not excluded from the policy and there- Both Don and Kate practice in the area of commercial litigation and commercial insurance. McLennan Ross LLP is a fore triggered Aviva’s duty to defend. Aviva asserted that the substance of the Plaintiff’s claim proud member of the ARC Group of Canada network of law was that she was injured when she was tripped or pushed firms. www.claimscanada.ca

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Driver ID

Discovering the actual sequence of events in an accident can be a surprisingly difficult task. By Jea n -Fr an รง oi s Go u le t

In the middle of the night, police arrive at the scene of a collision to find two cars with significant damage stopped in the middle of the intersection. In the first car, which was struck on the passenger side, they find two female occupants seriously injured and unconscious. The ambulance crew is attending to them. The second car has moderate frontal damage and is found unoccupied with the driver door wide open. They find one male sitting on the curb with an ice pack on his forehead, apparently faring better than the occupants of the other car. The male shows clear signs of alcohol impairment. He tells the police that the empty car is his, but that he was a passenger in his own car when the collision occurred. The driver was a good Samaritan that he had just met at the 34 Claims Canada

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local pub who had kindly offered to give him a ride home given the amount of alcohol he had consumed. He states that this person unfortunately fled the scene immediately after the collision before he had a chance to ask him what his name was. There is nobody else around to confirm or challenge this statement. Was he really a passenger in his own car or was he driving while being impaired? Another typical case could involve a vehicle occupied by several individuals travelling at highway speed that starts drifting sideways and then hits the gravel shoulder. In an attempt to recover, the www.claimscanada.ca

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driver steers hard to the left and then to the right, sending the vehicle into yaw before going off road and rolling over several times in the ditch, while ejecting some of the occupants along the way. After the dust has settled, the surviving occupants may not remember who was driving, or the lone survivor and owner of the vehicle claims that he was not the driver. In cases like these, driver identification becomes a critical issue and forensic engineers specializing in accident reconstruction and bodily injuries can provide assistance. Our work in such instances is based partly upon the post-crash physical evidence relating to the occupants, including the injuries sustained and the resting positions of the occupants, and partly on circumstantial evidence as conveyed by the surviving occupants and potential witnesses. We also review the physical evidence documented at the collision site (e.g., tire marks) and the damage sustained by the vehicles to understand how the collision occurred and how the occupants moved inside the car, and even outside if they were ejected. In an ideal situation, we will be given the chance to inspect the interior of the vehicle to document any evidence of contact between the occupants and surfaces inside the car, evidence of seat belt use or non-use, as well as the driver seat position. Any organic material or fabric transferred onto a surface can be collected after its location inside the vehicle has been documented. The underlying goal of such verifications is to be able to assess who was sitting where at the time of the accident and, especially, who was in the driver’s seat, by matching the injuries with the evidence of occupant contact inside the vehicle including: 1. Matching seat belt bruises with evidence of seat belt use; 2. Matching any organic transfer from the occupants to exposed surfaces inside of the car; 3. Matching any fabric transfer from the occupant’s clothing to exposed surfaces inside of the car. Other parameters can also be documented for that purpose. For example, www.claimscanada.ca

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we may find that the driver seat position is only consistent with the size of one or a limited number of occupants.

In an ideal situation, we will be given the chance to inspect the interior of the vehicle to document any evidence of contact between the occupants and surfaces inside the car, evidence of seat belt use or non-use, as well as the driver seat position.

In cases of severe frontal collisions, such as head-on collisions, shoe prints may be visible on the pedals. The electronic crash data may also help us confirm the presence of passengers in the vehicles and their ap-

proximate size. it may also contain information about the speed of the vehicle and driver actions such as braking, accelerating and steering, which can then be compared to the circumstantial information relayed by the occupant and witnesses To sum up, if you need to know who was behind the wheel at the time of a collision, give your accident reconstruction expert a phone call. Your expert may be able to answer that question.  Jean-François Goulet, P. Eng., is a mechanical engineer with CEP Forensic Engineering Inc. specializing in accident reconstruction. He has been in the road vehicle accident reconstruction industry for 10 years. He is also a member of the Association of Professional Engineers in Ontario and Quebec, the Association of Professional Engineers & Geoscientists of BC (APEGBC) and the Society of Automotive Engineers (SAE). Jean-François Goulet can be reached at jfgoulet@ expcep.com.

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• education forum

A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA

Share and Share Alike

Peer-to-peer technologies are allowing individuals to offer rides in their cars to people for a fee, and to rent their houses to strangers. For adjusters, claims arising out of these new shared economies are anything but simple.

elcome to the so-called “shared” or “peer-to-peer” economies, where technology brokers arrangements with individuals willing to perform a service for a fee. Consumers like the new technology for its ease, cost savings and simplicity. But claims scenarios arising out of these business transactions are anything but simple. Increasingly, adjusters are being called upon to navigate the tricky world of insurance claims generated by nebulous and largely unregulated shared or peer-to-peer economies. “Bring it on,” said Fred Plant, senior vice president of the Atlantic region at ClaimsPro and president of the Canadian Independent Adjusters Association (CIAA). “In the adjustment business, we love anything new because the answers aren’t on the shelf and they really call on the expertise of what adjusters do. They underscore the necessity of keeping good notes, digging into everything and making sure you have a good understanding of the situation.”

Coverage Issues Uber and Airbnb are two wellknown, real-world examples of shared economies. Politicians, litigators and journalists are now becoming familiar with their innovative, disruptive business models, which have gener36 Claims Canada

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ated a great deal of public discussion. Debate often focuses on insurance coverage in the new world of peer-topeer technology and services. To understand the insurance coverage issues, consider Uber drivers, who operate in 260 cities and 45 countries around the world. Uber drivers must be 21, own their own four-door sedan and carry their own personal insurance policies. Which raises the basic question: If an Uber driver crashes the car while taking passengers to a destination for a fee, will their own personal insurance policies cover the damage to the driver’s car or liability for the passenger’s injuries? It’s an open debate right now. In Ontario, language in Section 3 of Ontario’s OAF 1 Standard Auto insurance application asks a very direct question about auto use: “Will any of the described automobiles be rented or leased to others, or used to carry passengers for compensation or hire, or haul a trailer, or carry explosives or radioactive material?” (While this is an Ontario example, the issues apply across all provinces in Canada). If yes, the driver may request from the insurer an OPCF 6A policy endorsement, which gives permission “for the automobile to be used to carry passengers for compensation or hire.” Deborah Sherren of Cunningham Lindsey believes that service-for-hire

October/November 2015

situations require commercial insurance policy endorsements such as the OPCF 6A. “It comes down to whether or not you believe Uber is a taxi service or not,” she said. “While it could be called a ride-share program many argue that if you are taking someone to a destination that you had no intention of going yourself and you are charging for that service, then you are a taxi service.” Uber denies this characterization of its internet-based service. Recently Uber won a case in an Ontario court against the City of Toronto, which attempted to argue that Uber was a “taxicab brokerage” and should be licensed accordingly. The judge noted that a taxicab license did not apply to Uber drivers under the City’s regulations, and a limousine service license would apply to Uber drivers only if they “accept” calls in any manner to arrange transportation. But Uber’s app allows Uber drivers to decline a ride request, meaning Uber is not required to carry a license as a ride brokerage. Licensing aside, the insurance coverage issue revolves around whether people are informing insurers about the change in use of their personal cars or homes. Adjusters say individuals offering services in the shared economies may not wish to disclose to insurers that they are using their vehicles or homes for commercial purwww.claimscanada.ca

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poses to avoid paying higher commercial policy premiums. But “the fundamental rule of informing insurers applies across all insurance lines,” said Plant. “The Golden Line threading through all of these situations is utmost good faith.”

Estoppel Potential disputes about coverage raise a major issue for adjusters when it comes time to adjust a shared economy claim – estoppel. Estoppel is “a bar created when someone by his action, or lack of it, indicates he will not exercise a right he has,” according to the Insurance Institute’s Dictionary of Insurance. In the context of shared economies, adjusters must be careful that insureds do not assume there is coverage just because a claim is under investigation. “As an independent adjuster, I would immediately escalate any suspicion I had regarding a potential commercial use vehicle – pizza delivery, courier drivers [who tend to use their own personal vehicles],” said Sherren. “I would send out a non-waiver and escalate it to the company right away.” A non-waiver form allows the insurance company to investigate the claim on a without-prejudice basis, notes Sherren. “Nothing that I am doing implies that I am covering your car,” she explained. “If adjusters don’t investigate without prejudice or ask insureds to sign a non-waiver before they do that appraisal of the vehicle, then that could be considered an estoppel, because they implied there was coverage when there may not be.” Tammie Norn of Proformance Group Insurance Solutions said she always counsels adjusters to carry non-waiver forms with them when they go out to meet with an insured or to a scene to investigate any claim. Not everyone will sign the form on the scene, Norn said. “Sometimes the insureds will get scared off by that [non-waiver], and they won’t want to sign it because they think we are automatically going to deny the claim, www.claimscanada.ca

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but that’s not the case, obviously,” she said. “We are investigating coverage.” If a client refuses to sign the nonwaiver, the next step is to provide the insured with a reservation of rights letter. “That basically says, ‘We’ve explained this to you, you chose not to sign the non-waiver, so we are providing you with this letter to say we are

Adjusters say individuals offering services in the shared economies may not wish to disclose to insurers that they are using their vehicles or homes for commercial purposes to avoid paying higher commercial policy premiums. going to continue to investigate,’” said Norn. “However, by virtue of the fact that we are investigating does not necessarily mean there is coverage. That would be the first and foremost thing we would need to do as an adjuster.”

Vicarious Liability Another ambiguity around shared economy claims is the relationship between people offering the services

and the business organizations offering the internet-based, peer-to-peer technology. Who exactly is liable – or vicariously liable – in the event of a claim? A class action lawsuit raising a legal question about the relationship between Uber and its third-party drivers was allowed to proceed to trial in San Francisco in September 2015. Basically, the case asks the following question: Are Uber drivers “employees” of Uber, or are they independent contractors? Case law or regulation around this issue would be of interest to adjusters because of the potential vicarious liability issue, Norn said. “I am always looking for other parties that may be liable,’” Norn said. “If it’s my insured who is the host [Uber] driver here, and we’ve got an injury to a passenger and they are suing our driver, my mind automatically goes to Uber as well. I am certainly going to be considering the viability of bringing them into the action from a vicarious liability perspective.” Ultimately, adjusters say, fact-finding will play a role in how insurers adjust their coverage to suit shared or peer-to-peer economies. Plant says it’s a well-known axiom among insurance lawyers who collect information from adjusters that “those with the best notes win.” “Adjusters have never been the ones to develop policies,” said Plant. “But underwriters do use the experience of adjusters to see what they intended to cover and what they didn’t intend to cover. They use that information to develop future policies.”  More information about the impact of shared economies on insurance is available in the CIP Society Trends paper, ‘Uber: Ride Sharing and Liability Bearing,’ available at www.insuranceinstitute.ca. For adjusters seeking to learn more about emerging risks, The Insurance Institute of Canada now offers a three-course Risk Management Certificate Program.

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• on the scene OTS The Canadian Independent Adjusters’ Association is pleased to announce their newly elected executive for the 2015 – 2016 term. Pictured from L – R: Grant King, Director; Patricia Battle, Executive Director; Jim Eso, Director; Heather Matthews, 1st Vice President; Albert Poon, Immediate Past President; Fred Plant, President; Monica Kuzyk, Secretary; Lorri Frederick, Director; John Seyler, Treasurer; Paul Feron, Director. Missing: Gary Ellis, 2nd Vice President; Marie Gallagher, Director; John Jones, Director; Craig Walker, Director. l

Eric Fontenot

John Martin

EFI Global is pleased to welcome Eric Fontenot, P. Eng, CFEI (Forensic Engineer) to the Edmonton, AB office and John Martin, CFEI (Fire Investigator) to the Hamilton, ON office. EFI Global, Inc. provides of forensic engineering, failure analysis, fire investigation, accident reconstruction, environmental and laboratory testing services. It is part of the Cunningham Lindsey group of companies. l Crawford & Company (Canada) Inc. recently launched Crawford iQ,™ a set of Information and Communication Technology (ICT) tools for employees and clients. Crawford says its integrated, flexible and user-friendly systems and ICT tools provide clients with easily accessible, accurate and simplistic data management solutions. Delivered in four offerings, Crawford iQ™ provides the intelligence that powers The Crawford Solution™, an integrated solution for corporate, broker, insurer and re-insurer claims administration. l inTrust, the National TPA division of Cunningham Lindsey Canada Claims Services Ltd. (“Cunningham Lindsey Canada”), announced its launch of Clarity Online. A risk management tool, Clarity Online allows inTrust TPA clients to analyse claims data through customized formatting and reporting. l

DKI Canada announced the addition of two new members in Western Canada – Spectrum Restoration DKI and Universal DKI. Spectrum Restoration DKI has provided property restoration services in Lloyminster, Wainwright, and surrounding areas of Alberta and Saskatchewan for 15 years. Universal DKI has provided property restoration services in Prince George, Terrace, and surrounding areas for over 10 years. In addition, William Young Contracting DKI joined the DKI organization in Toronto, where it has served the Ontario region for 40 years. l Newtron Group, the leading full service equipment cleaning, restoration, engineering and technical consulting firm, announces the first publication of The Equipment Restoration Handbook, Volume 1. A new resource designed for property insurance professionals to assist them in better understanding equipment restoration and how to leverage it effectively to reduce their claim losses significantly. l Intact Financial Corp. announced in early September that it intends to offer “tailored insurance products” for Uber, a service that lets consumers order and pay for passenger transportation. “The intention is to offer and market these products under IFC’s two largest brands - Intact Insurance and belairdirect,” Intact stated in a release, adding the firm is “working closely with insurance regulators and different levels of government in provinces where the ridesharing service currently exists.” Regulators in Ontario and Alberta warned earlier this year about possible insurance coverage gaps with Uber. Intact stated it will share more details on its insurance products for Uber when they are made available. l CEP is pleased to welcome two new members to its Materials Engineering team – Zoran Krstic, P.Eng., Ph. D., and Alejandro Mejia. Both investigators will be based out of CEP’s Toronto office. In addition, Louis-Eric Joubert, P. Eng., MS, has been promoted to the position of Regional Director, Toronto. Founded in 1972, CEP has grown to a company of over 70 employees covering all fields of Forensic Engineering and Sciences. l

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Alejandro Mejia

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Louis-Eric Joubert

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• on the scene OTS

Mark Milner

Peter Wills

Shirley Niven

Zurich Insurance Group has appointed Paul Horgan CEO of Zurich’s Global Corporate in North America (GCiNA) business, effective immediately. Horgan, previously Head of Group Reinsurance, is now accountable for the direction, management and performance of GCiNA, a major business area within North America, which recorded gross written premiums and policy fees of US$3.7 billion last year, Zurich American Insurance Company said in a press release. l The Ontario Chamber of Commerce (OCC) is urging Toronto City Council to “unlock the economic potential” of the sharing economy as the city considers adopting a Transportation Network Company regulation for ridesharing. “The sharing economy is growing at an incredible rate and the opportunity for Ontario municipalities is an important one,” said Allan O’Dette, president & CEO of the OCC, in a September press release. “Jurisdictions that are building adaptable regulatory and tax frameworks are more likely to produce new technologies that will drive economic growth.” l British Columbia Premier Christy Clark recently announced a top-up of $10 million to the Strategic Wildfire Prevention Initiative and tasked the provincial Ministry of Forests, Lands and Natural Resource Operations to look at other ways to reduce wildfire risk through on-the-ground operations. The top-up brings the total amount provided to the Strategic Wildfire Prevention Initiative since 2004 to $78 million, the ministry noted. l Meanwhile, Communities in Alberta will have access to $800,000 in funding this fiscal year for wildfire protection projects through the FireSmart Community Grant Program, Alberta Agriculture and Forestry announced in September. Municipalities, municipal districts, counties, Métis Settlements and registered non-profit societies located within the Forest Protection Area of Alberta are eligible to apply for FireSmart grants to a maximum of $100,000 per community. l Manitoba Public Insurance (MPI) announced on Friday that people who insure their vehicles with a $100 or $200 deductible package will qualify to have the deductible reduced to $0 for vandalism claims. Manitobans who insure their vehicles with an Autopac Extension deductible package of $100 or $200 will qualify. The change takes effect on Friday, following an amendment to the Automobile Insurance Coverage Regulation, MPI explained in a statement. l 40 Claims Canada

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Pario Engineering & Environmental Sciences (Pario) has appointed three senior professionals to its team – Mark Milner as Vice President, Engineering; Peter Wills, Senior Structural Engineer and Manager, Barrie Office; and Shirley Niven, Forensic Engineer, Fire & Explosions. Pario helps clients understand the root cause of system, material, building, and environmental failures, and assists with liability determination, subrogation opportunities, and remediation. Pario Engineering & Environmental Sciences is a multi-discipline team of Electrical, Mechanical, Material, Chemical, Civil/Structural Engineers. l Annual sales of autonomous-capable vehicles are expected to reach 85 million by 2035, according to a report released in September by Navigant Research, a market research and consulting company that provides analysis of global clean technology markets. The report, Autonomous Vehicles, provides a detailed examination of the emerging market for different levels of fully and semi-autonomous driving. The study also provides a discussion of the potential benefits, demand drivers, inhibitors and technology issues related to advanced driver assistance systems and autonomous vehicles. In addition, it includes an assessment of how quickly the percentage of vehicles with some autonomous capability will grow within the six major world regions. l Global professional services company Towers Watson has announced the development of an application within its Igloo financial modelling suite specifically tailored for property & casualty insurers in Canada. The application is designed to help Canadian insurers “efficiently use comprehensive, full-function models to help better manage risk and capital based on International Financial Reporting Standards in Canada, or on an economic basis,” Towers Watson said. l Catastrophe modelling firm AIR Worldwide estimated on Monday that insured losses from the magnitude 8.3 earthquake that struck Chile’s central coast near Illapel on Sept. 16 will be between US$600 million and US$900 million. Authorities have stated that at least 12 people have died as a result of the quake, which was felt as far away as São Paulo, Brazil, more than 3,000 kilometres away, AIR Worldwide said in a statement. Strong shaking was also felt in Chile’s capital city of Santiago, the nation’s most populous city, where tall buildings swayed for up to three minutes. l Aon Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, has announced that in the 12 months to June 30, there was a record number of catastrophe bonds on risk – US$23.5 billion. Aon Securities recently released its annual report on the insurance-linked securities (ILS) sector, which analyses the key trends witnessed in the 12 months to June 30, and also provides an overview of related markets and of re/insurance mergers and acquisitions activity. l www.claimscanada.ca

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The 2015 CIAA/CICMA Atlantic Joint Conference was held at the Rodd Brudenell Resort in PEI, June 17-19, 2015. This year’s theme was “Customer Service –Delivering A Positive Experience.” The highest attendance in a number of years was recorded, with attendees enjoying a well balanced mix of education and leisure. All education speakers were recognized with a cash donation to a charity of their choice. The annual Thursday evening lobster dinner was preceded by silent auction, which was a huge success. As a result of the generosity of the various sponsors and the attendees, we were able to make a donation of $5,000 to the Special Olympics Of PEI, as well as a similar $5,000 donation to the Salvation Army of PEI. l

The province of Ontario announced in October that it is launching a new pilot program to allow for the testing of automated vehicles on roads in the province. Beginning on Jan. 1, 2016, “Ontario will lead Canada as the first province to test automated vehicles and related technology on-road,” the Ministry of Transportation said in a press release. The pilot will enable about 100 companies and institutions involved in the connected vehicle and automated vehicle industry in the province to conduct research and development in Ontario rather than in competing jurisdictions, as well as support opportunities to bring automated vehicles to market, the ministry said. l

CIAA New Members — September 2015 CORPORATE MEMBERSHIP Fair Way Adjusters Saskatoon, SK INDIVIDUAL MEMBERSHIP Crawford & Company (Canada) Inc. Kyle Constance Calgary, AB Brian Elliot Mississauga, ON Alexander Roibas Toronto, ON

Level 1 Level 1 Level 1

Fair Way Adjusters Krista McCann, CIP, HCI-R Saskatoon, SK Lisa Montgomery, CIP, HCI-R Saskatoon, SK

Level 3 Level 2

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Nearly half of Albertans don’t fully understand all aspects of their auto insurance policy and about one-third want to manage their insurance online, according to a recent Esurance-sponsored survey. The survey found that more than half of Albertans are already leveraging the Internet to shop for auto insurance; however, there’s a gap between shopping for a quote and being able to fully manage insurance online, since the service hasn’t been widely available. More than half (54%) also believe that “interacting with their insurance provider online is beneficial for convenience, cost and simplicity,” Esurance said in a statement. l

Manitoba Premier Greg Selinger announced in October that the province will invest $400,000 over the next two years in a new Prairie Climate Centre at the University of Winnipeg (UWinnipeg), making it the first province to sign a “right to healthy environment declaration” championed by the David Suzuki Foundation. The province will invest $200,000 in 2015-16 and $200,000 in 2016-17 in support of the centre, a partnership between the UWinnipeg and the International Institute for Sustainable Development that will be hosted by UWinnipeg’s Richardson College for the Environment. The centre’s goal is to provide municipal governments, the private sector, civil society organizations and other practitioners with practical information and tools to engage in effective climatechange adaptation planning. l October/November 2015

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â&#x20AC;˘ on the scene OTS On June 23, the Ontario Risk and Insurance Management Society (ORIMS) held its annual golf tournament at Deer Creek Golf Club in Ajax, Ontario. It was a well-attended and successful day, with more than 270 golfers taking part. RIMS members and their guests enjoyed a fantastic day of socializing and fun. ORIMS was pleased to announce that the tournament raised $3,000 in support of the Juvenile Diabetes Research Foundation. l

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• on the scene OTS Music Heals 4, an evening in support of muscular dystrophy research, was held June 17 at the Hard Rock Café in Toronto. Among others, the 4th annual fundraiser in support of Kadey Schultz and her family saw hundreds of insurance industry supporters attend and enjoy the live music performed by claims industry bands, including The Gavelheads, Diehpster and The Accidental Benefits. Kadey’s son, Emery, now eight, was diagnosed with Duchenne Muscular Dystrophy (DMD) in 2012. DMD is the most common fatal genetic disorder diagnosed in childhood. Funds raised from Music Heals benefit The Biggar Endowment for Muscular Dystrophy at the Holland Bloorview Kids Rehab Hospital in Toronto. This year’s event raised more than $42,000. Through the Music Heals events and everyone’s efforts, the Biggar Endowment has received over $275,000. l

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â&#x20AC;˘ on the scene OTS

180 golfers attended the 16th Annual WICC Ontario Golf Tournament on July 16 at Angus Glen Golf Club in Markham, Ontario. A perfect summerâ&#x20AC;&#x2122;s day greeted WICC golfers, eager to match skills against the Toronto 2015 Pan Am Games course. Participants enjoyed a BBQ lunch, silent auction, raffle and delicious dinner. A WICC cheque in the amount of $75,000 was presented to the Canadian Cancer Society by WICC Ontario board members Marian Adamson, chair of WICC Golf Committee; Marilyn Horrick, Ontario Co-Chair; and Kimberly Hrycko, Ontario treasurer. l

46 Claims Canada

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October/November 2015

www.claimscanada.ca

15-10-21 11:08 AM

FIRST GENERAL ANNOUNCES NEW OWNERSHIP FRANK AND ADRIAN MIRABELLI HAVE SUCCESSFULLY ACQUIRED ALL OUTSTANDING SHARES OF FIRST GENERAL

Michael Flatt and Lou Abbruzzese are pleased to announce the sale of First General to Frank and Adrian Mirabelli of Mirabelli Corporation. This transaction marks the completion of the succession strategy developed and managed by all parties. Over the last three years, the executive team has focused on successfully redefining the First General brand and enhancing the value it offers to its clients and network of restoration professionals. First General is proud of our accomplishments, our team and our network and are excited about the opportunities that lie ahead.

Frank Mirabelli, CEO, states: “First General’s market position and growth prospects are greater now than at any time in our history. The restoration environment is evolving rapidly and we have a strong foundation for sustained growth through new and innovative services. We will enhance our brand by continuing to deliver on the needs of our clients and strengthening industry partnerships. The executive team and I look forward to expanding our service offering and the number of First General offices in Canada, the United States and abroad. We look forward to the continued partnership of every First General office as we become the global premier restoration brand.” Michael Flatt will continue to consult the executive team at First General for the next five years. Lou Abbruzzese will pursue new interests.

Michael Flatt, former CEO, states: “This announcement marks the beginning of an exciting new chapter for First General. The new executive team has demonstrated a real understanding of our business and I am absolutely convinced that First General is in very good hands.”

Mirabelli Corporation provides Complete North American Facility Service to the worlds most successful Retailers and Commercial Landlords. Our service suite is customized to meet every clients unique service requirements. First General has been the leading choice for property damage restoration. With over 80 offices across North America we service property owners, insurance companies, policyholders and property managers during times of crisis. First General members honor their commitment to you, our customer, because meeting your expectations and restoring promptly and professionally is what matters. At this time, First General would also like to acknowledge the contribution of Michael Flatt and Lou Abbruzzese after more than 30 years with First General. Michael Flatt will continue to support the company in a consulting capacity, and we wish the best for Michael and Lou and their families in the future.

Enquiries may be directed to Frank Mirabelli at 416-522-3833

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15-10-18 9:40 PM