Is a Second Opinion Worthwhile?

It is possible that, with age/maturity, I have learned a few things in my life but I’m slowly losing my tolerance for others’ stupidity or lack of knowledge when they should (because they’re professionals) know better. Why do I feel this way? To begin, I enjoy learning – profusely learning – through reading, whether it be online, books, periodicals, etc. and attending seminars, speeches, etc. I hope you do too because learning should never stop, especially for professionals – experts in their fields of practice.

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.

Advertisements

One Response to “Is a Second Opinion Worthwhile?”

  1. Asset Tracing Says:

    Its good to always have a back up plan in all your risk takings. This will prevent you further loss and lets you have insurance in your gains.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: