Claims Canada April/May 2010

www.claimscanada.ca

April/May 2010

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Contents APRIL/MAY 2010 • VOLUME 4 • NUMBER 2

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Cover Feature 12 Fighting Fraud Reducing fraud, and catching fraudsters, requires the assistance of all facets of the industry. Five sectors provide their take on how their part of the industry assists in mitigating fraudulent claims.

BY LAURA KUPCIS

Spotlight 20 Celebrating 10 Years QA Adjusting Company in Winnipeg is celebrating its 10th anniversary on April 10, and as owner Russ Malkoske looks back, he never could have imagined where his company would be today.

24 34

BY LAURA KUPCIS

Education Forum 42 Building on a Promise There are three types of bonds common to construction projects: bid bonds, performance bonds and labour and material payment bonds.

News Features 22 Damages Resulting from Fatalities

34 The Thin Red Line of Fraud Fighters

Determining damages for loss of companions and a new method for calculating loss of income.

The Canadian Association of Special Investigation Units fights together against fraud.

BY LAURA KUPCIS

BY THE BOARD OF DIRECTORS OF CASIU

24 Back to the Future?

The new Ontario auto insurance regulations contain several large reductions in benefits with an increased focus on optional benefits.

BY PHILIPPA SAMWORTH AND CARLIE SMITH

28 Blind to Fraud The new privacy guidelines fail to provide a balance between privacy issues and the public’s interest.

BY NORMAN GROOT

32 Preparing the Adjuster’s File for Litigation — Part II Maximizing the value of the adjuster’s file when retaining coverage counsel.

BY DON MCGARVEY

36 Anatomy 101 Knowing what parts of the body are often injured in an accident can provide an adjuster with greater insight into claims handling.

BY JUDY FARRIMOND AND ANGELA VERI

32 36 Departments 4 First Notice 44 On The Scene

38 McGrimmon v.

Personal

Columns

Depending on policy wording, an insurer might be obliged to defend misrepresentations on items for sale.

42 Education Forum

BY MICHAEL TEITELBAUM

F first notice A stroke speculatively caused by an auto collision entitles victim to accident benefits: FSCO The Financial Services Commission of Ontario (FSCO) has denied the appeal of an insurer that was ordered to pay auto insurance benefits to a man (now deceased) who suffered a stroke at about the same time he was involved in an accident at a Tim Horton’s drivethrough.

In Dominion of Canada General Insurance Company and D.M., a FSCO arbitrator found the claimant, referred to as ‘D.M.’ in the arbitration, panicked after hitting a car in the drive-through.

“This impact caused D.M. to panic as he knew that he had been drinking and if he was convicted of impaired driving he could lose his driver’s license and, thereby, his livelihood as a truck driver,” according to the initial FSCO arbitrator, and as cited by the arbitrator in the appeal, Lawrence Blackman.

“The arbitrator found that D.M. had various risk factors that made him vulnerable to a stroke. D.M.’s panic caused a precipitous rise in his blood pressure, which, interacting with his

susceptibility to stroke, led to the [stroke].”

In other words, the accident, and hence D.M.’s use and operation of the vehicle, led to his stroke, thus qualifying him for auto insurance accident benefits.

Dominion countered that the arbitrator’s findings of fact were merely speculative. The insurer argued it could have been just as likely the stroke caused

the accident, rather than the other way around.

If the stroke had caused the accident, D.M. would not have been entitled to collect benefits, since his stroke would not have been connected to the direct use or operation of a vehicle.

Blackman dismissed Dominion’s appeal, writing that the arbitrator’s findings of fact were “reasonable,” and based on the evidence of medical experts.

The standard of proof to override findings of fact is that an arbitrator has to have absolutely no basis on which to make the findings.

“I am not persuaded that there was a complete absence of evidence or positive proven facts before the arbitrator to support the inferences that D.M.’s stroke was due to a spike in his blood pressure rather than due to a history of prior hypertension or due to some unknown cause,” Blackman wrote. “Nor am I persuaded that the arbitrator misapprehended the evidence.” ●

Only one Class 4 impairment required for injury victim to be deemed catastrophically impaired: FSCO arbitrator A person injured in a motor vehicle accident requires only one marked (i.e.

Class 4) impairment to be considered catastrophically impaired, a Financial Services Commission of Ontario (FSCO) arbitrator has ruled. “[FSCO] Arbitrator [Elizabeth] Nastasi in Pastore and Aviva Canada Inc. . . . notes that the Superintendent’s Guidelines for undertaking catastrophic impairment assessments state that two marked impairments are required to render a catastrophic determination under the [S. 2(1.2)](g) criterion [of the Statutory Accident Benefits Schedule],” FSCO arbitrator Lloyd (J.R.) Richards wrote in his decision in Dean Fournie and Coachman Insurance Company.

“She determined that the [SABS] Guidelines are an assessment tool for physicians and are not incorporated into the legislation and therefore she is not bound by them.

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April/May 2010

“I agree with her. In light of this, I find that Mr. Fournie only requires one marked impairment to be deemed catastrophically impaired.”

Fournie was injured when he was struck from behind in August 2004 by a pickup truck as he was biking to Petrolia from his home in Sarnia. He applied to Coachman Insurance Company for a determination of catastrophic impairment under the schedule.

Coachman argued that he did not suffer a catastrophic impairment.

Fournie broke his left heel, ankle and thumb, in addition to losing some teeth.

Fournie’s position was that because he required two crutches and a short leg brace for pain relief, the Guides dictate that is a 50 per cent score for the purpose of meeting the

55 per cent threshold for a catastrophic impairment. When added to his 5 per cent for a skin disorder and 2 per cent adjustment order, that would make him catastrophically impaired.

Coachman said Guides assign a 40 per cent maximum to such impairments.

Fournie’s doctor, a clinical psychologist, said his patient rated a Class 4 impairment in his activities of daily living, adaptation to work and social functioning.

Richards found that just one Class 4 finding was enough to determine that Fournie had suffered a catastrophic impairment. ● www.claimscanada.ca

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F first notice Group disability benefits can be deducted from income replacement benefits: FSCO An Ontario arbitration decision has once again raised a question about the deductibility of collateral benefits. This time a decision determined that longterm benefits received from a group disability insurance plan underwritten

by Sun Life can be deducted from income replacement benefits underwritten by The Co-operators.

In making the decision, Financial Services Commission of Ontario (FSCO) noted this was the first case to look at S. 2(9) and (10) of the Statutory Accident Benefits Schedule (SABS), which amended rules on the deductions of collateral payments. S. 7 (1) of the SABS notes that income replacement benefits can be deducted by net weekly benefit payments “under any income continuation benefit plan.” S. 2(9) notes that payments for loss of income under an income continuation benefit plan “shall be deemed to include” periodic payments of insurance.

In Mala Sharma-Singh and Co-operators General Insurance Company, Mala Sharma-Singh, 44, was injured in a motor vehicle accident on May 17, 2006. At the time of the accident, she was employed by the Government of Canada. On Aug. 17, 2006, she began receiving LTD benefits from a group disability insurance plan underwritten by the Sun Life Assurance Company of Canada, payable monthly in arrears.

As Sharma-Singh continued to receive LTD benefits from Sun Life, The Co-operators continued to deduct them from her income replacement benefits.

The Co-operators suspended its income replacement benefits payments as of Aug. 6, 2009. The company reinstated them as of Dec. 9, 2009, and they continue to be payable.

Counsel for Sharma-Singh argued, among other things, that the Sun Life benefits did not, strictly speaking, count as an “income continuation”

benefit, because there was a 13-week interruption — or discontinuation — of payments between the time of the accident and the time of the payments.

Sharma-Singh’s counsel cited FSCO arbitrator David Leitch’s decision in Codling-Mokoena and CAA Insurance Company (Ontario), which found that a lengthy delay in payments meant the benefits did not count as “income continuation.”

But Leitch found in Sharma-Singh that his previous argument in CodlingMokoena “overlooked the effect of the ss. 2(9) and (10) amendments on the interpretation of section 7(1).”

“While the present case involved a long-term disability plan with a significant delay in first payment, 13 weeks, I am no longer of the view that this fact alone prevents me from finding that section 7(1) applies to authorize the deductions sought by Co-operators.” ●

Ontario arbitration case may have widened definition of ‘catastrophic impairment’ Ontario’s definition of a “catastrophic impairment” may have widened as a result of a recent decision by the Financial Services Commission of Ontario, lawyers are saying about the case of Aviva and Pastore.

In Aviva and Pastore, a FSCO director delegate ruled there is no inconsistency in defining an auto injury victim as “catastrophically impaired,” even though she suffered only a single Class 4 impairment, and her physical and psychological injuries fell well below the 55 per cent threshold for a person to be classified as catastrophically impaired under s. 2(1.1)(f) of the province’s Statutory Accident Benefits Schedule (SABS). If an auto accident victim is found to be catastrophically impaired, he or she can claim medical and rehabilitation benefits of up to $1 million, as opposed to the limit of up to $100,000 for non-catastrophic impairments.

In making his decision, FSCO Director Delegate Lawrence Blackman relied on s. 2(1.1)(g) of the SABS which says 6

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April/May 2010

a person may be catastrophically impaired if “an impairment . . . results in a class 4 impairment (marked impairment) or class 5 impairment (extreme impairment) due to mental or behavioural disorder.”

“In short, there is no ‘inconsistency’ in an insured person meeting the ‘g’ definition of catastrophic impairment but not the [55 per cent whole body impairment] definition in ‘f,’“ Blackman wrote

in his ruling.

In a bulletin on the case, law firm Dutton Brock observed the director delegate also rejected the argument that in a chronic pain case it is inappropriate to “double count.” “In other words, when assessing physical impairment, the impairment ratings have already taken into consideration issues relating to pain and therefore, when examining the mental behavioural impairments under Chapter 14, you cannot recount pain as a grounds for a mental behavioural disorder.”

Blackman disagreed.

“The plain language of clause 2(1.1)(g) of the Schedule requires an impairment that, in accordance with the Guides, results in a class 4 (marked) impairment or a class 5 (extreme) impairment due to mental or behavioural disorder,” Blackman wrote. “There is no statutory requirement that the arbitrator dissect the mental or behavioural disorder into supposed constituent parts.” ● www.claimscanada.ca

Alexander Holburn Beaudin & Lang LLP Barry Spalding Burchells LLP Gasco Goodhue LLP Hughes Amys LLP McLennan Ross LLP Martin Whalen Hennebury Stamp Robertson Stromberg Pedersen LLP

F first notice Fulfilling legal obligation to advise of policy cancellation does not prove insured knew his policy had been cancelled: FSCO An insurer that has satisfied its legal requirement for policy cancellation has not automatically proven the insured knew his policy had been cancelled, an Ontario arbitrator has ruled.

In Ersin Aksoy and Markel Insurance Company of Canada, the Financial Services Commission of Ontario (FSCO) found Markel had to pay Ersin Aksoy income replacement benefits and housekeeping expenses.

Aksoy was confined to a wheelchair after serious injuries he sustained in December 2006, when he lost control of his Jeep Grand Cherokee in Toronto and collided with a tractor-trailer traveling in the same direction.

Markel denied his application for income replacement benefits and housekeeping expenses. Kingsway General Insurance Company wrote the policy in 2006, but Markel was the defendant in the arbitration because it handled Aksoy’s claim for accident ben-

efits.

Markel maintained Aksoy knew or ought to have known that he was driving without an insurance policy, which had been cancelled a few months prior to the crash. Kingsway cancelled the policy for non-payment.

FSCO arbitrator Fred Sampliner noted Kingsway had in fact issued a policy cancellation notice to Aksoy by registered mail to the last-known address the insurer had on file. Aksoy had moved from that address in mid-2006 without notifying the insurer.

The signature on delivery was not Aksoy’s name, and Markel argued it was entitled to infer the person was authorized by Aksoy to pick up his mail for him. Aksoy denied he ever received the notice of cancellation.

“Markel contends that Canada Post’s verifications alone are sufficient evidence that Mr. Aksoy or someone authorized to act for him picked up

Kingsway’s registered letter, and therefore knew he did not have insurance at the time of the accident,” Sampliner wrote. “Case law has established that this issue is an individualized inquiry of the entire circumstances, rather than whether Kingsway satisfied the statutory requirement to send Mr. Aksoy the cancellation notice by registered mail.

“Thus, I reject Markel’s position that satisfaction of an insurer’s statutory requirement for policy cancellation equates with Markel’s burden to prove Mr. Aksoy knew or reasonably ought to have known he did not have insurance.”

Kingsway had also advised Aksoy’s insurance agent the policy had been cancelled. But there was conflicting evidence in the arbitration as to whether or not the agent had ever explicitly told Aksoy the policy had been cancelled.

The agent did not keep records of the discussions. ●

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

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

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

Phyllis Wright Print Production Manager

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

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Produced by the publishers of Canadian Underwriter magazine.

A bi-monthly magazine (6x per year), Claims Canada is published by BIG Magazines LP, a div. of Glacier BIG Holdings Company Ltd. Business Information Group is located at: 12 Concorde Place Suite 800, Toronto, ON, M3C 4J2.

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

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

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Claims Canada

April/May 2010

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

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

www.claimscanada.ca

THANK YOU! CRDN salutes the following companies for their support and contributions to our 2009 charity suit drive to benefit Dress Your Best: The Dominion of Canada General Insurance Company Allstate Insurance Company of Canada Aviva Canada Inc. Chubb Insurance Company of Canada Claimspro The Cooperators Cunningham Lindsey Desjardins General Insurance Co & The Personal Insurance Institute of Ontario Intact Insurance McLarens Canada National Restorations Pilot Insurance Company Portage Mutual Insurance Royal & SunAlliance Canada RBC Sovereign General Insurance Company The Wawanesa Mutual Insurance Company TD Home & Auto Insurance Toronto Insurance Women’s Association Xl Insurance Company York Fire and Casualty Insurance Company These insurance industry fashionistas purged their closets and together donated more than 14,000 lbs (roughly 12,000 items) of gently used men’s and women’s business suits and accessories as part of the third annual suit drive to benefit Dress Your Best and Dress For Success Toronto – not-for-profit organizations that help financially disadvantaged men and women dress for interview success, acquire jobs and restore financial self-sufficiency.

2010: The Challenge is On! This year’s suit drive, June 21st through July 2nd, 2010 supports Dress Your Best – a not-for-profit registered charity that contributes to the relief of poverty in the GTA and surrounding areas. Dress Your Best provides professional attire to low-income Canadians enabling them to thrive in their job search and obtain gainful employment.

The “Dress Your Best” & CRDN Suit Drive accepts the following:

As the sponsor of the suit drive, CRDN will distribute garment bags to interested insurance offices and then collect, launder or dryclean, press and deliver all donations from participating offices to the Dress Your Best clothing bank in Toronto.

Women’s Clothing & Accessories: Two piece suits, blazers, blouses, tops, pants, skirts, dresses, sweater sets, spring jackets, winter coats, hats, gloves, scarves, boots, office footwear, belts, purses and dress scarves.

To get involved with CRDN’s 2010 charity clothing drive:

Men’s Clothing & Accessories: Two piece suits, blazers, shirts, pants, sweaters, trench style jackets, winter coats, hats, gloves, scarves, boots, office footwear, belts and ties.

1. Call the Certified Restoration Drycleaning Network (CRDN) prior to

June 1st, 2010, at (416) 258-0433 to request and receive an office

laundry bag and Info Kit.

Please provide only items in excellent condition (no obvious tears, stains, missing buttons or broken zippers).

Visit www.dressyourbest.ca for more information about the organization.

2. Ask for a Dress Your Best coordinator or email: garry.bradamore@crdn.ca 3. Use the Info Kit to challenge co-workers to clean out their closets and bring gently used professional clothing to your office between June 21st and July 2nd.

4.

CRDN will arrange a pick-up of your generous donations and professionally clean, press and package all garments for Dress Your Best.

We then will deliver the donations to the clothing bank, where men and women will be able to “suit up” for the workforce.

CRDN Certified Restoration Drycleaning Network®

National Claims Assignment: 1-866-897-CRDN (2736) • www.crdn.ca

Message from the President La Plume du Président PATTI KERNAGHAN I am very pleased to report that the CIAA strategic planning initiatives are taking shape. By the time this message goes to print, some of our absolutely key projects will be underway and we will soon deliver some important changes to the membership. Our critical areas of focus are communication, education, advocacy and benefits.

The CIAA/CICMA Ontario Joint Conference in February was not only a sold out event, but also a huge success. Great attendance, attentive audience, fabulous speakers and even a terrific comedian at lunch made it an event people will want to ensure they attend next year! Congratulations to the very hard working planning committee! On the communication front, we distributed a condensed version of the CIAA Insurance Industry Stakeholder Survey on a memory stick, to all joint conference attendees. This same survey will be made available to all CIAA provincial association presidents for local distribution in April. We will also upload it onto our website in May for the members.

Our next communication initiative is to provide provincial presidents with an overview of our strategic goals and objectives, so they can ensure all members are aware of the direction and the benefits we are moving toward, Our communication methods have already started to shift with the use of an e-blast NewsFlash to bring members timely information.

Our biggest educational goal is to develop a subsidiary to the current, highly esteemed, Chartered Loss Adjuster (CLA) designation, providing members an additional opportunity to distinguish themselves as insurance claim professionals. As independent adjusters we build our careers on the fundamentals of claims adjusting and should be recognized in the public for the educational achievements we attain. Our plan is to achieve that recognition through CIAA’s professional accreditation program.

Other educational goals are already starting to take shape with our Writing Skills for Claims Professionals webinar in March. The response was terrific and at this point a second date has been added. On the webinar front we have several others in the pipeline, specifically for claims professionals, providing concrete tools to our members for application to their claims work today.

In February my husband, Pierre Coupey, and I enjoyed an entertaining evening with AESIQ in Montréal at their Sugar 10

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April/May 2010

J’ai le grand plaisir de vous informer que les projets du programme de planification stratégique de l’ACEI commencent à prendre forme. Au moment de mettre sous presse, certains de nos projets essentiels sont en bonne voie d’être réalisés et nous annoncerons bientôt quelques changements importants. Les principaux secteurs visés sont les suivants: communication, formation, appui et avantages.

La conférence conjointe ACEI/ACDSA de l’Ontario, qui s’est tenue en février, n’a pas seulement affiché complet. Elle a, de plus, connu un énorme succès. Une foule nombreuse, un auditoire attentif, des conférenciers hors pair et même la présence d’un formidable comédien durant le lunch, en ont fait un événement que personne ne voudra manquer l’an prochain.

Nous félicitons le comité de planification qui s’est surpassé! Au plan de la communication, nous avons distribué à tous les participants de la conférence conjointe une carte mémoire flash d’une version condensée de l’enquête de l’ACEI sur les parties prenantes de l’industrie de l’assurance. Cette même enquête sera communiquée en avril à tous les présidents des associations provinciales de l’ACEI, pour usage local. En mai, elle sera aussi téléversée sur notre site web pour tous les membres.

La prochaine initiative que nous prendrons en vertu du plan communication, consistera à envoyer aux présidents provinciaux un aperçu de nos buts et objectifs stratégiques, leur permettant ainsi de s’assurer que tous les membres connaissent l’orientation et les avantages que nous poursuivons. Nos méthodes de communication ont déjà commencé à évoluer avec l’utilisation d’un publipostage électronique ‘NewsFlash’ visant à fournir aux membres les informations opportunes.

L’objectif majeur du plan formation est de mettre au point un classement subsidiaire à l’actuel et très convoité titre d’expert en sinistre agréé (ESA), offrant ainsi à nos membres un outil de plus pour se démarquer en tant que professionnels de l’assurance des sinistres. Comme experts indépendants, nous bâtissons nos carrières sur les principes de l’expertise des sinistres et la formation qui est la nôtre devrait être connue du public. Le programme d’accréditation professionnelle de l’ACEI nous permettra d’obtenir cette reconnaissance.

D’autres objectifs du plan formation ont déjà commencé à prendre forme avec, en mars, le webinaire Writing Skills pour les experts en sinistres professionnels. Il été si populaire qu’il sera de nouveau offert à une date ultérieure. Nous projetons d’offrir www.claimscanada.ca

Shack celebration — they know how to party! Linda Brunette, the national CICMA president joined me at the celebration. It was a great opportunity for the two presidents to be together.

With over 368 attendees, I was honoured to represent the CIAA. My personal thanks to Sandra Ross, Charles Berthiaume, Jean-Marc Laurin and Denis Duchesne who made it a great evening.

On a personal note I’d like to comment on the Vancouver Olympics. This truly was a once in a lifetime opportunity for Canadians, especially Vancouverites, to really show the warmth and generous nature we are known for around the world. We took in many of the events in Vancouver and were excited with the spontaneous enthusiasm. Pierre and I were in New York for the last few days of the games. My Canada hoody gave us away and with that we had a warm welcome wherever we went — to include one guard in the Museum of Modern Art breaking into Oh Canada! What a great time for Canadians! ■

plusieurs autres webinaires s’adressant plus précisément aux experts en sinistres professionnels et leur offrant des outils de travail concrets et actuels.

En février, mon mari, Pierre Coupey, et moi, avons passé une agréable soirée à Montréal avec l’AESIQ qui se réunissait dans une cabane à sucre. Ce fut une fête mémorable! Linda Brunette, la présidente nationale de l’ACDSA, a aussi assisté à la fête, une occasion rêvée pour les deux présidentes d’être réunies. Plus de 368 personnes étaient présentes. Ce fut pour moi un honneur de représenter l’ACEI. Je remercie personnellement Sandra Ross, Charles Berthiaume, Jean-Marc Laurin et Denis Duchesne pour cette merveilleuse soirée.

Sur une note plus personnelle, permettez-moi de faire quelques commentaires sur les Olympiques de Vancouver. Ce fut vraiment une occasion unique pour les Canadiens, et surtout pour les vancouvérois, de faire connaître au monde entier combien nous méritons notre réputation de peuple chaleureux et généreux. Nous avons assisté à plusieurs événements à Vancouver et avons été charmés par l’enthousiasme débordant qui y régnait. Pierre et moi étions à New York lors des derniers jours des Olympiques. Mon anorak Canada a vendu la mèche et, partout, nous avons été accueillis chaleureusement — jusqu’au Museum of Modern Art où un gardien a entonné O Canada en nous apercevant! Une date mémorable pour les Canadiens! ■ Translation provided by Henry Arcache, Themis Translations.

NATIONAL EXECUTIVE 2009 – 2010 PRESIDENT Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300-1575 West Georgia Street Vancouver, BC V6G 2V3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 Email:pkernaghan@kernaghan.com 1ST VICE-PRESIDENT Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 Email: Mary.Charman@crawco.ca 2ND VICE-PRESIDENT Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 401 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca

www.claimscanada.ca

SECRETARY Marie C. Gallagher, FCIP, CRM McLarens Canada 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 Email: marie.gallagher@mclarens.ca TREASURER Randy P. LaBrash, CIP, CFE, CFEI Crawford & Company (Canada) Inc. 300 – 191 Lombard Avenue Winnipeg, MB R3B 0X1 Phone: (204) 947-2340 Fax: (204) 943-9168 Email: Randy.Labrash@crawco.ca PAST-PRESIDENT Reno Daigle, CIP, CLA, FCIAA Crawford & Company (Canada) Inc. 326 McIntyre Street W. North Bay, ON P1B 2Z1 Phone: (705) 476-2120 Fax: (705) 476-9280 Email: Reno.Daigle@crawco.ca

EXECUTIVE DIRECTOR Patricia M. Battle Canadian Independent Adjusters’ Association/ L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Avenue West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 Email: pbattle@ciaa-adjusters.ca DIRECTOR James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca

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

DIRECTOR Jean-Marc Laurin, FPAA, CRM, FCIAA Cunningham Lindsey 1250 Guy Street, Suite 1000 Montreal, PQ H3H 2T4 Phone: (514) 938-2124 Fax: (514) 938-5445 E-mail: jmlaurin@cl-na.com

April/May 2010

Claims Canada

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BY LAURA KUPCIS

Fraud costs the insurance industry an estimated $1.3 to $2.6 billion annually — 10 to 15 per cent of claims paid. Reducing that figure takes the dedication of all areas of the claims field. he insurance industry is working more closely together in the battle against fraud. As a result of this, for the first time in Canada, nine individuals are facing section 467 Criminal Code charges with respect to insurance-related activities. This charge — acting for or instructing on behalf of a criminal organization — is usually reserved for drug rings and outlaw motorcycle gangs. If not for the dedication and cooperation among all facets of the industry, these fraudulent activities may not have been detected, these charges may not have been laid and these alleged criminals could still be on the road increasing claims costs and endangering innocent victims.

In order to catch fraudsters and further reduce fraudulent activity, all areas of the insurance industry must continue work together, delegates at the 43rd Annual CICMA/CIAA Ontario Chapter Joint Conference heard.

The sophistication level of fraudsters is growing exponentially, with a diversity of characteristics not seen previously. The staged accidents are far more advanced than they were in the

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past, with far more thought and preparation put into the execution of the “accident.”

Relationships and teamwork are extremely important in combating fraud. Project 92, which was initiated in 2007 and saw police activity by 2008, is an ongoing investigation into staged accidents which has succeeded because of partnerships. During the investigation of a complex and relatively dangerous staged collision conspiracy 15 people have been convicted of 38 charges in association with 12 distinct orchestrated collisions, Kirk Quinn, Ontario team leader, injury rings investigative unit, IBC, said. “Those numbers in itself are a tremendous acknowledgement of the teamwork that’s required,. . . if you understand how many hurdles there are from the point of offense detection to the point of conviction then having 15 people convicted of 38 charges is a tremendous accomplishment.”

“There are more good results to come, I promise that,” he added.

Under the criminal investigation, 38 people have been charged with

more than 220 criminal offenses in 17 alleged staged collisions. More than 50 collisions and dozens of claimants have been identified as part of the scheme, due to partnerships between member companies, partners and the IBC. Those who have been brought up on charges are but one individual in a complex web that can include tow truck drivers, paralegals, mechanics and so on.

“We’re talking about an organization of people with a purpose,” Quinn said. “An organization working together to achieve the goals and what we’re talking about is organized crime.” These groups think in terms of maximized profits — just like an entrepreneurial business — in terms of costs and profits and investments.

They steal identities of providers, use salvage vehicles with mock repairs, they do what’s required to increase productivity, they withhold payments to the claimants in order to improve the bottom line. “It’s a cold and calculated business for them,” Quinn said.

April/May 2010

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In house staff Claims managers, directors of claims or vice presidents of claims face numerous challenges in their day-to-day operations, Dan Little, corporate claims technical advisor, investigate services, The Economical Group, said.

When it comes to claims handling, interaction between claims representatives and the insureds is often limited to a short conversation, making fraud detection difficult. “In our experience, fraud is identified by less than 10 per cent of the people in our claims department,” Little said.

There must be a place for those identifying fraud to take the potentially fraudulent claims. If there are 10 per cent of adjusters identifying fraud and nothing is done with those files, the number of adjusters reporting potentially fraudulent claims will decline to near zero, Little adds. When a company starts to look at leakage and fraud it needs to determine how to handle suspected fraud files and how to ensure 100 per cent of employees are detecting potential fraud.

“If you are serious about suppressing fraud, you need to have two things in place at the company you work for: Number one is ongoing fraud awareness training and number two you must have internal and/or external resources available to deal with the fraud cases once you find them,” Little says. “If you are missing either one of those, your fraud investigation strategy is going to fail.”

To investigate loss or fraud, internal and external resources are leveraged, including private investigators, professional engineers, cause and origin experts, accident reconstructionists, forensic accountants, independent adjusters and legal counsel.

Each resource plays a role in the investigation. The private investigator provides surveillance — usually in the area of personal injury — because adjusters are not licensed, which is used on files where all other lawful means to collect information have failed, Little said. It is determined that in order to determine whether or not a claim is fraudulent surveillance information will be required.

“Make certain that the firms that you use could stand up to the scrutiny of the privacy commissioner’s office,” Little said.

Independent adjusters continue to play a valuable and necessary role in the investigation of claims and fraudulent claims. “Our use of independent adjusters continues to be triggered by claims volume or where there is a specific skill set met,” Little said. He went on to note that a very limited number of independent adjusters have extensive fraud investigation training and suggested that adjusters increase their fraud training through associations such as the International Association of Arson Investigators, among others.

‘The point at which a lawyer is retained to assist an insurer is also the point where a plaintiff’s lawyer will say you formed your opinion on the validity of a claim,” he said. “It is important to recognize that the time you decide to retain counsel becomes equally as important as the time you decide to use surveillance or other experts.”

While a fraud file is often based on an investigation that began years ago, the courts judge the merits of the case based on law that has evolved. “Fraud defense cases are unique . . . and the results at trial are often unpredictable,” Little said. When hiring defense counsel ensure the lawyer has trial experience handling fraud cases in addition to knowledge of the intricacies of the type of experts required in fraud detection.

“The analysis of a claim where you feel elements of fraud exists requires a careful review prior to being denied,” he said. “Litigation of a fraud file is nothing that you should fear provided you have done a thorough and objective investigation.”

“The courts will allow us to take position on the denial of a claim, provided it isn’t done recklessly,” he said.

“Before and since Whiten v. Pilot, insurers have conducted, and thorough investigations have been successful in, defending fraudulent claims.

From Britton v. Royal Insurance in 1866 to Sagl v. Chubb in 2009, there are

various cases that provide insight into how these cases should be handled.”

When it comes to claims handling, investigation is integral as it is not only invaluable for fraud detection and investigation, but to help identify subrogation opportunities. Fraud and arson cases do not get less expensive; spend money at the front end of the investigation so that evidence that is objectively obtained can be collected and informed decisions can be made.

“Too often policy defenses are waived in the interest of providing faster claims services,” Little said. “The courts will have little sympathy for us if we waive our rights by our own actions.”

Independent perspective The independent adjuster sits in a bit of a different place in the process, because of their more hands-on role in the handling of a claim. “We’re often in the front line of the investigations, we’ve been delegated a task to gather evidence,” Dan Buch, branch manager and special investigations, Cunning-

ham Lindsey Canada, said. The duties of an independent adjuster in the context of a fraud investigation are even higher than those specified in the adjuster’s code of conduct, Buch said.

“I think that the duties for independent adjusters in fraud situations are such that we have to give an even higher level of service in the likelihood of litigation,” he said. “Our files have to be properly prepared in such a way that topics from a litigation standpoint are nothing less than professional.”

The investigating of a claim must have some objectives to it, which are three-fold. The first is to establish whether the risk or contract is how it was intended by the underwriter. The second is to determine whether the subject of the claim actually exists.

Sometimes in fraud cases the item in question disappeared long before the claim was reported, and therefore the item does not exist in the context that is has been presented. As a result, the adjuster must investigate the existence of the item and the context within which it is being presented. The third

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onciliation with the evidence as presented.”

The issue of video masking extends beyond the added cost it would create.

When surveillance is being done, it is not know whether someone might potentially be relevant to the case or not.

criteria is the incident itself: Did the incident occur and did it occur as it is being reported.

During the investigation itself, independent adjusters face a number of issues. These include, but are certainly not limited to, issues with credibility, testing the insured’s credibility, and establishing methods to test that credibility. Adjusters go through a preliminary stage where the investigation itself 16

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is planned out and some initial investigation occurs. This usually includes the first statement or the first piece of evidence gathered. “There is no point in collecting this evidence unless we circle back and try and test this evidence,” Buch said. Adjusters often have to “circle back” to re-evaluate evidence. By re-questioning the insured, it helps to verify the claimant’s credibility and ensure that his/her story remains congruent with each telling. As the information is collected coverage issues and credibility must always be kept in mind as any misrepresentations in the context of the insurance contract is, in essence, a breach.

In short, evidence gathering as an independent adjuster is not unlike evidence gathering as a staff adjuster. “We find ourselves grouped with other experts in the process and subject to the decisions of our clients,” Buch said. “We’re not often left with the ultimate decision, it’s our principles that are making the decision, but we are involved in the process . . . one of reconciliation with coverage and rec-

The private investigator A recent guideline issued by the Office of the Privacy Commissioner of Canada states that third parties must be blurred out in surveillance footage, creating a massive increase in costs for insurers.

The OPC published guidelines on covert surveillance in the private sector in May of 2008. By and large, the industry had no issue with most of the recommended practices, save for the issue of pixelating third parties, Brian King, president of King Reed & Associates, said.

The issue came about because of a complaint to the privacy commissioner based on surveillance conducted in 2004. The privacy commissioner received the complaint in 2005 and, within days of the commissioner ruling on the case — in May 2009 — draft guidelines came down with very little industry consultation, King said.

The case in question involved typical surveillance on a third-party claim.

The investigator videotaped a woman (the subject of the surveillance) coming out of a store. She was accompanied by her sister (who lodged the privacy complaint) and her sister’s daughter.

The case involving the surveillance subject settled. But the sister made a complaint to the privacy commissioner, was arguing that her right to privacy was violated when she was captured on the investigator’s videotape.

The sister was never identified, her name was never used in the report, and the tape never left the possession of the insurer or the legal counsel, King said.

As a result of the case, the privacy commissioner issued its new guidelines, calling for videotaped surveillance to mask the identities of third parties. However, masking involves extreme labour costs, he continued.

King filmed a test videotape roughly 36 minutes long. It took 41 hours to mask the third parties for that tape, King said.

“So what insurer is going to pay for surveillance that might have been two www.claimscanada.ca

against you. When you disagree like we did they can make an application to federal court to get a ruling.”

A good plaintiff’s lawyer will take a good fraud case rife with good evidence and fraud and turn it around and point out all the claims handling mishaps and missteps taken and turn the whole trial into a bad faith claim. days or 16 hours, another 41 or 50 hours for someone to mask the third parties?” King asked.

“We responded by agreeing to all of the points the privacy commissioner outlined, with the exception of the last one which was video masking,” King said. “The reason we did this with counsel is we wanted to challenge this in federal court as being unconstitutional with respect to litigation and all the unfairness, etc.

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“[The privacy commission had approximately] 45 days in which to appeal our decision not to comply and take this to court — we never heard word one. So I don’t know what that tells us as an industry, because we said: ‘Listen, we are not going to comply. We want the federal court to decide.’ They did not even respond.”

The issue of video masking extends beyond the added cost it would create.

When surveillance is being done, it is not know whether someone might potentially be relevant to the case or not. “By altering videotape prior to trial, we are actually altering evidence,” King said. Additionally the issue of unreasonable expectation of privacy in public places is raised. While a person’s home is their sanctuary, a person out and about is captured on countless numbers of cameras on a daily basis.

In the end, however, King points out that the privacy commissioner is effectively an ombudsman. “They have no power to fine you, they have no power to get you to do anything,” he said. “The only thing they can do is rule

The legal perspective After all of this work the case often ends up in court, but when insurance companies got to court they face a completely uneven playing surface, said James Dunn, partner, Blouin, Dunn LLP. “We arrive in a courtroom before a judge and a jury and we are the insurance company with the money . . . and we’re facing an individual person who is all by himself or herself with no money,” he said. “So when we give lead the judges think that they have to help this poor individual . . . we have to claw our way forward at the beginning of the trial.”

Between 20 and 30 per cent of all property and casualty claims have some element of fraud, according to a December 2006 article published in Canadian Underwriter. “I wonder if you look at your portfolio of claims and whether you have identified 20 or 30 per cent of the active files that have some element of fraud in them,” Dunn said. “I suspect that it’s a much smaller percentage than that, but if these statistics are accurate, then in each of your claims portfolios that’s the percentage of fraud files, or files that have some element of fraud in them, that you should be recognizing.”

The Canadian Coalition Against Insurance Fraud reported in 2000 that 46 per cent of Canadians believe it is easy to submit a fraudulent claim and that five per cent believe it’s acceptable to pad the claim. “As everyone knows the policy of insurance is a policy of utmost good faith and the insurer owes that to the insured and the insured supposedly owes that to the insurer,” he said. “In practice, however, the situation is different. We are held to a much stricter testing and handling of claims than insureds are.”

The Ontario Court of Appeal has recognized that there is a lower standard for insureds when presented the claim. Courts will ensure that honest mistakes and some exaggerations are not held against an insured. Two separate cases, Pereira v. Hamilton Townwww.claimscanada.ca

ship Farmers’ Mutual Fire Insurance Co. and National Development Corporation Limited v. The Halifax Insurance, found that it is doubtful that many proofs of loss filed in insurance claims are exactly accurate. Some leeway must be made to allow for puffery or establishing the negotiating position. If it is determined that the claimant is indulging in puffery, or attempting to establish a negotiating position, fraud should not be imputed to the claimant.

“Part of our job is to differentiate between those honest mistakes, those embellishments, those exaggerations, and actual fraud,” Dunn said. “The stakes in doing that are extremely high.

On the one hand, if we are able to successfully prove fraud and defend a claim on that basis, then nothing has to be paid on the claim itself. The only cost exposure [for the claims industry] is to pay for defense lawyers.”

On the other hand, if the fraud is not proven successfully, the claimant receives 100 per cent of the claim, plus interest, in addition to aggravated damages, punitive damages and costs.

In a number of cases, fraud is not proven because a party other than the insured committed the fraudulent act.

“Realistically what you have to prove is that the insured intended to commit the fraud, that’s the test,” Dunn said. The strategy at the outset of these claims is to identify the insured and deal with the insured only as much as possible. Take the statement from the insured, get the insured to sign it, if possible obtain a video statement. “Deal with the insured as much as you possibly can because it’s the insured’s credibility that you are going to have to destroy at trial if you are going to successfully establish a fraud defense,” he added.

A good plaintiff’s lawyer will take a good fraud case rife with good evidence and fraud and turn it around and point out all the claims handling mishaps and missteps taken and turn the whole trial into a bad faith claim. Ensure that a claim is reviewed by a supervisor or a committee to ensure everything is in order and there’s nothing missing.

When it comes to investigating fraudulent claims, while still avoiding www.claimscanada.ca

bad faith claims, there are a few things to bear in mind: respond to the claim objectively, manage documents carefully and gather evidence to prove the fraud.

When handling claims, a company-wide protocol can help prevent any mishaps and reduce allegations that the adjuster is out to get the claimant, while frequent review of a file by peers, supervisors or claims committees can help maintain objectivity.

When writing claims notes, be very careful about what is written, as privilege can protect some documents, but it can also be revoked. Notes and investigation reports made for the purpose of adjusting a claim, will not necessarily be privileged, Dunn said.

In the end, ensuring that claims are investigated in their entirety, that partners and vendors work together to fight fraud and that fraudulent claims are reported instead of settled will help to mitigate the cost of fraud.

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April/May 2010

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19

S spotlight

Celebrating

10 Years

QA Adjusting Company in Winnipeg is celebrating its 10th anniversary on April 10, and as owner Russ Malkoske looks back, he never could have imagined where his company would be today.

BY LAURA KUPCIS

fter 10 years as the owner of an independent adjusting firm, Russ Malkoske still can’t believe just how successful QA Adjusting Company has been. It has far exceeded his wildest visions.

“I didn’t think that I would be this successful,” he says. “I really thought 10 years ago I would have a small company that I could continue to work on either a full- or part-time basis and do that for a number of years.”

But that has not been the case for Malkoske and QA Adjusting Company.

“I’m delighted to have set up a company 10 years ago that has made it this

A

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long and is still very successful and growing,” he says. “I love the opportunity to work with young team; I’m by far the old guy here.”

There are lots of opportunities and challenges for the company to assess.

And while a shrinking client base — partly due to mergers on the insurance side — can be a challenge, it’s about continuing to look for new opportunities as a means to staying relevant.

There are opportunities that present themselves every day, whether the staff go look for them or the opportunities come to the company. “It’s seeing if you can marry the services you can provide

with those opportunities,” Malkoske says, adding the company tries to find a niche area where it can offer a particular service for a particular client. But the challenges for a small firm are no different than those of a large firm. “We’re a very small market in Manitoba, so I am fortunate in that I compete in a very qualified environment,” he says. “My competitors are good so it makes us good, so what you end up doing then is trying to find an area where you can offer something that another — a larger competitor in particular — can’t.

And to be frank, that’s flexibility: I can adapt to anything overnight.” www.claimscanada.ca

Helping new adjusters QA Adjusting has fluctuated in size over the years. While Malkoske, like all business owners, is having difficulty attracting experienced adjusters, he says he has been very successful in bringing on two staff members who have worked their way up to full-time adjusting.

Both Cory Malkoske and Adrienne Salem (nee Tucker) started their career at QA Adjusting in a support position.

Through training and completion of Insurance Institute of Canada courses, they are now licensed adjusters at QA Adjusting.

Cory began working with the company shortly after the business was opened as a means to help his father set up the computer systems and web site.

At the end of the summer, when he was scheduled to return to university, he decided to pursue a career in insurance.

He continued his studies, but added Insurance Institute courses to his workload as well. After graduation, he came to work at QA Adjusting full time.

Salem came to QA Adjusting with a number of degrees under her belt, but had had difficulty finding a career that peaked her interest. After working in a support role and learning about the industry, she signed up for courses and is now a full-time adjuster with strong liability interests.

QA Adjusting might soon have a fourth adjuster at the firm. Malkoske is currently showing another potential recruit the ropes. At present, the potential adjuster works in the field of aviation, but concerned for his future, he is observing the ins and outs of a career in adjusting. “He is very interested in the business,” Malkoske says. “But it is a big change and insurance isn’t as sexy as aviation.”

The insurance industry in reality is a very interesting business to work in, but people never ask about it. “My Dad was an insurance broker so I grew up with it. Having my son working here, yes we talk insurance. But I like to tell people if there’s a fire on your street you walk down and look at it; I walk down and look at it and get paid to be there!” he says.

Staff, which also includes Malkoske’s wife who takes care of the books and a full- and part-time support staff, are very close knit. They are able to help www.claimscanada.ca

each other out as required. “We are supportive, not competitive,” Malkoske says. “I’m sort of like the captain of the ship here, but the crew does most of the work.”

And despite being such a small group, everybody attends formal staff meetings to go over the agenda and determine who is responsible for what and where things are progressive. It forces everyone to take accountability for their actions and allows actions to progress and the company to move forward.

Knowing when to grow Previously QA Adjusting had a branch office in Brandon and a service office in Dauphin, but things didn’t work at that time and everybody parted

“We are always looking for opportunities and exploring the chance to expand our operation” ways amicably. Malkoske points out, however, that since the company is computer-based it would be easy to have other adjusters working out of their homes with ease. “We are always looking for opportunities and exploring the chance to expand our operation,” he says.

For a small firm in Manitoba, it can be tough to access national markets.

While Malkoske notes that the company gets a lot of support from national insurance companies, it is tough to stay in front of them. It is not just the challenge of things on a national level, he says, but a reflection of how the personal contact is gone. In the past, travel to Toronto, Vancouver and Edmonton was a frequent occurrence as a means to keep in touch with clients and friends. Now communication is through email and while the people are still good people, he doesn’t know them personally and they don’t know him.

“That is a challenge,” Malkoske says.

As a small business owner, Malkoske

says that sometimes a move to change is made which doesn’t work out. The risks can be significant with respect to capital for small firm. “Because I am an independent business person, I am always looking for opportunities, but I do not always make the best business choices,” he says. “Sometimes the opportunities aren’t there, but I am willing to invest the resources to try and find them. So the challenge and struggle would be, as a result of that, I jump in and commit [quickly]. We’re not overly large and we’ve done that; jumped in and committed and then found out because we are small, we can’t provide the level of service that we might need. Or, I can’t find the people to join me to take on that extra challenge. So I have to be cautious about growth, yet it’s not my nature.”

Making friends QA Adjusting Company does have a strong working relationship with brokers — in part likely because Malkoske’s father was a broker — something which is a bit unusual for a small independent office. Further to that, the company truly emphasizes its Manitoba-based connection. “We are the local guys,” he says. “Not to say that my competitors aren’t, but they have commitments and interests that go further afield than mine do. I like Winnipeg and I like Manitoba, and I’m really interested in everything else, but it doesn’t matter much to the day-to-day operations of my business.”

What is essential to Malkoske’s business is being a member of the Canadian Independent Adjusters’ Association (CIAA). “We are not only members, we’re participating in committees and regional activities, so it gets your name known,” he says. Being a member of the CIAA allows the opportunity to be in touch with competitors, not only locally, but on a national basis and meet to discuss challenges affecting all independent adjusters. Together, the adjusters look for solutions to these common issues. “There are people that I have met through CIAA that if I have a challenge that I am not quite sure what the answer is to, or I simply need a sounding board for the position I am going to take, these are the people I can, and do, chat to.”

April/May 2010

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Damages Resulting from Fatalities Determining damages for loss of companions and a new method for calculating loss of income

BY LAURA KUPCIS

very year in Canada there are roughly 3,000 fatal accidents, and one-third of those happen in Ontario, Jamie Dunn, partner at Blouin, Dunn LLP told delegates at the OIAA 2010 Professional Development & Claims Conference. Most of the fatal accidents involve male drivers aged 35 to 44, Dunn added at the Torontobased conference on Feb. 3.

The legal basis for claims in fatal accidents is found in the Family Law Act, part 5, section 61 — Dependants’ Claim for Damages. However, Dunn notes this heading is a misnomer because the right of dependents to sue is not actually based on dependency.

There are specific classes of individuals who have a right to claim damages when someone is killed, but the courts seem to be opening up this concept of dependency, Dunn said. “It used to be under the old fatal accidents act that you had to be dependent on the deceased for support to enable you to recover damages,” Dunn said. “The courts are broadening that now.”

As it pertains to pecuniary losses, section 61 (1) of the Family Law Act — Part V states that if a person is killed by the fault or negligence of another, the spouse, children, grandchildren, parents, grandparents, brothers and sisters are entitled to recover. Again, the word pecuniary is a misnomer, Dunn says, citing a challenge by an insurer in 1980, which stated that the damages in a fatal accident are restricted to pecuniary damages, but the courts ruled that it was both pecuniary and non-pecuniary. Additionally, section 61 (2) — damages in the case of injury – was challenged by an insurer who said those damages are only for injury and not for fatal accidents, but the court of appeal said it was for both injury and fatality instances. Therefore, section 61 deals with both injury and fatal accident claims and dependants can recover both pecuniary and non-pecuniary

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damages, which includes an amount to compensate for the loss of guidance, care and companionship.

Pecuniary damages can be calculated specifically as there are invoices for incurred expenses. Non-pecuniary damages, on the other hand, have no invoices to show proof of financial loss.

Loss of care, guidance and companionship “It is impossible to quantify the loss of life in monetary terms,” Dunn said, reading from a Court of Appeal decision Hechavarria v. Reale. “No amount of money could ever replace the contribution that a loved one makes to the people around him or her. The loss of care, companionship, guidance, and the very important emotional bond, cannot be calculated in dollar terms.”

But the Court of Appeal went on to note that money is the only thing the courts are able to do, so they award money, Dunn added.

The courts have been pretty consistent in terms of dollars awarded for non-pecuniary damages, which makes it fairly easy for insurance companies and their lawyers to determine how much should be assessed in each individual case. While there is no cap in the amount of the award, the Court of Appeal has basically imposed a cap — a range beyond which they will not go, he said.

“Each case depends on its own factual situation, and that is what you’ll use in your negotiations with plaintiff’s counsel when trying to settle a claim,” Dunn said. “We all know that when someone dies they immediately become a saint. They could have been the biggest reprobate in the world, when all of a sudden they are dead and everybody says nice things about them.

The plaintiffs’ lawyers will, of course, come forward with all of the positive things about the deceased and your job is to develop as many true facts about

the deceased as you can.”

Dunn points out that insurance companies should discuss with defense counsel as to whether a jury notice to do the assessment of damages will be filed. As it relates to his own clients, Dunn’s recommendation is not to file a jury notice in a fatal case, but to perhaps look at a split jury notice: the jury is used for liability and the judge alone assesses damages in a fatal case. “The trial judge alone is constrained by previous decisions, so there is a fairly predictable range that you know the judge will be within,” he said. “A jury you can’t compel to award damages in this range and they will do whatever they want. It’s not as predictable.”

Average awards for loss of companion When it comes to damages for loss of care, guidance and companionship awarded by the Court of Appeal, the pre-deductible averages, in 2010 figures, are: • death of a husband: $65,000 — the highest award was in 2000 at $85,0000 which in 2010 figures would be around $100,000.

• death of a wife: $64,000 — the highest award was also $85,000 in 2000.

• death of a father: $40,000 — the highest award was $55,000 in 2003, which in 2010 figures would be roughly $62,000.

• death of a mother: $32,000 — the highest award was $35,000 ($40,000 in 2010) in 2001 • death of a child: $75,000 to $85,000 — the highest award was $100,000 (roughly $117,000 in 2010 figures) in 2001 — an award said to be at the very high end of the scale • death of a sibling: $25,000 • death of a grandparent: $10,000 • death of a grandchild: $10,000 Under Bill 198 for damages that assess under $50,000 in Family Law Act claim there is a $15,000 deductible. www.claimscanada.ca

Where the money’s at Pecuniary damages are where the real money is and trial lawyers are becoming more adept at coming up with accounting reports and heads of damages, Dunn said. In a situation where the breadwinner, or one of two breadwinners, is killed, the surviving partner or dependents have a right to claim for loss of income that they might reasonably have expected to receive if the person had not been killed. However, another concept has surfaced surrounding loss of income as it relates the survivors. In Fiddler v Chiavetti 92 O.R. (3d) 219, Debbie Fiddler claimed that after her daughter was killed in an accident she suffered a loss of income as she was unable to work. The jury awarded her $22,000 for past wage loss and $72,000 for future wage loss. The case is currently under reserve by the Court of Appeal. The defendants are seeking a new trial, or reduction of the award of damages, on the basis of inflammatory remarks by plaintiff’s counsel at trial. In this case, the court seems to say that it is not necessary for a plaintiff to be directly dependent on the deceased for

income. If the plaintiff sustains a loss of income, the person is entitled to recover, Dunn said.

Loss of income There are a number of different ways to cover loss of income. In a sole dependency situation, the dependant would be entitled to 70 per cent of the net income after taxes of the deceased — on the basis that the deceased would have used 30 per cent of their income on themselves.

In a modified sole dependency situation — where both parties are employed prior to the death — 60 per cent of the deceased’s net income after taxes is awarded to the surviving spouse. However, Dr. James Pesando, an economist at the University of Toronto, has put forward a newer method of calculating loss of income in a situation with two breadwinners. The co- or cross-dependency method uses the idea that one person can live cheaper than two. So when there is only one survivor, that person should have roughly 70 per cent of the net income of the two salaries combined. To calcu-

late the 70 per cent, the net income of both breadwinners is added together, and then the 70 per cent is determined from the total. From there, the net income of the survivor would be deducted.

“It’s complicated, but it works out to be about 15 per cent less than the modified sole dependency number,” Dunn said. This method has been accepted in one case and rejected by two trial judges in separate cases, he added.

“When you talk settlement to the plaintiff’s lawyer, you want to talk to negative contingencies,” Dunn said.

“That guy would have been disabled, he wouldn’t have worked to 65, look at his pre-accident medical history — he had a heart attack so he would have died before he did — unemployment, early retirement, remarriage — 50 per cent of marriages in Canada fail, so they would have been divorced anyway — they died before they got divorced, life expectancy. Those are the things you want to stress to the plaintiff’s lawyer … they bring the numbers down.”

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April/May 2010

Claims Canada

23

Back to the Future?: The New Auto Insurance Regulations

BY PHILIPPA SAMWORTH AND CARLIE SMITH

The reforms made as a result of the first Five Year Review of Automobile Insurance have now been released to the public and the proposed changes come into effect Sept. 1, 2010. The changes are aimed at keeping insurance premiums affordable for Ontario drivers by providing consumers with more choice and flexibility to purchase coverage that best meets their protection needs and budgets.

In many respects these new regulations hearken back to the halcyon days of the Ontario Motorist Protection Plan (OMPP). Most insurers and plaintiff’s counsel now look back on the early 1990’s as a time when accident benefits, while still litigious, were not as highly regulated as under Bill 164 and Bill 59. Many of us over the past 10 years have dreamt of a time when they could go “back to the future.” One of the biggest changes under this new regime is a return to allowing claims handlers to make adjusting decisions without being forced to seek a medical opinion first.

The new Statutory Accident Benefits Schedule (SABS) contain several significant substantive reductions in the type and amount of benefits available, with greater scope given to the availability of optional benefits. The tort law amendments include mandatory optional coverage under an “Added Coverage to Offset Tort Deductibles” endorsement, which would reportedly reduce the deductible to $20,000 ($10,000 for family members). To a certain extent, this serves to counterbalance the narrowing of the benefits available under the standard SABS.

Minor injury guideline In terms of substantive changes to the SABS, the preapproved framework guideline for grade I and II whiplash associated disorders is replaced by the minor injury guideline. For those diagnosed with a “minor injury,” medical and rehabilitation and assessment expenses are limited to $3,500, attendant care or an in-home assessment is not available regardless of optional coverage. The guideline has not yet 24

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been released, but “minor injury” is defined broadly as a “sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and any clinically associated sequelae” and each of these terms are in turn defined in section 2.The definitions seem designed to medicalize the policy and will likely lead to increased litigation. In addition, the definition of “minor injury” continues to ignore the issue of psychological injury arising from minor injury and whether a psychological injury takes an insured out of the minor injury guideline. It will be interesting to see whether the changes are any more effective in providing a serious hard cap with respect to minor injuries than the former PAF guidelines.

Caregiving, housekeeping and attendant care Caregiving and housekeeping benefits have become optional benefits for all insured’s with non-catastrophic injuries. These benefits continue to be available for the first 104 weeks to insured’s with catastrophic injuries and will be available beyond 104 weeks for the catastrophically injured who suffer a complete inability to carry on a normal life.

Attendant care benefits continue to be available for the first 104 weeks at a maximum of $3,000 per month for non-catastrophic insureds, but unless optional coverage is purchased, the limit on attendant care for non-catastrophic insureds is $36,000. Attendant care for catastrophic insureds is unchanged at a maximum of $6,000 per month up to $1,000,000.

A definition of “incurred” has been provided in section 2(7)(e), which requires that the insured person receive the goods or services to which the expense relates, have paid the expense or promised to pay the expense, and requires that the person who provided the goods or services did so in the course of his or her employment or sustained an economic loss as a result of providing the goods or services to the insured person. The definition is somewhat troubling and depending on the interpretation, we see the possibility of unjustly excluding certain claimants. For example, if we take the case of a mother who was not working prior to the accident and who is providing attendant care to her brain injured child we have difficulty seeing how those services www.claimscanada.ca

will be deemed incurred under this definition. The definition of incurred has relevance for caregiving and attendant care claims, as well as visitor’s expenses and medical and rehabilitation benefits.

Med-rehab benefits The types of medical and rehabilitation benefits available to insureds does not change under the new SABS, aside from rehabilitation benefits specifically excluding housekeeping and caregiving services — presumably in response to the situation created by the “Ms. G” case. However, unless increased benefits are purchased, the limits for medical and rehabilitation benefits have been reduced to $50,000 for non-catastrophic insureds and remain at $1,000,000 for catastrophic insureds. Perhaps more significantly, the limits for medical and rehabilitation benefits will include all fees and expenses paid for assessments and examinations requested by the insured. Claims for medical and rehabilitation benefits continue to be limited to 10 years, unless the insured is catastrophically injured or optional coverage is purchased.

Examinations The cost of examinations has been significantly limited and the new SABS limit the cost of each assessment to $2,000 for both insurer’s examinations and examinations requested by the insured. Rebuttal assessments are no

longer available and future care cost reports are not considered assessments under the SABS. Income replacement benefits will now be calculated at 70 per cent of gross income, with deductions also calculated on that basis. The cost of an accounting report up to a maximum of $2,500 is now also available to assist the insured with IRB calculations under certain circumstances. A definition has also been provided for “income continuation plan” to provide greater clarity as to what is deductible when looking at receipt of long term disability benefits. “Self-employed person” is also a defined term under the new SABS. An election of weekly benefits is final. However, a catastrophic insured is permitted to re-elect once catastrophic impairment has been determined. This presents some practical problems in various scenarios. If an insured is not catastrophic until the 104-week mark and has not purchased the caregiving option, that individual will be forced to elect IRB or non-earner benefits. In the event the insured is deemed catastrophic, it is unclear whether a re-election for caregiving benefits would apply retroactively or whether interest would be payable if the amount is higher than the previous election.

Questions are raised as to how this insured establishes incurred caregiving expenses for the period during which he or she was forced to elect IRB or non-earner benefits. These questions are compounded in a situation where an insured is not deemed catastrophic until the conclusion of litigation – which can take many years.

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The definition of “catastrophic impairment” has changed slightly and now includes permanent loss of use or single limb amputation. In addition, an assessment or examination for determination of catastrophic impairment can only be conducted by a physician, unless the only impairment is a brain impairment, in which case the assessment can be completed by a neuropsychologist. This removes occupational therapists, social workers and several other assessors from the process.

at least once every two months after the application is first made. The statement of benefits must include the amounts paid to date for medical, rehabilitation and attendant care benefits and the amount remaining available under the limits if the insured was entitled. In addition, the statement must include the amounts paid to date for all insurer’s examinations. For catastrophic claims, the statement of benefits is required when claims are paid and at least once per year.

In terms of the transition provisions, for all accidents, section 24 and Parts X, XI, XII, XIII and XV (governing proceInterest payments dure for claiming benefits, DACs, responsibility to obtain Interest is now payable on overdue payments at the treatment, interaction with other systems) of the SABS- 1996 reduced rate of one per cent per month, compounded do not apply after Aug. 31, 2010. All amounts payable under monthly. However, there has been no similar change to s. the new Regulations after Aug. 31, 2010 will be paid in the 282(10) of the Insurance Act which continues to allow an amount of the old regulations, except with respect to section arbitrator to award up to 50 per cent of the amount together 24, which is replaced by the new regulation section 25 govwith interest at two per cent per month, compounded erning the cost of examinations. Otherwise, the correspondmonthly. ing provisions of the new regulations will become effective as In terms of procedural changes, claims for medical and of Aug. 31, 2010. After Sept. 1, 2010, insureds will be deemed rehabilitation benefits are merged with the to have purchased the optional caregiver, application for assessments into one housekeeping, medical/rehabilitation and process. A treatment or assessment plan attendant care benefits under section 28 of signed by the insured and health practitionthe new regulations until the earlier of the er is required before the good or service is first expiry date of the motor vehicle liabilincurred, except where the insurer agrees it ity policy or the day on which the motor is not required or where the expense is for vehicle liability policy is terminated.

Interest is now prescribed medication or less than $250. If Changes have also been made to regulathe insured has sustained a “minor injury” tions governing disputes between insurers. payable on overdue under the guideline the insurer may refuse An application has now been defined as an payments at the any treatment or assessment plan during OCF-1. An insurer must supply an applireduced rate of the period the guideline applies. This decication to any insured who notifies the sion is final and not subject to review. The insurer he or she wishes to apply for beneone per cent insurer has 10 business days to respond to a fits and cannot take any step to prevent the per month, treatment or assessment plan with a deterapplicant from submitting that application. compounded mination. Failure to provide a determinaThe focus appears to be on combating tion of the applicability of the minor injury insurers deflecting claims where priority monthly. guideline or denial of the benefit means the issues arise. However, the chosen language insurer cannot rely on the minor injury guideline and must seems to preclude informal discussions with insureds with pay for the proposed treatment or assessment up to the date respect to identifying the appropriate insurer for accident the insurer gives proper notice. benefits and seems to force an insurer with absolutely no conHowever, insurer’s examinations are no longer required nection with the insured to accept and process an application in order to make a determination — whether it is with if it is received first. In addition, if a priority dispute is respect to a treatment plan, the applicability of the minor resolved on agreement as between insurers, an insured can injury guideline, entitlement income replacement benefits or dispute that agreement by way of private arbitration. There catastrophic impairment. The insurer has the discretion are also specific regulations dealing with claims to the Fund, whether to request the insured submit to an in-person or more detailed rules to expedite the arbitration process and all paper review insurer’s examination to assess entitlement to a private arbitration decisions must be made public. benefit. However, the insurer must now set out the medical There are certainly many more changes we have not canand other reasons for the determination. Where there is no vassed and overall there are significant implications for insurer’s examination the reasons for the determination will claims. So strap on your seatbelts and climb into your newly become more important. Nevertheless, what exactly is “pimped” time-travelling DeLorean and starting Sept. 1, required in terms of “medical reasons” is somewhat unclear. 2010 take that wild ride “back to the future.”

If an insured has unreasonably refused to attend an insurer’s examination, the insured cannot mediate.

Carlie Smith is an associate at Dutton Brock LLP and pracDue to the reduced limits for medical, rehabilitation and tices a variety of insurance defence work. attendant care benefits for non-catastrophic claims, the Philippa G. Samworth is a partner at Dutton Brock LLP insurer must also send the insured a statement of benefits and her area of practice is exclusively insurance defence with a paid to date whenever these benefits are claimed or paid and specialty in Accident Benefits.

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Blind to Fraud: The OPC’s Guidelines on Covert Surveillance Unduly Inhibit Private Investigators

BY NORMAN GROOT

The Canadian Association of Private Investigators (CAPI) recently made submissions to the Office of the Privacy Commissioner of Canada (OPC) regarding its Guidelines on Covert Surveillance in the Private Sector. CAPI and its members assert the implementation of the Guidelines’ tone and content will serve only to encumber the private investigation of fraud. More specifically, the Guidelines fail to account for the serious nature of insurance fraud and fall short of striking an appropriate balance between privacy interests on the one hand, and the public’s interest in security, crime prevention, and law enforcement on the other.

Costs of insurance and employment fraud Insurance fraud is estimated to cost the property and casualty insurance industry $1.3 billion annually. The costs of employment-related fraud have never been quantified, but they are known to be significant. CAPI’s submissions to the OPC posit there will be further cost implications as a result of the publication of the OPC’s Guidelines in their current form. For example, the OPC’s suggestion that surveillance should be used only as a “last resort,” would arguably make private investigations less effective. Furthermore, the Guidelines’ onerous provisions, such as the pixilation of third party images, would ultimately increase the costs of providing goods 28

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and services, as compliance with the Guidelines would result in higher fraud insurance premiums throughout the marketplace.

Privacy law in perspective It is the view of CAPI that there is no immediate need for the OPC’s Guidelines. Internationally, Canada’s privacy regime is recognized to be one of the most comprehensive systems in the world. The Personal Information Protection and Electronic Documents Act1 (PIPEDA) has been lauded for achieving a reasonable balance between privacy protection and the efficient management and use of information in a commercial environment.

The Guidelines, however, are inconsistent with PIPEDA2 and are out of step with Industry Canada’s acknowledgement of the private sector’s role in the prosecution of fraudulent conduct.3 This recognition is echoed in Correia v.

Canac Kitchens, an employment fraud case, where the Court acknowledged that “. . . many functions that were once the exclusive domain of public police forces are now being performed by private agencies.”4

One of the most effective tools in a private investigators arsenal is covert surveillance. Further, covert surveillance can be conducted with minimal impact on legitimate expectations of personal privacy. The OPC should recognize that organizations, such as insurers and employers, generally do not want to conduct surveillance, as it adds to the cost of claims adjudication and workplace management, and have no interest in collecting sensitive information extraneous to the purpose of the investigation. Rather, the joint objective of a private investigator and his or her principal is to obtain information that would assist in determining if a fraud, breach of contract, or other contravention of the law has taken place. Canadian legal commentator Elaine Geddes states that “[a]n investigation which is discreet and unobtrusive will not be an invasion of privacy . . . Surveillance alone is not actionable; there must be other elements to find an invasion of privacy.”5

Covert surveillance in practice Covert surveillance is widely considered a common investigative meawww.claimscanada.ca

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sure, not a measure of last resort. The Ontario courts have stated that “[t]he purpose of such surveillance is either verification or contradiction. A trial is a search for the truth and surveillance is a tool used in pursuit thereof.”6 Moreover, CAPI asserts overt investigation tools such as medical examinations and interviews with neighbours are far more invasive of privacy rights than covert surveillance. In addition, the courts often prefer the objective evidence generated by surveillance, such as video and audio recordings, rather than, for example, medical evidence based predominantly on the subjective complaints of the individual under investigation to his or her doctor.

The Guidelines challenge the ability of businesses to determine the scope and methodology of their investigations. CAPI holds that insurers and employers should be permitted to exercise their discretion in selecting investigative options, including covert surveillance. The proper standard should be reasonableness under the circumstances, which would be consistent with s. 5(3) of PIPEDA.7 CAPI acknowledges that because of the disparity of power between an employer and employee, precautions should be implemented before the employer clandestinely observes its employee. To this end, CAPI recommends the OPC draft separate Guidelines addressing covert surveillance in public places in the employment context and in circumstances where insurers or organizations are investigating non-employment matters.

The relationship of trust that exists in the employer-employee context is absent and inapplicable in the insurance context. The trust element is also not a factor in disputes between businesses, such as disputes concerning intellectual property fraud.

The degree of impairment to privacy rights that may result from covert surveillance should be balanced against the nature of the matter being investigated, and the reasonable expectation of privacy in the place of investigation. In the more serious case of fraud, there should be less expectation 30

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of privacy in public places. Further, fraud investigations are necessarily focused and time-limited and, accordingly, the opportunity to gather information does not permit for resorting to other forms of investigation first.

Covert surveillance in the courts Challenges are being made to contest the OPC’s jurisdiction to regulate covert surveillance in the private sector. State Farm Insurance has made an application to the Federal Court to

Further, fraud investigations are necessarily focused and time-limited and, accordingly, the opportunity to gather information does not permit for resorting to other forms of investigation first. seek clarity on the scope of the OPC’s mandate. Following an automobile collision involving one of its insured, State Farm commissioned private investigators to conduct surveillance against a party to the accident, who claimed to have suffered injury. This individual sought to obtain the tapes and surveillance reports resulting from the investigation, a disclosure request that State Farm patently refused. Subsequently, the party, adverse in interest to State Farm, lodged a complaint with the OPC. CAPI and its members eagerly await the Federal Court’s decision on

this matter, as it holds potential implications for the role of the OPC in the private investigation industry.

Norman Groot is counsel to the Canadian Association of Special Investigation Units, the Canadian Independent Adjusters’ Association and the Canadian Association of Private Investigators on privacy and investigation matters.

Note: This article is in response to an article which ran in Claims Canada’s December/January 2010 issue entitled: Exemption to Privacy Legislation Unlikely.

Groot’s view is that the OPC’s Guidelines are a consideration, but not a determining factor, as to whether surveillance should be used as an investigation tool where there is evidence of fraud. Surveillance is not an investigation tool of last resort, as the OPC would suggest. The OPC has responded to the challenge to litigate this issue.

1. Personal Information Protection and Electronic Documents Act, S.C. 2000, c.5.

2 Section 7(1) of PIPEDA states in part that: “ . . . an organization may collect personal information without the knowledge or consent of the individual only if . . . (b) it is reasonable to expect that the collection with the knowledge or consent of the individual would compromise the availability or the accuracy of the information and the collection is reasonable for the purposes related to investigating a breach of an agreement or a contravention of the laws of Canada or a province . . .”

Furthermore, with respect to the disclosure of personal information, s.7(3) states that: “. . . an organization may disclose personal information without the knowledge or consent of the individual only if the disclosure is . . .(d) made on the initiative of the organization to an investigative body . . .”

3 This was addressed in its recommendations for the amendment of the Regulations Amending the Regulations Specifying Investigative Bodies, P.C. 2008-933, May 15, 2008, s.1(a).

4 Correia v. Canac Kitchens, 2008 ONCA 506 (CanLII) at para. 44.

5 E.F. Geddes, “The Private Investigator and the Right to Privacy” (1989) 17 Alta. L. Rev. 256 at 299.

6 Murray v. Woodstock General Hospital Trust (1988), 64 O.R. (2d) 458 at 463 (H.C.J.).

7 Section 5(3) states that: “An organization may collect, use or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances.” www.claimscanada.ca

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Success

Preparing the Adjuster’s File for Litigation — Part II: Maximizing the Value of the Adjuster’s File When Retaining Coverage Counsel

BY DON MCGARVEY

In the October/ November 2009 issue of Claims Canada, I provided my opinions and recommendations pertaining to how an adjuster’s file can be properly prepared and provided to defence counsel in order to allow counsel to effectively and efficiently commence work on a new matter and minimize costs. Response to that article has spawned this follow-up article on how to prepare an adjuster’s file when retaining and instructing coverage counsel.

As a matter of first principles, before any material are sent to counsel on a new retainer, counsel should be contacted with the name of the insured and all other potential insureds, as well as the parties in the underlying action.

This will allow for a conflicts search to be conducted before time is spent on a matter upon which there may be a conflict. Once conflicts are cleared, there are certain fundamentals that should be followed by an insurer when preparing to retain and instruct coverage counsel.

Firstly, coverage counsel will, of course, require a complete copy of the policy or policies in play. While this may seem evident, more often than not I receive less than a full copy of the policy. It is best to provide counsel with the declarations page, a full copy of the policy including the coverage 32

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section that may be at issue and copies of all endorsements. Frequently, coverage can turn on an endorsement attached to the policy and if full and complete endorsements are not supplied in the first instance, unnecessary time and expense can be incurred.

When supplying the full copy of the policy, there may be an issue as to what policy period applies. To that end, insurers must be live to the issue and supply the copies of policies for two or three different policy years if it is unknown which policy or policy year may apply.

Along the same lines, an insured may learn of a potential claim — the definition of which can vary from policy to policy — and have given a Notice of Circumstances in cases where a claim — as defined by the policy — may not have arisen but which is expected to arise in the future. It is necessary for counsel to have those notices when determining the applicable policy year which govern coverage.

Further, any notices or other documentation which give rise to the claim, are also required. Most often the claim arises through pleadings issued against the insured which alleges that the insured is “legally obligated to pay compensatory damages.” While there is something of a live issues as to whether all pleadings ought to be provided to coverage counsel, it should be remembered that the insuring agree-

ment typically covers those allegations against the insured which relate to the insured’s legal obligation to pay compensatory damages. Therefore, statements of defence, cross-claims or counterclaims are not necessarily helpful in the coverage analysis, despite the fact that some courts have considered them in determining the duty to defend. Perhaps the better view is to provide all available pleadings to counsel and allow counsel to determine those which are relevant, which often includes only the Statement of Claim or initiating document for reasons articulated above.

In determining the duty to defend, it is well established that the pleadings govern the duty to defend and the widest latitude is to be given to the allegations in the pleadings to determine whether they raise a claim within the policy. The mere possibility that a claim falls within coverage suffices.

However, in the Supreme Court of Canada decision in Non-Marine Underwriters, Lloyd’s of London v.

Sclarea, the Supreme Court indicated that in certain circumstances, a broader approach to the interpretation of the analysis must be taken. When examining the true substance of the pleadings, the court must determine whether the allegations as pleaded can be supported by the factual allegations and thereupon, decide if the harm caused by any alleged negligence is www.claimscanada.ca

really caused by, for example, intentional or otherwise excluded conduct.

For this reason, it is often wise to provide coverage counsel not only the pleadings (and likely only the Statement of Claim will be necessary) but also the factual background to the case. Counsel will need to determine whether any of the claims as pleaded are derivative in nature, such as allegations of negligence, which actually amount to harm caused by intentional acts or otherwise excluded conduct.

The same can be said for the underlying facts exception to the pleadings rule which states that a claim may be covered even if it is not correctly pleaded. To this extent, statements of the critical witnesses ought to be gathered by the insurer and provided with the original letter of instruction, pleadings, a full copy of the policy or policies, and the factual outline of the claim and any extraneous matters.

The Supreme Court in Monenco Ltd. v. Commonwealth Insurance Co. considered the underlying facts exception and indicated that extrinsic evidence could be used to determine the duty to defend in some cases. That extrinsic evidence should be supplied to counsel, but the underlying facts exclusion applies only to extrinsic evidence in relation to documents referred to in the pleadings.

Other insurance policies that may cover the insured also need to be gathered and provided to counsel to the extent that there needs to be an allocation of defence costs and possibly, indemnity, where two policies apply to the same claim.

Similarly, where excess insurance may be in play, excess insurers will certainly want to receive not only the pleadings in the underlying action, but also the primary and other excess policies that are below it in the insurance program or tower of the insured. The coverage positions of those insurers who are primary or underlying the excess carrier in questions will also need to be obtained, whether the excess policies follow form to the primary or not.

In summary, an insurer needs to be mindful of the way in which a coverage www.claimscanada.ca

analysis is conducted and provide clear instructions along with the following: • The pleadings, and especially the Statement of Claim, along with the relevant and possibly relevant policies, in full; • Any Notices of Circumstances that

The coverage positions of those insurers who are primary or underlying the excess carrier in questions will also need to be obtained, whether the excess policies follow form to the primary or not.

proper analysis of coverage, whether on the basis of strictly the pleadings rule, the substance of the pleadings or the underlying facts exception; • Copies of other policies that may potentially be triggered in order that such things as a potential allocation of defence costs can be considered; • In an excess primary limits situation, an excess carrier will also want to receive the primary policy including all endorsements, the coverage position of the underlying primary carrier and the coverage positions of those insurers that are below it in the excess tower.

With this information, the coverage analysis can proceed more promptly and more precisely, thereby saving counsel time and saving the insurer money.

have been issued by the insured; • Witness statements and perhaps copies of the documents referred to in the pleadings should also be provided to allow counsel to conduct a

Don McGarvey is a partner with McLennan Ross LLP practicing insurance and commercial litigation. McLennan Ross LLP is an independent member firm with the ARC Group Canada.

April/May 2010

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CASIU

Part I:

The Thin Red Line of

FRAUD FIGHTERS The CASIU Story

BY THE BOARD OF DIRECTORS OF CASIU

The Canadian Association of Special Investigation Units is a low profile organization that fights the good fight against insurance fraud. Staffed from the claims side of the P&C industry by volunteers, it works minor miracles on a thin budget. It is the core of a loose-knit fraud fighting network, and it needs encouragement and support from the big anti-fraud players in terms of encouraging some of their claims and investigative staff to join CASIU and pay the modest membership fee.

In the beginning The Canadian Association of Special Investigation Units – Trillium Chapter (CASIU) developed as a result of wishing to bring a Canadian identity to the battle against insurance fraud. CASIU became an organization of volunteers from the claims area of the propertycasualty insurance industry who cooperated in the fight against fraud.

Although it was acknowledged that 34

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April/May 2010

insurance fraud had no borders, there was a clear need to concentrate on Canadian issues and develop made-inCanada solutions. For example, the growing involvement of organized crime in Ontario insurance claims dictated an organized local response to the problem among SIU and claims people.

Hence CASIU was born, circa 1998, with the mandate to educate and bring together Canadian personnel involved in the insurance fraud battle.

The first initiative was to educate insurance claims personnel and their partners, such as independent adjusters, on the issues of insurance fraud. The initial meetings were arranged for this purpose, dealing with the hot topic of the day. Since the meetings were held as an open forum, there was the added benefit of allowing the attendees to network, establishing new relationships and bringing new partners into the battle. www.claimscanada.ca

It became apparent rather quickly that more in-depth education was required if CASIU was to meet another mandate — namely to promote a greater understanding of the ongoing evolution of insurance fraud. More and more, members were seeing a growing number of professional criminals involved with insurance claims.

CASIU rose to the occasion, and along with the regular scheduled meetings in the early years, began to hold topic specific seminars at various times through out the year. These events dealt with all aspects of fraudulent insurance claims, bringing in guest speakers ranging from police officers/officials, solicitors, vendors, investigative specialists and others, all of whom brought specific anti-fraud skills to the speaker’s podium. Our biggest event became the Annual Toronto Fraud Forum, a joint one-day insurance fraud conference now in its tenth year, co-hosted by our conference partner, the Toronto Chapter of the Association of Certified Fraud Examiners (ACFE).

The seminars proved to be extremely successful. Feedback from the attendees was very positive, especially in terms of being informative and helpful in the actual day-to-day handling of suspicious claims.

In addition to these seminars, CASIU members have participated in various success stories through out the years. They have been asked to assist in investigations being conducted by local police departments, as well as other law enforcement agencies. For example, CASIU has been instrumental in coordinating efforts to secure equipment (such as automobiles) for local police “stings.”

CASIU members have also been requested to speak at numerous industry-related functions, often as head table participants, or key note speakers.

In fact the networking aspect of CASIU has been recognized by many outside agencies, who continuously reach out”to us for assistance.

While CASIU is proud of its accomplishments to date, it has also experi-

enced growth pains and has had to deal with these challenges from time to time. For example, currently CASIU has members from many regions of Canada, but only one chapter — the Trillium Chapter — to deal with the entire country. The necessity of having local chapters has not escaped the Board of Directors, and this will be an area of focus.

In conclusion, the greatest challenge at present is the expansion of organized crime in claims fraud, especially in Ontario. CASIU understands that there is an even greater need for training and cooperation to fight these professional criminals. It is a question of numbers.

The more individuals and companies combating insurance fraud, the greater the level of success.

As in the beginning of our history, CASIU will be there to educate and assist in the future.

Part II: Cooperation Equals Success will be featured in the August/September issue of Claims Canada.

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Anatomy 101: Common Motor Vehicle Accident Injuries

BY JUDY FARRIMOND AND ANGELA VERI

As insurance professionals, when we manage motor vehicle injury (MVA) claims we conduct a range of activities like interviewing clients, reviewing medical documentation, and liaising with a range of healthcare professionals. As a result, we gain a lot of medical rehabilitation knowledge — knowledge that is invaluable in the rehabilitation planning process. The more we know about the parts of the body that are most commonly injured in MVAs, the greater our insight into how to most effectively manage file progress, as well as empathize with our clients.

The big three: brain, spine and shoulder To allow us to do all that we need and want to do, we require our brain to interact with all of our various body parts. Especially important in terms of mobility are our spine and shoulders — precisely the areas that are most commonly damaged due to a collision. Enhancing our anatomy knowledge and, in turn, our injury knowledge, should lead to maximum MVA outcomes for your clients.

Acquired brain injury Each part of the brain is responsible for facilitating different types of behaviours. If your MVA client has been diagnosed with an acquired brain injury (ABI) or you suspect an ABI, knowing the location of the lesion, as well as observing the MVA client’s day-to-day activities provides invaluable insight into the nature of the injuries. For instance, the frontal lobe, which is the area right behind the forehead, is responsible for all planned voluntary behaviour including: • determines our consciousness so that we know what we are doing • determines personality • initiates activity in response to our environment • establishes our memory of habits and motor activities • controls our emotional response, creates judgments and controls inhibition • controls language, creates word associations, and assigns meaning to words Consequently, an MVA client who has damage to the frontal lobe may experience any or all of the following: • inability to focus on tasks and/or plan and sequence the movements to conduct tasks that involve multiple steps • changes in social behaviour such as loss of spontaneity 36

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while interacting with others and inappropriate sexual behavior • persistent focus on a single thought • personality and mood changes • difficulty with problem solving including loss of flexible thinking • inability to express language By contrast, the parietal lobe, which is near the back and top of the head, is responsible for perceiving, analyzing and assembling touch information from the body. Overall, this lobe integrates our various senses to understand concepts and make sense of the world. With damage to the parietal lobe, your MVA client may not have difficulty with focusing, problem solving or social behaviour, as may be the case with damage to the frontal lobe, however, your client may experience: • inability to attend to more than one object at a time and/or name an object • difficulty locating the right words for writing • problems trying to read or do mathematics • difficulty drawing objects and/or distinguishing left from right • lack of awareness of certain body parts and/or surrounding space resulting in problems with self-care • inability to focus visual attention and problems with eye/hand coordination Another important part of the brain is the optical lobe — responsible for vision. Difficulty locating objects and/or seeing objects accurately, as well as other vision defects can result when the optical lobe is injured. For instance, postMVA your client may not be able to recognize words or how objects move or be able to identify colours, reading and writing.

With the Optical Lobe responsible for vision, the temporal lobe is responsible for hearing and memory, as well as some visual perceptions, categorizing objects and controlling what is expressed. It is located at the side of the head above the ears. Problems with hearing, difficulties with some memory, visual perceptions, categorizing objects and speech, including expression and understanding language and reading and writing may be observed in a client who has damage to the temporal lobe. Agitation, irritability and childish behaviour may also result.

Poor balance, dizziness, and tremors are commonly observed due to injury to another area of the brain, the cerebellum. Located at the base of the skull, the cerebellum is responsible for coordination and voluntary movement, balwww.claimscanada.ca

ance and equilibrium, and some memory of reflex motor skills. Accordingly, common issues post-MVA also include slurred speech and the inability to walk, make fine and/or rapid movements or reach out and seize objects.

Connecting the brain to the spinal cord is the brain Stem, which is responsible for a range of functions – everything from breathing, heart rate and swallowing to sweating, blood pressure, digestion and temperature control to reflexes when seeing and hearing. The Brain Stem also determines our level of alertness, ability to sleep, and sense of balance. With this range of functions, damage to the Brain Stem can result in a range of issues: • difficulty breathing • abnormal changes in heart rate and blood pressure • difficulty swallowing food and water • problems with organizing/perception of environment • dizziness and nausea • problems with sleeping and decreased alertness

Spinal cord injury The spinal cord and its nerve pathways carry information from the brain to all areas of our bodies. It is made up of three regions, each with distinct responsibilities: • Cervical spine: extends from the base of the skull to shoulder level and made up of seven cervical bones or vertebrae.

Its main responsibility is for flexion, extension, bending and turning of the head and it contains the cervical nerves that supply movement and feeling to the arms, neck, upper trunk and diaphragm.

• Thoracic spine: attaches to the ribs in the chest region and made up of twelve vertebrae. The spinal canal in this region is smaller than the cervical or lumbar areas, making it more at risk if there is a fracture. Its main responsibility is rotation and it contains the thoracic nerves that supply movement and feeling to the trunk and abdomen.

• Lumbosacral spine: extends from the waistline down the lower back to the base of the spine. Its main responsibility is bending forward and backward as well as side-to-side and it contains the lumbar and sacral nerves that supply movement and feeling to the legs, bladder, bowel and sexual organs.

With each region of the spine responsible for different functions, the type of spinal cord injury (SCI) depends on which region is injured and the severity of the injury: • Complete SCI is damage to the spinal cord that results in complete and usually permanent loss of function below the level of the injury.

• Incomplete SCI is damage to the spinal cord that is partial; some motor and sensory functions remain so there may be some feeling but little movement, or some movement and little feeling. The effect on functioning depends on the area of the cord injured. The degree of loss varies because the amount of damage differs from person to person.

• Paralysis due to SCI is the inability to move or feel because of injury or disease to the spinal cord. Degree of paralysis depends on where the spinal cord is injured and the severity of the injury (e.g., partial or total paralysis of the arms www.claimscanada.ca

and legs). For instance, paraplegia is impairment or loss of movement or feeling in the thoracic, lumbar or sacral (but not cervical) segments of the spinal cord, whereas tetraplegia is paralysis of the four limbs due to cervical (neck) injuries and hemiplegia, also known as Brown-Sequard Syndrome, is paralysis to a side of the body. It is usually caused by injury to the spine in the region of the neck or back. For instance, hemiplegia may be the result of acquired brain injury or stroke if one side of the spinal cord is damaged but not completely severed.

Common shoulder injuries Unlike most other joints in the body that only need to flex and extend, the shoulder needs to move in multiple directions. While this adds mobility, it makes the shoulder less stable — what the shoulder joint gives up in stability, it provides in facilitating mobility. The inherently unstable nature of the shoulder makes it an obvious candidate as one of the most common types of MVA injuries.

Technically, the shoulder joint is where the upper arm bone — called the humerus — attaches to the shoulder blade — called the scapula — and the collar bone — called the clavicle. The shoulder refers to the group of structures in the region of the joint including muscles, tendons, ligaments and cartilage. If your MVA client reports the following symptoms, a shoulder injury may be present: • poor posture and sharp pain with movement greater than 90 degrees; may be due to impingement syndrome, which occurs when the soft tissue becomes trapped, causing the loss of the mechanism’s gliding action.

• limited range of motion sometimes accompanied by pain and sometimes without pain; may be due to a rotator cuff tear, which occurs when the muscles partially and/or completely tear because of trauma or, over time, the muscles can degenerate.

• General pain, tender to the touch and only limited, painful movement; may be due to tendonitis, which occurs when the tendons attached to the shoulder become inflamed because of trauma or repetitive muscle strain.

• Immediate, severe pain that can extend down the arm (mimicking a WAD III injury) with the inability to move the arm and the shoulder visibly displaced; may be due to shoulder dislocation, which occurs when the upper arm bone pops out of the cup-shaped socket that is part of the shoulder blade caused by trauma to the shoulder joint.

Common injuries, not so common knowledge It’s one thing to know that the brain, spine and shoulders are likely targets for injury in MVAs, it’s another thing — and very beneficial — to know how these body parts function and consequences when they are not functioning optimally. Enhanced empathy, communication, and efficiency are just some of the many ways anatomy knowledge helps improve file management.

Judy Farrimond is supervisor of complex and catastrophic services and Angela Veri is national director of customer relations at Sibley and Associates.

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McGrimmon v.

Personal: Anomaly or Harbinger?

BY MICHAEL TEITELBAUM

Justice McKinnon of the Ontario Superior Court recently found in McGrimmon v. Personal Insurance, 2010 ONSC 108, that a homeowner’s insurer owed a duty to defend to the defendant owners/vendors of the insured property in respect of allegations of misrepresentation, non-disclosure and negligence relating to alleged defects and deficiencies in the property. This decision has potentially far-reaching implications because it suggests that depending on the wording of a policy and what is alleged, an insurer may be obliged to defend insureds who have made misrepresentations with respect to the sale of not only realty but, for example, any other item that an insured might sell. We query whether a liability policy is intended to provide such extensive protection.

The plaintiffs sued McGrimmon and Sholea and others with respect to the construction and sale of a new home to the plaintiffs. The Personal Insurance Company issued a homeowner’s liability policy to McGrimmon and Sholea (the insureds), which covered them during the time they occupied the property.

The insureds entered into an Agreement of Purchase and Sale with the plaintiffs. When the plaintiffs took possession of the property, they allegedly discovered numerous defects 38

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and deficiencies with the house and property. The allegations against all of the defendants included faulty design and poor construction, negligent inspection, poor supervision of the design, inadequate repair, negligent regulation, misrepresentations, failure to disclose the condition of the property, breach of a contractual duty of care and other duties. The specific allegations against the insureds were with respect to misrepresentations, nondisclosure and negligence.

The third party liability coverage in Personal’s homeowner’s policy stated the insurance “applies to your legal liability for injury to others or damage to their property arising out of your premises or your personal actions.” It appears the coverage grant also provided that the insurance “applies only to accidents or occurrences which take place during the term of this policy,” and that payment would be made for “all sums which you become legally liable to pay as compensatory damages because of bodily injury or property damage.”

The coverage also extended to claims arising from “personal liability” — being “legal liability for unintentional bodily injury or property damage arising out of your personal actions anywhere in the world.” But, there was no insurance for claims “made against you arising from damage to property you own, use, occupy or lease, and for “premises liability,”

— being “legal liability for unintentional bodily injury or property damage arising out of your ownership, use, or occupancy of the premises.” Again, there was no insurance for “claims made against you arising from damage to property you own, use, occupy or lease.”

It was argued by the insurer the claim was, in its “pith and substance,” a claim for breach of contract and breach of warranty and that the “nature of homeowner’s liability insurance is to cover accidental or unforeseen losses only,” and that liability insurance does not cover losses which are neither fortuitous nor contingent.

While the court acknowledged these arguments, it appears the decision on this point turned on whether or not a breach of contract is covered by a homeowner’s policy. After reviewing the authorities referenced by both parties, McKinnon expressed the view, at para. 42 of his reasons, that a “liberal interpretation of the wording employed in the Personal policy is preferable to effectively ‘reading in’ an exclusion that is not identified. If Personal wished to exclude liability to third parties for breach of contract it would have been simple to include the exclusion in the contract of insurance.

They did not. The broad wording of the coverage would allow a defence to an action for breach of contract.” His Honour concluded that the “assumed www.claimscanada.ca

exclusion” refers only to intentional tort and not to breach of contract, particularly given that it has “become the fashion to plead both tort and breach of contract in actions that are essentially actions for unintentional tort.”

McKinnon goes on to find that even if he is incorrect in this view, the pith and substance of the claim “sounds in negligence including negligence in general, negligent misrepresentation, negligent construction and negligent design,” which are insured.

The other principal argument addressed by the court was whether the loss was excluded because it arose from “damage to property you own, use or occupy,” and if the time period during which to consider this was when the alleged representations were made by the insureds at the time of the Agreement of Purchase and Sale when they owned the property.

McKinnon held that because the exclusionary words were not cast in the past tense, they did not apply. He

noted that exclusionary words “must be given their literal meaning and where any ambiguity might arise, interpreted in favour of the insured”.

He continued: The insurance contract covers third party liability. It is very broad and portable. It covers occurrences anywhere in the world. It is obvious that claims upon a policy will invariably be brought after an “occurrence” . . . If the occurrence took place within the applicable policy period of the contract of insurance, a duty to defend arises, even though the policy is no longer in force.

The duty to defend is subject to express exclusions. In this case there is no express exclusion for property that was “owned, used or occupied or sold.” As stated, had the past tense been employed in the exclusionary words, the defendants would be denied coverage.

McKinnon concludes his reasons with the following observation: Fundamental to a determination of whether the duty to defend arises is the fact that

contracts with insurance companies are not subject to negotiation. The wording of the policies is written in stone. The buyer must “take it or leave it”. The buyer is looking for peace of mind when purchasing insurance. Peace of mind should only be disturbed in the face of clear, unambiguous wording.

In the instant case, the third party liability coverage is broad and portable and I find the claim gives rise to the duty to defend. In essence, the action is one of negligence. The negligence is not subsumed by the assertion of a breach of contract. It is disparate, based on a fair reading of the claim. In the result, even if I am wrong that a claim for breach of contract is not insured, there is no doubt that the claim for negligence is insured.

Comment This decision and McKinnon’s reasons raise a number of issues and concerns as follows: 1) Was there, in fact, an “occurrence” in this instance? Were the allega-

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tions against the defendant insureds ones that could be considered to be fortuitous, i.e., either an “unforeseen mishap” or an “untoward event,” which are commonly considered to be what an accident or occurrence entails?

The allegations are not set out in detail and, accordingly, it may be possible there were specific allegations relating to, for example, negligent construction, that, taken with other pleas in their entirety, might be viewed as constituting an “occurrence.”

Moreover, it could be argued that the manner in which the policy was worded does not seem to emphasize the need for there to be an occurrence and, therefore, this may have appropriately impacted on how the court interpreted the policy in terms of whether or not a fortuitous event was required.

In the final analysis, as the Ontario Court of Appeal has stated in Bridgewood v. Lombard, [2006] O.J. No. 1288 (C.A.) the wording of the policy prevails over legal maxims.

Moreover, allegations of negligent misrepresentation will attract a duty to defend as found in Westridge Construction v. Zurich, [2005] S.J. No. 396 (C.A.).

2) That said, it appears no consideration was given as to whether there was “property damage.” The decision does not state how “property damage” is defined in the subject policy. A common definition is “physical injury to tangible property, including all resulting loss of use of that property; or loss of use of tangible property that is not physically injured.”

We do not know the particulars of the damages claimed in this instance, but it appears appropriate to ask whether given what is known, the plaintiffs sustained any property damage — for example, were there allegations of loss of use of tangible property — that would attract coverage under the policy in question.

3) In the case law that is reviewed about whether or not a breach of

40

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contract claim is covered under a liability policy, no mention is made of Acklands v. Canadian Indemnity, [1985] M.J. No. 506, a Manitoba Court of Appeal decision which found that a contractual claim for wrongful dismissal was not covered

It could be argued that the manner in which the policy was worded does not seem to emphasize the need for there to be an occurrence and, therefore, this may have appropriately impacted on how the court interpreted the policy in terms of whether or not a fortuitous event was required. under a liability policy. However, that said, given the various allegations relating to negligence in the case at hand, it appears the issue of whether or not a breach of contract is covered under a liability policy

was subsumed within these allegations of negligence.

4) While the case law suggests if there are one or more covered allegations, then the entire action must be defended, the Ontario Court of Appeal’s recent decision in Hanis v.

Teevan, [2008] O.J. No. 3909 indicates it may be possible in the appropriate case for an insurer to recoup its defence costs for uncovered allegations. There is no indication this was addressed here.

5) As McKinnon acknowledges, his determination that the “own, use, occupy or lease” exclusion does not apply because it is in the present tense disagrees with a finding by Justice Henderson on the same wording in Brant Mutual Insurance v. Sinden, [2002] O.J. No. 5956. If the pertinent time to determine when this exclusion applies is when the representations were made and/or the sale occurred, and not when the allegations are made, which seems logical, is Henderson’s interpretation the more appropriate one?

6) McKinnon’s observation that insureds are looking for “peace of mind” when purchasing insurance is a propos when addressing first party coverage, as has been noted by the Supreme Court of Canada in Fidler v. Sun Life Assurance, [2006] S.C.J. No. 30. The same view has not, however, been expressed with respect to third party liability coverage, at least to date. It will be interesting to see whether, if this decision is not appealed, it will become an anomaly or a harbinger for attempts at expanding coverage available under liability policies — particularly homeowner’s policies. Will this decision open the floodgates to coverage or is it simply the natural flow or progression of coverage available under such policies, subject always, of course, to the policy’s specific wording?

Michael Teitelbaum is a partner with Hughes Amys. Hughes Amys is a member firm of The ARC Group Canada.

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National Standing Committees 2009 – 2010 ADVISORY Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 401 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca Reno Daigle, CIP, CLA, FCIAA Crawford & Company (Canada) Inc. 326 McIntyre Street W. North Bay, ON P1B 2Z1 Phone: (705) 476-2120 Fax: (705) 476-9280 E-mail: Reno.Daigle@crawco.ca James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Jean-Marc Laurin, FPAA, CRM, FCIAA Cunningham Lindsey 1250 Guy Street, Suite 1000 Montreal, PQ H3H 2T4 Phone: (514) 938-2124 Fax: (514) 938-5445 E-mail: jmlaurin@cl-na.com John Jones, BA McLarens Canada Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@mclarens.ca Carol A. Messervey, CIP, FCIAA, FIFAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: cmesservey@marshadj.com CAREER RECRUITMENT PLANNING Wendy S. Fralick, AIIC Cunningham Lindsey 50 Burnhamthorpe Rd. W., Suite 1102 Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: wfralick@cl-na.com COMMUNICATIONS Craig J. Walker, CIP, FIFAA, FCIAA Maltman Group International 1049 McNicoll Avenue Toronto, ON M1W 3W6 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com John D. Seyler, AIIC Cunningham Lindsey 50 Burnhamthorpe Rd. W., Suite 1102 Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: jseyler@cl-na.com Jane Richardson, BBA, FCIP Crawford Adjusters (Canada) Inc. 237 Brownlow Ave., Suite 120 Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Jane.Richardson@crawco.ca Fred R. Plant, AIIC Plant Hope Adjusters Ltd. 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: fplant@planthope.com

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

FCIAA E. Brian Gough, FCIP, CLA, FCIAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: ebgough@marshadj.com

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

CONVENTION Allan B. Hart, BBA, CIP, CRM Coast Claims Service Ltd. 2727 Quadra Street, Suite 6 Victoria, BC V8T 4E5 Phone: (250) 386-3111 Fax: (250) 386-1473 E-mail: ahart@coastclaims.com

Robert V. Pearson, CLA, FCIAA AAL Alberta Ltd. 600 – 2424 4th Street S.W. Calgary, AB T2S 2T4 Phone: (403) 452 2195 Fax: (403) 452 3568 E-mail: rvp@aaladjusters.com

DISCIPLINE Reno Daigle, CIP, CLA, FCIAA Crawford & Company (Canada) Inc. 326 McIntyre Street W. North Bay, ON P1B 2Z1 Phone: (705) 476-2120 Fax: (705) 476-9280 E-mail: Reno.Daigle@crawco.ca

Jean-Marc Laurin, FPAA, CRM, FCIAA Cunningham Lindsey 1250 Guy Street, Suite 1000 Montreal, PQ H3H 2T4 Phone: (514) 938-2124 Fax: (514) 938-5445 E-mail: jmlaurin@cl-na.com

Carol A. Messervey, CIP, FCIAA, FIFAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: cmesservey@marshadj.com

EDITORIAL Fred Silvestri, BA, CIP NCRS 121 King Street W., Suite 1810 Toronto, ON M5H 3T9 Phone: (416) 733-9265 Fax: (416) 733-0510 E-mail: fred.silvestri@srsconnect.com John M. Sharoun, FIIC, CFE, FCIAA Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: John.Sharoun@crawco.ca Mary Charman, CIP Crawford & Company (Canada) Inc. 1 – 120 Mulock Drive Newmarket, ON L3Y 7C5 Phone: (905) 898-0008 Fax: (905) 898-1705 E-mail: Mary.Charman@crawco.ca EDUCATION Gary A. Ellis, BBA, FCIP, RF, FCIAA, CLA, FIFAA Crawford & Company (Canada) Inc. 18 Great George Street Charlottetown, PE C1A 4J6 Phone: (902) 566-1011 Fax: (902) 894-3044 E-mail: Gary.Ellis@crawco.ca W.E. (Ted) Baker, BA, CFE, FCIAA Baker, Bertrand, Chassé & Goguen Claim Services Limited 3660 Hurontario St., Suite 601 Mississauga, ON L5B 3C4 Phone: (905) 279-8880 Fax: (905) 279-5338 E-mail: webaker@bbcg.ca EMERGENCY MEASURES David W. Lyon, FCIP, CLA, FCIAA Cunningham Lindsey 111 Granton Drive, Suite 220 Richmond Hill, ON L4B 1L5 Phone: (905) 707-5527 Fax: (905) 764-3398 E-mail: dlyon@cl-na.com Roger S. Bickers, CIP, FCIAA McLarens Canada 600 Alden Road, Suite 600 Markham, ON L3R 0E7 Phone: (905) 946-9995 Fax: (905) 946-0171 E-mail: roger.bickers@mclarens.ca Carol A. Messervey, CIP, FCIAA, FIFAA Marsh Adjustment Bureau Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: cmesservey@marshadj.com

FINANCE Randy P. LaBrash, CIP, CFE, CFEI Crawford & Company (Canada) Inc. 300 – 191 Lombard Avenue Winnipeg, MB R3B 0X1 Phone: (204) 947-2340 Fax: (204) 943-9168 E-mail: Randy.Labrash@crawco.ca Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 – 1575 West Georgia St. Vancouver, BC V6G 2V3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 E-mail: pkernaghan@kernaghan.com Reno Daigle, CIP, CLA, FCIAA Crawford & Company (Canada) Inc. 326 McIntyre Street W. North Bay, ON P1B 2Z1 Phone: (705) 476-2120 Fax: (705) 476-9280 E-mail: Reno.Daigle@crawco.ca IBC: LIAISON & FORMS O. Martin Moran, CIP Cunningham Lindsey 50 Burnhamthorpe Road West, Suite 1102, Sussex Centre Mississauga, ON, L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: mmoran@cl-na.com LEGISLATIVE Russell E. Malkoske, BA, FCIP, CLA QA Adjusting Company 279 Provencher Blvd.

Winnipeg, MB R2H 0G6 Phone: (204) 233-8844 Fax: (204) 233-7793 E-mail: qa-russ@shaw.ca LICENSING J. Miles O. Barber, B.Comm.

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

Winnipeg, MB R3P 0B4 Phone: (204) 897-5793 Fax: (204) 897-5797 E-mail: mbarber@mts.net MEMBERSHIP & QUALIFICATIONS Rob Johnston Midwest Claims Services 320 Gardiner Park Court Regina, SK S4V 1R9 Phone: (306) 522-1656 Fax: (306) 569-1256 E-mail: rob@midwestclaims.ca NOMINATING Reno Daigle, CIP, CLA, FCIAA Crawford & Company (Canada) Inc. 326 McIntyre Street W. North Bay, ON P1B 2Z1 Phone: (705) 476-2120 Fax: (705) 476-9280 E-mail: Reno.Daigle@crawco.ca Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 – 1575 West Georgia St. Vancouver, BC V6G 2V3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 E-mail: pkernaghan@kernaghan.com

PRIVACY James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Wendy S. Fralick, AIIC Cunningham Lindsey 50 Burnhamthorpe Rd. W., Suite 1102 Mississauga, ON L5B 3C2 Phone: (905) 896-8181 Fax: (905) 896-3485 E-mail: wfralick@cl-na.com Keith P. Edwards, FCILA, CLA, FUEDI-ELAE CIAA Honorary Life Member c/o CIAA National Office 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca

CIAA REGIONAL PRESIDENTS 2009 – 2010 NEWFOUNDLAND & LABRADOR Neil F. Lacey, CIP, FCIAA Crawford & Company (Canada) Inc. 44 Torbay Road, Suite 300 St. John’s, NL A1A 2G4 Phone: (709) 753-6351 Fax: (709) 753-6129 E-mail: Neil.Lacey@crawco.ca NOVA SCOTIA Nicholas B. MacDonald, AIIC Cunningham Lindsey Canada Limited 11 Morris Drive, Suite 200 Dartmouth, NS B3B 1M2 Phone: (902) 421-1519 Fax: (902) 429-7296 E-mail: nmacdonald@cl-na.com NEW BRUNSWICK & PRINCE EDWARD ISLAND Luc Aucoin, BBA, FCIP Plant Hope Adjusters Ltd. 16 Coronation Drive Moncton, NB E1E 2X1 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: laucoin@planthope.com QUEBEC/AESIQ Charles A. Berthiaume Réclamations C. Berthiaume 44, Chemin d’Oka Saint-Eustache, PQ J7R 1K5 Phone: (450) 491-6165 Fax: (450) 491-6230 E-mail: rcb@reclamationscberthiaume.ca ONTARIO Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3, P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: richard@azclaims.ca MANITOBA Timothy W. Bromley J.P. Hamilton Adjusters Ltd. 125 Enfield Crescent Winnipeg, MB R2H 1A8 Phone: (204) 944-1057 Fax: (204) 944-1606 E-mail: tbromley@mts.net SASKATCHEWAN Rob Johnston Midwest Claims Services 320 Gardiner Park Court Regina, SK S4V 1R9 Phone: (306) 522-1656 Fax: (306) 569-1256 E-mail: rob@midwestclaims.ca WESTERN Bea Boutcher, CIP Horizon Adjusters Ltd. #207, 9814 – 97 Street Grande Prairie, AB T8V 8H5 Phone: (780) 402-8383 Fax: (780) 402-7888 E-mail: bea.boutcher@horizonadjusters.com PACIFIC TBA

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E

education forum

A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA

Building on a Promise: Construction Surety Bonds

uretyship is the act of legally becoming liable to one party for the debt, default or failure to perform of another party. There are many types of surety bonds, including fiduciary bonds, court bonds, permit bonds, licence bonds and tax bonds.

In this article, we look at construction contract bonds.

In technical terms, a surety bond is an agreement in which the obligor (the surety) guarantees fulfillment to the obligee of the principal’s obligation to perform the stated task. In construction, the contractor (usually a general or sub-contractor) is the principal, and the obligee is the beneficiary of the bonded obligation. The largest purchaser (beneficiary) of construction bonds is the federal government, although provincial and municipal governments also require bonds for major projects and private construction projects may require them as well.

Large general contractors may require that their key sub-trades provide bonds to secure their sub-contracts.

Three types of bonds are common in construction projects: bid bonds, performance bonds and labour and material payment bonds.

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Bid bonds A bid is an offer to enter into a contract. A bid bond, submitted with the 42

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bid, is a joint promise of the principal (the bidder, who is primarily liable) and the surety (who is contingently liable) that the principal will enter into a formal contract. A default occurs if the principal fails to enter into the contract after the bid is accepted.

The most common causes of default are the following: Bidder undergoes financial collapse after submitting the bid: In this case, the loss adjuster determines the validity of the bid and the acceptance by the obligee, and reviews any other bids that were made. If the bidding prices are close, the obligee can contract with the next lowest competent and comparable bidder, and the surety will settle the claim for the difference (within the specified bond limit).

Obligee causes delays in executing the contract: When delays occur, the principal may find it difficult to do the job at the original price quoted, especially if sub-contractors and material suppliers are facing cost increases.

When hardships are clearly established, the principal and the surety may be relieved of any further obligation. A thorough investigation into the reasons for any delays must be conducted.

Bidder revokes the bid after finding a mistake in it: This is the most common

reason to withdraw a bid or to refuse to enter into a contract. Preparing a bid is complex: large amounts of information are required and the bidder must rely on many sources not directly under its control. Generally, the bidder is not free to withdraw a bid after making a unilateral mistake and will not be relieved from the bid commitment when mistakes are the result of the estimator’s poor judgment or misinterpretation of the contract specifications. However, in some instances, the bidder may be relieved if there is an honest mistake of fact — such as addition or subtraction errors, typographical errors or transcription errors — that affects a material element of the agreement. To determine

Who’s Who in Construction Bonds The principal = the contractor — the party that’s supposed to do the work The obligee = the beneficiary under the bond — e.g., the owner of a building under construction The obligor = the surety — the party that provides the guarantee

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the nature of the mistake and assess liability, the loss adjuster should review the original tender specifications, the contract general conditions, the bidder’s working paper and the actual bid.

ly. Any delay could potentially increase the cost of completing the project, cause other financial loss exposures to the obligee, and result in allegations of improper claims handling and additional damages.

Performance bonds

Labour and material payment bonds A labour and material payment bond guarantees to an obligee that the principal will pay its sub-contractors

The basic function of a performance bond is to guarantee to the obligee that the principal will perform as contemplated in the contract and that, in the event of a default, the obligee can claim relief under the bond.

In construction performance bonds, the contractor or sub-contractor (the principal) has the primary obligation to build the project. The obligee is the owner of the construction project or the general contractor.

The surety and the principal are jointly and severally liable to the obligee for claims under the performance bond. The surety will be relieved of any duty to the owner if the contractor performs.

For an obligee to claim under the performance bond, the principal must be declared to be in default of the contract and must actually be proven to be in default, independently of the obligee’s assertions. The usual procedure is that the obligee declares the principal in default and makes a claim against the surety to force performance of the construction contract. Upon receiving a notice of loss, the surety should not be hasty in concluding that an actual default has occurred; a loss adjuster must thoroughly investigate the reasons behind the notice of default.

For example, if a contractor fails to perform on schedule, the owner can invoke a termination provision by providing details of the delay and giving notice of its intention to terminate the contract. But the contractor may have valid reasons for not continuing the work and therefore have grounds to refute the owner’s position.

When a default is alleged, the surety has a duty to investigate it prompt-

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For an obligee to claim under the performance bond, the principal must be declared to be in default of the contract and must actually be proven to be in default, independently of the obligee’s assertions.

allows for defined classes of unnamed suppliers and sub-contractors to make claim directly to the surety. The principal need not be in default of its contract with the obligee to qualify the labour and material claim—a surety should investigate each and every claim, even if the principal is still engaged in the contract and default is not apparent.

Generally speaking, all forms of labour improving the construction project are claimable under the payment bond. The bond further provides coverage to those parties providing essential services and certain equipment rentals. However, capital purchases made by the principal are not covered.

Following the financial collapse of a major contractor, the surety will face a large number of labour and material claims. Given that each bonded project is a separate and distinct contract, parties must identify precisely which project or projects are involved. This is especially important when the bond is limited to 50 per cent of the contract value — labour and material claims can exceed bond limits, and bonds do not contain provisions with respect to priority or timeliness of payments. The surety has an obligation to determine, within reason, the full extent of the labour and material bond obligations on any project before making payment. In cases where the claims exceed the bond limit, an effort should be made to determine the full debt obligation and make settlement on a pro rata basis, if possible.

In the next issue of Claims Canada, Education Forum looks at some of the surety’s options for responding to a claim.

and suppliers for labour and material used in the performance of the contract. This bond is purchased in addition to the performance bond.

Although the obligee is the specified beneficiary, the bond generally

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

April/May 2010

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O on the scene

Tracy Drew

Brad Arnold

Diane Lefebvre

Nathan Hall

Tracey Drew has been appointed director of sales for Cunningham Lindsey Canada, where she will be expanding the firm’s customer base across the country and increasing awareness of specialized claim solutions. Drew brings with her more than 25 years experience in the insurance industry.

She has worked as an adjuster as well as business development representative specializing in public entities.

Brad Arnold will be joining the company as branch manager of the Clinton and Stratford, Ont. offices.

Arnold holds a CIP and FCIP. He has worked as an underwriter for an insurance company and has been a field adjuster for the last 10 years.

The company has expanded its Ontario operation with the opening of a new office in Cornwall. Diane Lefebvre will serve as branch manager. She was most recently an adjuster in CLC’s Ottawa location.

Lefebvre brings more than a decade of claims experience to the role.

“The Cornwall office is strategically located to provide rapid claims response to losses in Eastern Ontario,” said Lorri Frederick, a senior vice president and executive director at CLC. Nathan Hall has been appointed branch manager of the Newmarket, Ont. office. Hall joins Cunningham Lindsey with more 12 years claims experience having held many senior positions including AB supervisor, claims manager and branch manager.●

Daryl Doiron has rejoined McLarens Canada as a senior adjuster in the Edmonton, Alta. office.

Doiron has 25 years of experience in claims adjusting, specializing in major casualty and property claims, as well as in complete liability management.

Lisa Foster has been appointed marketing and communications manager with McLarens.

Foster will be responsible for advancing McLarens’ strategic plan. This involves developing and executing marketing and communications initiatives to all internal and external stakeholders, as well as promoting the McLarens’ brand. ●

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Jean-Marc Laurin was honoured in front of 370 guests at AESIQ’s annual Sugar Shack event held Feb. 25 for his tremendous dedication and contribution to AESIQ, CIAA and the insurance industry.

L to R - Denis Duchesne, AESIQ; Patti Kernaghan, CIAA national president; Jean-Marc Laurin, CIAA director; Sandra Ross, AESIQ executive director and Charles Berthiaume, AESIQ president. ●

Dennis Turriff

Dennis Turriff joins MEA Forensic as a senior engineer with the product and property groups.

Turriff has expertise in metallurgy and materials science, with an emphasis on micro-structural, mechanical and thermal characterization of numerous metallic and nonmetallic materials.

Prior to joining MEA, Turriff was an instructor in the mechanical and mechatronics engineering department at the University of Waterloo. ●

CIAA New Members — February 2010 CORPORATE MEMBERSHIP AAL Adjusters Alberta Ltd. Calgary,AB McAuley Claims Services Ltd. Vancouver, BC INDIVIDUAL MEMBERSHIP AAL Adjusters Alberta Ltd. Garry B Watmough, FCIP, CRM Calgary, AB Robert Pearson Calgary, AB

Level 3 Level 3

Crawford and Company Wendy Cadman Sarah Roach

Level 1 Level 1

Toronto, ON Waterloo, ON

Cunningham Lindsay Canada Claims Services Ltd. Shannon Hong St. John`s, NL

Level 1

McAuley Claims Services Ltd. Patricia McAuley, CIP Vancouver, BC

Level 3

ProFormance Adjusting Solutions Inc. Sonja Bonanni, CIP Markham, ON Georgiana Chen, CIP Markham, ON Lesley McPherson, BA, CIP Markham, ON Lezley Quinn, CIP Markham, ON Gladys Aide Sortino Markham, ON

Level 3 Level 3 Level 3 Level 3 Level 1

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Winmar Franchise Corp. has opened a new location in Fredericton, NB. The 6,800-squarefoot building is equipped with Fireline and Esporta Wash Systems and is owned by Ryan and Eldon Toner.

Eldon Toner is currently the president of the Canadian Home Builders Association of Fredericton. ●

Claims Canada Wants You! Claims Canada magazine wants you to send us your company news, appointments and event photos for possible inclusion within our ‘On the Scene’ department.

Please help us share your items with the claims industry across the country.

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

Patti Kernaghan, national president of the Canadian Independent Adjusters’ Association, and Chris Fawcus, Insurance Institute of Canada’s board of governors chair, presented the CIAA sponsored national award for Top Graduate – Independent Adjuster to Bryan McRoberts of SCM Risk Management Services Inc. at the Insurance Institute of BC’s Convocation & Awards Luncheon on Nov. 26, 2009 in Vancouver. ● Crawford & Company is mobilizing its staff of in-country, regional and Global Technical Services (GTS) adjusters to handle the losses resulting from the Feb. 27 earthquake in Chile.

“Crawford’s offices in Chile are being supported by our professionals worldwide to ensure that we deliver superior adjusting services to the country’s residents and businesses so they can begin the recovery process,” said Jeffrey T. Bowman, Crawford president and CEO. ● Crawford & Company (Canada) Inc. is introducing its Crawford Contractor Connection service to the Canadian property and casualty marketplace.

Crawford Contractor Connection is intended to provide insurers with an efficient, high-quality, managed repair vendor network for residential and commercial property claims programs.

“Contractor recruitment, estimate reviews, assignment monitoring, reinspections, issue resolution and contract administration are all handled

by Contractor Connection to increase efficiency and reduce customer indemnity costs,” explained Pat Van Bakel, senior vice president of claims operations. ● www.claimscanada.ca

Diversity Matters Diverse perspectives, singular solutions.

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Within the firm we understand that the diverse perspectives of our lawyers offer our clients a more considered solution.

Come see things from our perspective.

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April/May 2010

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O on the scene CIAA’s Creative Strategic Plan Update

By Greg Merrithew The Creative Strategic Plan (CSP) is moving forward as planned. The board met with members at the mid-year meeting in Toronto and appproval was obtained from members on the direction the CSP is mapped out to take. In the last couple of months, the CSP team has achieved the following: • Met with membership at mid-year and obtained approval of the direction taken in the creative strategic plan.

• A strategy map has been set up and is being implemented.

To help communicate the CSP strategy, “Strategy for Change,” a PowerPoint presentation, has been created.

This will be provided to regional presidents who will present to the membership at the next opportunity.

Crawford Cares has presented a cheque for $80,661.95 to Women in Insurance Cancer Crusade (WICC) during a luncheon hosted in honour of WICC on Feb. 9.

In years past, Crawford & Company (Canada) employees have raised between $50,000 and $55,000 annually. This year, the donations increased exponentially to more than $80,000.

“This year, more than any other year, our employees completely embraced WICC and Crawford Cares,” Steve Anderson, senior vice president of corporate markets and administration, said. “They jumped in whole-heartedly and participated in various fundraisers, payroll deductions, the Relay for Life and other activities. I really don’t think we can express how proud we are of our staff and all of the efforts they consistently make for this wonderful cause.”

Crawford Cares has raised more than $330,000 for WICC since Crawford Cares inception in January 2004.

“Crawford employees threw their hats into the ring and raised the bar this year,” CEO John Sharoun said during the cheque presentation. “The addition of the Relay for Life event also really boosted our employees’ enthusiasm and fundraising efforts. We had a wonderful time staying up all night, honouring friends and loved ones, and for that event alone, employees and Crawford branches across Canada raised more than $25,000.” ●

• Communicating with the membership via e-blast has been implemented at the national level.

• Raising the profile of the CIAA has begun with a number of articles on CIAA and by association members recently published in trade magazines.

• Educational products have been prepared for webinar delivery to members. The first course on report writing was sold out and a second was offered. Other webinar courses are either in discussion or under development, including an Xactimate basic and advanced training seminar.

• Discussions have started with providers of products of value to independent adjusters at CIAA discounted rates.

Ryan Bennett, sledge hockey player and Olymic torch bearer, and Michael Pinball Clemons, vice chair of the Toronto Argonauts, were on-hand for the ceremonial puck drop at the Air Canada Centre for the HKMB HUB International 5th Annual Hockey Challenge for Charity.

This year’s event raised more than $11,000 for the United Way and more than $200 for Women in Insurance Cancer Crusade. ●

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www.claimscanada.ca

We’re Growing!

SPECS Limited, Canada’s leading provider of independent property damage valuations and loss cost control services, has opened 6 new branch offices across the country, to better serve its valued clients.

The Prairies Regina

Ontario Hawkesbury

BC Kelowna

Atlantic Canada Fredericton

Sudbury

Whistler

#5, 2080 Rae Street, Regina, SK S4T 2E5 Contact: Marc Poissant (306) 501-3846

23 Bridge Street Fredericton, NB E3A 4L3 Contact: Wayne Mayo (506) 461-2801

07, 178 Main Street East 2 Hawkesbury, K6A 1A5 Contact: Dan Myre (613) 632-7613

434 Westmount Avenue, Unit D Sudbury, ON P3A 5Z8 Contact: Bill Goulding (705) 560-5454

227, 1889 Springfield Road Kelowna, BC V1Y 5V5 Contact: Ed Gagne (250) 869-0030

12, 1020 Millar Creek Road Whistler, BC V0N 1B1 Contact: Ross Dallimore (604) 935-2250

For other office locations across the country please visit:

www.specs.ca

O on the scene More than 100 people came out on Feb. 24 for the Assured Automotive Group Grand Opening celebration. The event was the official launch for the new Assured Leaside facility. Located at 90 Wicksteed Ave in Toronto, the 5000 sq ft repair facility showed off some leading edge technology. ●

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A great time was had by all at the third annual McCague Borlack LLP ski day at Alpine Ski Resort in Collingwood. The attendees lent support to the Canadian Cancer Society through the purchase of merchandise and raffle tickets at the inaugural Titz’n Glitz campaign held simultaneously at Alpine Ski Club. �

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April/May 2010

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O on the scene More than 150 exhibitors from across Canada showcased the latest and greatest in the industry at the Ontario Insurance Adjusters’ Association (OIAA) Professional Development & Claims Conference in Toronto on Feb. 3. The event featured a trade show and seminars covering a wide variety of timely claims topics. Celebrity chef David Adjey, best known for his work on the Food Networks’ Restaurant Makeover, was the luncheon keynote speaker. During the lunch, the OIAA presented a cheque for $6,110 to the Big Brothers and Big Sisters of Canada. ●

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www.claimscanada.ca

WHEN DISASTER STRIKES

The full service restoration company with over 60 service locations across Canada.

Commercial or Residential “We Always Come Through for You” 24 Hour Assignment/Emergency Response

Toll Free 1-866-4-WINMAR (494-6627)

Proud to be Canadian owned & operated.

For more information visit www.winmar.ca

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April/May 2010

Claims Canada

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O on the scene More than 300 guests — the biggest turnout to date — attended the 4th Annual Post CICMA/CIAA Joint Conference Cocktail. The event, hosted by Giffin Koerth Forensics and Blouin, Dunn LLP, was held at the Loose Moose Tap & Grill on Feb. 2. In addition to the opportunity to catch up with friends and colleagues, attendees could have their photos taken with angels and devils. ●

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www.claimscanada.ca

www.claimscanada.ca

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O on the scene Celebrating its 50th anniversary in 2010, the Toronto Insurance Women’s Association (TIWA) Wine and Cheese event was held on Feb. 4 at a new venue this year — the Atlantis Pavilions, Ontario Place. More than 1,200 guests attended the event themed “One City. Many Nations.” The event featured networking opportunities and numerous prize draws. ●

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After all, delivering a claims experience that is fair, easy and respectful is what we’re here to do, every day.

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HOME • AUTO • BUSINESS Certain conditions, restrictions and exclusions may apply. Services are not available in Saskatchewan or Newfoundland. The BIP logo is a registered trademark of the Insurance Brokers Association of Canada (IBAC) used with permission. All other trademarks are properties of Intact Financial Corporation used under license. © 2010, Intact Insurance Company. All rights reserved.