If you are reading this and own or lend on student housing where the insurance policy does not identify as such, e.g. shows as “apartment building” on your policy – do yourself a huge favour and ask to have the policy amended by the insurance company – not just the agent/broker.

Some commercial realtors are not yet realizing the predicament in which this places an investor – buyer or seller (and also the realtor) – if you own any of the many student apartments being advertised as such.  And many insurance salespeople are also not aware of the consequences to the client, the firm (brokerage or agency) or the insurance company if written as an apartment building and a claim occurs.  If declined by an insurance company for “material misrepresentation”, our whole industry is tarnished by your oversight and I, for one, do not appreciate hearing of another insurance company claim that was not paid, legitimately or otherwise.

Insurance companies on both sides of the border do not like multiple tenanted risks – “rooming houses” by definition – and most of these student apartments have 5 in each unit; well, how can anyone describe this occupancy in any other terms?  If you don’t wish to take my word for it, please do some research and you will quickly learn and agree with me.

Many of you (I have to take each of you at your word when I hear that Aviva, Economical, etc. are insuring you) have an insurance policy that may not respond to a claim in the event of a loss – property or liability – because the insurance company will not insure “student residences”!  Yes, this is common knowledge among the insurance community so anyone who is insuring as an apartment building had better be extremely careful in dealing with you; do NOT rely on their written evidence that you have an insurance policy but insist on the insurance company showing on the policy or verifying in writing that you have students occupying the property.  There are acceptable insurance markets for this category of risk – Lloyd’s being one, Zurich (yes, we have access for fire-resistant structures through this carrier) and, possibly, others through “subscription” or wholesale facilities.

I specailize in working with investors, lenders and property managers so why not just contact me for advice and assistance to ensure that you do not face the terrible consequences of having an insurance policy but not really having insurance?  I have an appointment this week with someone who thought State Farm still wrote student apartments until they contacted the company to determine otherwise (after I encouraged them to obtain written verification that they do have coverage).

And one final note: ask your insurance professional to explain cancellation when done “ab initio” – it means that you were cancelled as if there never was any insurance policy written.  I am sure that you do not wish for that to happen to you!

The office I phoned was a smaller brokerage I know that advertises they insure these exact type buildings (I’ve run into them in my travels) and did exactly what they were expected to do – ask me for my information where I was very evasive since I am a competitor of theirs, unknown to them as John Smith.

Because they have a website and a Facebook page, it becomes easier to document what I need to use in a blog of this sort.  There are “X” insurance “markets” showing in total for their firm – this includes Auto, Substandard Auto, Surety, etc.  This means I can eliminate several and a few more who have expressed to us  (Aviva, for example, does not have the property capacity to exceed $1Million, Intact has withdrawn quotes and Economical refuse to insure) that they do not have an interest in insuring “student housing/apartments” of any sort in our geographic territory (I won’t say they do not in other parts of our country or the world because I know they do have smaller percentages of property on subscription policies available through specialty wholesale markets) – Ontario, CANADA.

I will say the broker stretched the truth, unless they were counting wholesale markets when replying to me.  Why tell me one has 4 or 5 insurance companies that will insure this kind of risk?  Either it is a lie to the caller or to the insurance company when describing the type of business when quoting is requested – OK, I will tell you their firm is also a member of an apartment managers association, and, if they were a larger brokerage, may then have exactly what they told me BUT they are NOT.

I will not accuse the brokerage of misrepresenting to the insurance company – I have only seen 1 policy they had in force where I know this may have happened but if you’re a member of an association, would it not be easier for an insurance brokerage to include this sort of property in their portfolio?

What I do know is that there are several insurance brokerages in my territory of operation who have been misrepresenting STUDENT APARTMENTS to the insurance companies as APARTMENT BUILDINGS – and, for those who are not familiar with the differences, they are huge!  An apartment will house a single family or a couple of unrelated individuals – NOT 5 students who are unrelated in EACH apartment unit.  The risk is greater and very significant to an insurance company so why would any insurance company insure for the same premiums as an apartment and 1/3 or 1/4 what Lloyd’s might charge for Student Rooming Houses?  They would not, knowingly!

I have been researching this a great deal – in both Canada and the USA – and will tell you that there is a good likelihood, in the event of a significant claim, you will find you do NOT have any insurance so why pay for a policy that is not going to respond when you need it to?  If you are paying an insurance premium for “fool’s gold”, do you really believe you can collect for “gold” after the loss?  I am not trying to scare business to my door but being very practical and hope that each of my readers understands that.

It would be easy to document for any company underwriter where the streets are (there are at least a half dozen university campuses – Guelph, Laurier, Waterloo, Western, McMaster, Conestoga – within 1-1.5 hour drive of my home office).  Since I am so familiar with the territory, why not ask?  Even Google Maps will assist if you’re not anxious to contact me.  For those underwriters who are not familiar with this simple fact – Economical and Aviva are presently on risk for many of these buildings that they will not and do not insure – HMMMMM!  How many other insurance companies are insuring “multi-family apartments” within 1-2 kms. of an university campus?  Look at Google Maps and check your building addresses and descriptions!

Knowing that the market in the USA is anticipated to grow (and Canada is following suit) where starts were expected to tally as much in 2011 as in the prior 3 years, I fully understand why insurance brokers are targeting this sort of risk but how long before your reputation is tarnished by not disclosing to your underwriters what is being insured?  How long will it be before loss ratios mount and you risk losing company contracts?

Yes, it may be an impossible task for me to educate everyone involved in the buying, selling and investing in the latest real estate craze but I surely hope to try.  Insurance companies do not have to pay a claim or defend you if there is any known “material misrepresentation” and it will then be up to you to decide how to pursue your insurance agent/broker.  What is the cost – both financially and in time – to you?

Try cutting to the root of the problem and discuss with a professional who is expert in the field of student housing.  I await your comments, mail, calls.  And I cover from Ottawa to Windsor and do know the niche!

Unfortunately, I have to be critical of competitors of mine which I don’t really like to do.  The reason is that I have seen something, recently, that brought this to the forefront while I have been contemplating it for the past 1-2 (surely, it can’t be 10-20) years now.

When an individual or business owner wishes to “shop” his/her insurance, how should this be done?  Should research be done into the insurance agent/broker and what degree of checking can they do?  Do you care about the “rating” of the insurance company that is quoting and issuing the insurance policy?  What significance is that to whether a claim – your claim – might be reimbursed?  Can an insurance company not pay a claim?  What is “Material Misrepresentation” and something called cancelling “ab initio”?

I’ve been through some excellent training – yes, even Roger Sitkins may have an excellent approach – but I don’t always agree with what is being implemented (hiring people from outside the insurance industry with various specialties and experience to then sell to those same industries but not really know anything about insurance?).  Might that not give cause for misrepresenting the description of operations (how important can this be?) to an insurance underwriter because of a lack of understanding of the insurance business?

Having seen a number of insurance “contracts” – yes, that is what the policy is and what the broker/agent’s “summary of insurance” (or any other written offer/binder until the insurance policy is issued) is – that do NOT properly address a client’s true “description of operations” is incomprehensible.  For many years, I have known of insurance companies who refuse to quote a submission where a licensed restaurant/facility may occupy a strip shopping plaza or where a portion of a multi-tenanted building is vacant.  And yet, that same insurance company will be insuring many clients in that identical situation!

How can any agent/broker explain to his/her client the reasoning behind this?  I don’t know if it is possible!  As to why one individual will provide a quote from “XYZ Insurance Co.” and that same company has declined similar/identical submissions to another broker?  Well, an important reason can be the information that was provided to an underwriter!  If I describe an apartment building that houses 5 or 6 students in each unit as a High-Rise Apartment Building, will I see the same result as a properly worded submission – “High-Rise Apartment Building occupied as Student Housing”?  Anyone who is familiar with our industry will know that the answer to this question is very obvious!  It is just as apparent to a seasoned veteran as describing a frame building as fire-resistive and we all should know that critical difference.

This week, I was advised by an insurance company that they have a “capacity” of $1,000,000 for property in a specific class of business – meaning buildings, contents, etc. (and $1,000,000 is NOT a large sum of money).  To insure a greater amount will then require obtaining their Head Office approval and the possibility of purchasing “re-insurance” at much higher rates than their normal charge might be – this is not too likely to happen!  They would, in all likelihood, not be competitive, either.  That company, apparently, quoted a competitor of mine (according to a client) for $20,000,000+ in Property values at lower premiums – hmmm?  What does that tell you?  It tells me the insurance company may now rescind that very quote (and I would hate to be the broker having to explain that one to the client – oh, it is easy to say it’s the insurance company’s fault, right?).

And when there is a claim that your (not my) client – I’m now directing this at my competition – expects to be reimbursed by the insurance company, will you be there to explain why – due to “material misrepresentation” – that the insurance company refused to pay?  I surely hope so but tend to doubt it.  Maybe my industry competition will claim that this is a case of my crying over “sour grapes” but I was raised in a family where a handshake meant something and a written contract wasn’t necessary (yes, I know those were the days, as is often said) and credibility and integrity still mean something to me!  Where is your integrity and credibility going to be?

I have known, countless times, of manufacturers who exported most of their product and were not paying suitable liability insurance because the company underwriter has limits for percentages of foreign sales and was never advised that they were exceeded (e.g. 10% when it was 90%!).  One instance, I know quite well, was a Wholesaler/Importer of goods from Southeast Asia where the insurance company was not aware of what the product was or where it was manufactured – and yes, it was “critical”!  Yes, company websites are checked, sometimes, and the info showing can be significant in the event an underwriter is reviewing your quote or renewal.

Having as many years in this industry, as I do, should give some of my clients and prospective clientele a degree of comfort but when another individual can insure someone for not 15-20% less but at 1/3 of my quoted premium, will you be really caring about that?  I surely hope so!  Then again, maybe you will think that insurance is a necessary evil and that nothing will ever happen to you and your business!  GOOD LUCK!

Oh, if you really care to know more about “material misrepresentation”, cancellation “ab initio”, etc., please contact me by your feedback, here or elsewhere, on the many postings I have.  Only then you may find that your provider is not too credible and wish to replace him/her!  But I won’t be waiting with nothing to occupy my time because I do have many clients who want a professional handling their insurance business for them.

How does Japan affect Canada and how is it possible that it will have any impact on my clientele? If you reside in Ontario, Southwestern Ontario, the “GTA”, “Golden Horseshoe” or Waterloo Region, invest in real estate or own any business, what am I possibly thinking, eh? Well, I have seen indications that Natural Gas prices are rising around the world – so? Remembering how Hurricanes Andrew and Katrina impacted the cost of building materials – construction items like labour and lumber – following their aftermath, several years ago, made me think about the buildings and contents of my many clients and what other businesses and investors own. Whenever a disaster like this happens, there are worldwide effects on many items.

One example is the manufacturers who import their machinery/equipment from outside the borders of our country – yes, we have seen a large increase in that during the economic recovery of 2010/11 – and watching the value of the “loonie” against the Greenback and Euro on a daily basis. This is something that I like to remind business-people, especially the small manufacturer, about (currency risk) and I don’t know many of my competitors in the insurance sector who ever discuss this with their clientele.

A second example is Trade Credit because what about the many businesses that will not be able to re-open after a disaster such as this? I know that we will not suffer any tsunami, in our interior position in Canada, but there are many other types of disasters we could face and what of our customers? Why would you have Export Development Canada (EDC), which is a fine Government Agency, handle insuring your Accounts Receivable when there may be other options, less costly and/or better, available? Why have a banker insist (most don’t, would you believe?) that you obtain this form of protection because they no longer feel your risk is acceptable to them (and you can be guaranteed that it will be a high risk, long before it gets to this point)?

A third example is that of “Contingent Risks”. I know this does not impact many manufacturers, wholesalers or retailers (really?) but I have 1 client who mentioned something to me (yes, I continue to learn from my clients, too) of his concern in an area that is unique – 60-70% of this firm’s goods are from one American firm and his concern with contingent supplier chain management is with “key person” protection (life and disability) as opposed to the normal Property/Casualty “we” might think about (fire, flood, earthquake, etc.).

Another example is the building owner who “knows” what it costs (OK, I’m now thinking of the builders/developers) who build and own a high-rise apartment building or industrial structure – what if you own several or many properties and would be reconstructing yourself? Do you ever consider what the impact of an earthquake damaging many of your buildings might mean? The insurance company will pay for lost rental income but not if there is a delay in the repairs/rebuilding that might occur if you have 10-12 buildings and are only able to handle 3-4, correct? How will your Lenders – the banks, mortgage companies, life insurance companies, etc. – feel, then? What of the length of term you may then require for “rental income” interruption? I can think of 1 client, in particular, who knows what the constructions costs are of their multiple properties, having extended reconstruction terms for business interruption, but has not addressed the potential for increased reconstruction costs – this is something we will be addressing today – and a partial but significant loss is much different than a total loss (remember that term “co-insurance”?).

Realtors – yes, I am targeting my friends in the community at CB Richard Ellis (Dietmar Sommerfeld, et al.), Mr. Benjamin Bach, DTZ Barnicke, Colliers and Coldwell Banker/Peter Benninger, etc. (gee, I hope I am now getting some internet hits for this J) – that know which of their clients should think about this in a manner different from “tradition”. I am NOT the traditional insurance broker but a broker who emphasizes Risk and discusses Risk Appetite with my clients.

Bankers and lenders – I know you cannot direct business but keep this in mind when you are funding your loans! Some requirements are reasonable, others are not and you can refer to me for advice on what is and should be required by you.

Lawyers – you should well know of your Errors and Omissions exposures when handling legal matters but why not assist your clients in providing for all their professional requirements?

I do wish to state that my prayers are with the Japanese at this time and I hate to use their disaster as an excuse for my writing this blog. I am ill when seeing the images of their recent and ongoing sadness and I choose this word because I am at a loss for a proper description of what they have faced. I hope the world will come together like we have never seen – and help you rebuild your ravaged country.

What are we seeing in the Canadian, particularly Ontario, Commercial Insurance marketplace? As I have found out, it is not worthwhile for businesses that are doing anything different (hmmm, what do I mean by different? OK – stores and offices) to try and obtain their best coverage and premiums from smaller insurance brokers.

Examples include Accountants who require Errors & Omissions insurance like one I insured this week. They had office insurance with a broker who was able to offer as “normal” a policy as anyone (I use this term because I do feel offices are easily written by most people in our industry) and their E&O coverage through another broker. This other broker was familiar with a Lloyd’s market offering such coverage and both brokers are losing because they missed the chance to cross-sell the client. Where else have they missed that I have not? The firm has referred a client, a manufacturer, to me who has already purchased one policy and will be moving another five or six policies during the course of this year and I plan to cross-sell personal insurance to the accountant, too.

If you’re in the Engineering or Architectural sector, we now have an eager market offering coverage and would enjoy quoting on your businesses, including Errors & Omissions Liability.

Another example is a large developer/investor in properties who was never offered personal or commercial umbrella insurance by their prior agent and brokers (yes, they were insured with multiple firms). I have met with the client on numerous occasions to discuss the many different exposures they face and have moved most of their business during the past six months with the balance to come during 2011. The client even made a phone call to a business partner on one of their projects to introduce me and insist an appointment be given to me. Saving the client 20+% from their prior year’s insurance costs did not hurt, either, especially when they were paying in excess of six figures. We have now developed a program for this class of business and have been insuring several other property owners in this field of endeavor.

For anyone in the pursuit of unique business opportunities we can obtain superb coverage for you. I wrote a golf simulator’s insurance at rates that were exceptional, especially when compared with what he had been offered elsewhere. I am working with another insurance broker who is unable to offer coverage to two of his clients in construction due to a lack of competitive markets with other brokers, one being a residential multi-family project and the other performing single family renovation and remodeling. A new client, whom I have known for many years, has placed their High Value Home (with some unique requirements) through me. As noted in a prior blog or one of my social media announcements, I have written a Flea Market Vendor, Student Housing properties, a Residential Mover and many different types of business entities.

With the markets we have available to our brokerage, we can write Martial Arts Studios, Fitness Clubs, Tanning Studios, Hobby Clubs, Spas, Vacant Properties, Sports Bars, Franchises, Cargo, Marinas, IT Professionals, Contractors Pollution Liability, Directors & Officers Liability – the field goes on and on. Just let us see what you do and we’ll do our best to offer a package of protection that you will be pleased to purchase.

I attended a seminar this week and was astounded to hear my competition discuss how difficult their lives have been – being declined and policies being non-renewed, rates increasing, etc. If you’re not thoroughly pleased with your policy/provider, I suggest you contact me immediately at larryewinsurance@gmail.com .

Have a great 2011! I know I am and will be.

For example, I was just reviewing an e-mail from one of our markets and here is a sampling of the unique classes they insure for us:

• Individual personal trainers;
• Fitness studios;
• Mixed martial arts;
• Injectable treatments like botox and collagen;
• Lipo-laser operations;
• Laser hair reduction;
• Teeth whitening;
• Tanning salons

If that is not a diverse enough sampling, I am happy to try:

• Demolition contractors;
• Environmental remediation and abatement;
• Restoration and emergency spill response;
• Environmental consulting and assessment.

Or maybe:

• IT consultants;
• Website developers;
• Network support services;
• Software developers;
• Data storage/retrieval services;
• Web hosting services;
• Computer training.

And if that is not your “cup of tea”, how about:

• Builders risk and wrap-up liability;
• For-profit and not-for-profit directors and officers liability;
• Professional errors and omissions/malpractice liability;
• Environmental liability;
• Surety including bid and performance bonds;
• Trade credit/accounts receivable;
• Employee dishonesty/fidelity bonds;
• Product recall expenses;
• Umbrella liability;
• Contingent business interruption of a customer or supplier;
• Franchising, nationally and internationally.

If you are operating a business in Ontario, CANADA – why worry about finding a suitable insurance provider? Avoid worry, save time and guarantee yourself peace of mind by dealing with knowledgeable and reputable providers – broker(s) and insurance companies. Don’t look further than here – A-rated insurance carriers with Canada’s oldest insurance brokerage. We specialize in Commercial Insurance so you don’t need to do the same!

If you operate a franchise in Canada that has franchisees in Ontario, we can provide coverage nationally and internationally, for you. There are many different types of policies available and we have the necessary experience to recommend the one best suited for you.

I can be reached at larryewinsurance@gmail.com

I hope you have as wonderful a year as possible. I am certain to do the same.

I was enjoying a phone conversation with a prospective client and long-time acquaintance of mine (yes, I’ve known him for 15+ years but really never pursued his business until now). This prospect is wishing to expand his business by opening other locations. I will call him “A” so that you can readily identify him. What is “A’s” business? A licensed pub is what it is and one of the locations we discussed is a former pub site that I have known well for 15+ years, too. The reason it became vacant is that the landlord/property manager increased rents to such an extent that the tenant decided to close up their business. What I enjoyed about the discussion with “A” is that he mentioned an idea that gave rise to my mind thinking of potential lawsuits – now, is that not a great way for a Risk Manager/Insurance Broker to begin 2011? At the minimum, it will encourage growth of my business, right?!

“A” suggested that a landlord might have a rental escalation clause after an introductory period that might be significant and could result in a tenant being forced into bankruptcy. I started to think that potential creditors might receive counsel that the landlord/property manager may have contributed to the demise of a tenant’s business; if that were the case, would it not then be possible the landlord/property manager might then be named in any lawsuit? I am curious to know if anything like this has ever happened or whether my expert and learned readers might agree with me that there is a chance that lawyers might be drawn into this type of arrangement?

Example – introductory rents for 6 months of $15/sf (OK, I’m not really serious about the amounts but I’m using this for ease in working with) which then escalate to $25/sf of a long-term lease? This example means an increase of approximately 65% which is quite sizable. Would this not be significant enough to cause default if incomes were not increasing, especially if the landlord/property manager had a prior tenant with the same style of business occupying their properties previously and/or if the increased amount was out of line with comparable real estate in the area? Could this not be a cause for a creditor to then sue the landlord/property manager or include its Directors and Officers (D&O) in a claim for payment of a defaulted contract? I propose that it could be, especially with the circumstances I am proposing here. We all know that lawyers’ fees can be significant so is this not another reason to purchase D&O Liability Insurance?

Your thoughts are most welcome and encouraged!

Happy New Year to all.

Last week, I had the pleasure of identifying several weaknesses in our own firm’s marketing by listening to Faith Seekings, an online connection of mine on Facebook, LinkedIn, etc., while attending the AGM for the Canadian Institute of Management’s Toronto Chapter. I will be the last to admit that our firm is not without fault but we are always searching for ways to improve.

Last night, I attended a joint dinner meeting of the CIM/CMA/CGA Grand Valley in Kitchener and listened to Eugene Roman, in charge of New Product Development for Open Text, one of the numerous success stories of “Canada’s Technology Triangle”. Eugene spoke on issues that directly impact my own industry and attract my attention – risk, compliance, records retention, etc.

So how does this relate to my lack of tolerance then? For anyone who doesn’t know me, I have worked in the “insurance field” for 20+ years, including Risk Management, following a lengthy banking career in both Canada and the USA. I have seen much and I am constantly “shaking my head” at others’ lack of understanding of our business but this week…it was the “icing on the cake”.

For years, I have been in the minority when suggesting that if an insurance broker does not understand the business you, the client, operate, either learn it very fast or suggest that you deal with someone who has the level of expertise required to adequately protect you and to offer you advice.

Now…the rest of the story, as one of my favourite radio phrases goes…A residential builder that I have known for several years and pursued for most of that time has provided me with copies of the firm’s insurance policies – a shambles due to anyone’s lack of insurance understanding (so I am not blaming or placing fault on him) and having many different policies all due at different calendar dates. I know the insurance brokerage well and this client is one of that firm’s largest clients – and surprisingly, does not receive anything special in the area of service (possibly because the brokerage is afraid of the builder learning how inept their firm is).

One project that is currently under construction has 2 phases – with a total “insured value” of $500,000. The problem only begins when I questioned the builder as to his cost and am told the 1 townhouse structure is $800,000. The worst part of the problem is that the 1 building is nearing completion and won’t finish for another 4-5 weeks while the other building is framed and roofed and ready for the exterior to commence.

If a fire occurs and demolishes both structures (likely to happen with high winds and very frequent in the insurance industry), he is required to insure to 100% of his final cost and is penalized for every dollar of loss, except that he only has $500,000 TOTAL when he may lose $1,000,000+.

Will he be bankrupt, at that point, due to the insurance professional’s lack of business acumen? I hate to imagine anyone ever losing their business because they relied on professionals who were less than that. What might my recommendation be? For anyone without a sufficient understanding of risk management and insurance, never rely on anyone for too long without obtaining a second opinion – it might be the difference between success and failure for your company.

I heard an excellent presentation by Faith Seekings at the Toronto Chapter of CIM’s AGM (for anyone who doesn’t know, CIM is the Canadian Institute of Management) with whom I am fortunate to be connected by LinkedIn, Facebook and Twitter, as well as personally. I highly recommend her for anyone looking to synchronize their marketing efforts to show some level of uniformity from a website to business cards to stationery, brochures and corporate image.

Yesterday, I also heard someone whom I have wanted to see in person for awhile, now – Wolfgang Jaksch – and the introduction by MediConsult of their new iMRS which will be available in North America in early 2011. My wife has been treated by a health professional with the current MRS offering and I try to keep an open mind concerning anything in life so that “electro-magnetic resonance” is, obviously, something I want to know more about. Wolf even ended his presentation with an introduction to a new online “health network” – www.wellaxy.com – and I wish to promote this site for good health and health-related exchanges of information.

What else is happening, from a business standpoint? It seems that my best month for new business in 9 years (yes, September was amazing) has been the catalyst for some “good luck”, though hard work seems to be the oxygen that ignited the flame. I have been attempting to close a deal for a home builder and was introduced to a realtor who also has need of commercial insurance. Then another home builder and I spoke about insuring “common elements” for a condo complex they are constructing – seems that their insurance broker may not have known it possible to insure (what other reason for the lack of service since it took them so long to provide a reply).

One account on which I have been working has added 6 other properties to insure and a former small business client of mine has asked me to quote on his business again. Recently, I insured a flea market booth for a long-time acquaintance of mine who then proceeded to provide me with a directory of listings to assist me in my solicitation efforts. Another source of business referred prospective clients to me, a new business associate has asked me to work with her on some clients and a member of the Guild of ICIA & CIM has asked me to prepare a quote for a new business of his.

Whether it be general commercial property/liability, commercial auto, Directors’ & Officers’ Liability, Builder’s Risk, Liquor Liability, Group Home/Auto or something as unique as “franchises”, “student rooming houses”, “hot dog carts”, “chip wagons” or Specialized Liability (including Product Recall and Errors & Omissions), I am ready to discuss with you.

My spreadsheet of activity for 2011 is quite substantial – including “hot” files and “cold” files that I hope to move into the warmer category during the next year. What is the reason for much of this activity and confidence? In the past, I felt that I needed to quote “apples to apples”, even if I did not agree with the coverage and deductibles. With limited markets available, it meant that I was unable to provide suitable quotes to a prospect to enable the closing of a deal. Now, our carriers are numerous – enabling us to offer reduced premiums and better coverage in most cases, allowing me to provide terms that I feel are the best for the client’s long-term insurance needs.

Why should a client have low deductibles ($500 or $1,000) if the business is most suited to $5,000 or $10,000 (or higher) deductible – yes, premiums will be lower but the client will not be faced with considering his/her filing a small claim that might mean a policy being non-renewed or having terms amended and fewer insurance companies wanting to insure that client. As the client’s “risk manager”, I might be making the decision but am expert enough to realize it is in the best interest of that client. That is a big difference, the difference from prior packaging and presentation. Confident, yes! But better yet, experienced and certain – not thinking inside old parameters but “outside the box”.

Having spent 2+ years reviewing $1.5+B in Commercial Loans provides one with an insight into the insurance industry that even an insurance professional would never normally experience.

What do I mean?  Well, with nearly 20 years in Retail Commercial Banking in both Canada and the USA, I knew that banks do not fully (and never will) comprehend the Commercial Property/Casualty Insurance business.  Yes, I did have some insight into the wonderful world of insurance, having grown up at the dinner table with a father and older brother discussing the intricacies of their day’s activities – Lucky Me!

So that just made it easier to enter the field when I decided that I needed a change and I now have spent 20+ years in this sector of Financial Services.

Following 9/11, I wanted to become more attuned to Risk Management and obtained my Canadian Risk Manager designation (well, I was a Registered Insurance Broker and had previously obtained my American Institute of Banking Commercial Lending Diploma, so why not?) in order to better understand risk as opposed to insurance.

Well, I thought I had seen a lot until the past 2 years of working on Loan Reviews – and this was a real eye-opener!  Borrowers agree to terms in their Loans whereby they don’t ever ask their insurance providers about the terms/conditions regarding insurance and costs, prior to signing (yes, they may confer with their Lawyers but, unless their Lawyer works with qualified insurance people, they cannot adequately advise on the subject of insurance, either).  Lenders neglect to confer with Risk Consultants prior to formulating their own desired requirements and Lawyers do not fully understand what is available and what will never be available in the insurance industry.

An example, I saw, is a Lender who decided to offer facilities to a Client on a number of properties  with a $5Million Liability minimum requirement.  The Insurance Broker offered $5Million on a blanket basis for 37 properties in the Aggregate – something that would, in many cases, be grossly inadequate!  The Lender did not have the ability to amend their Agreement, except within a condition they preferred not to apply to the Borrower – something that I encouraged be done.  I also know of several insurance “professionals” who would never have sold only a $5Million Liability policy in the Aggregate without Umbrella/Excess coverage being applied but the firm insuring these risks did not do so.

What a problem, right?  Well, how about insurance providers who only wish to make a sale and never request copies of leases, contracts, franchise and loan agreements, etc. but also provide ridiculously low deductibles for extremely high property values and then complain that their clients will not pay the added insurance premiums!  I saw this time and time again.

Imagine being able to purchase insurance or consulting service from a professional who was able to reduce your insurance costs and provide better coverage – is this possible?  Many times, the answer is a simple YES!

If anyone – lawyer, accountant, lender, insurance sales professional or a company/business-owner – wishes to contact me for further discussion on this topic, please e-mail me at WRiskManagerBlog@gmail.com with the Subject Line – Contractual Liability and/or Compliance?

I look forward to hearing from anyone reading this blog here or on one of my online network sites.