Presentation on theme: "CHBA Builder Breakfast Session LOSS PREVENTION Creating a relationship between your project and your insurer."— Presentation transcript:
CHBA Builder Breakfast Session LOSS PREVENTION Creating a relationship between your project and your insurer
BFL CANADA INSURANCE SERVICES INC. 200, 1167 KENSINGTON CRESCENT NW CALGARY, AB T2N 1X7 (403) MAIN Presenter: Ann Donald, FCIP, CRM Vice President – Account Executive
Session Overview -Overview of various Insurance policies generally used in the construction industry. -Matching the insurance policy to what happens in the field. -Claims examples. -What you can do to help keep the insurance budget in check.
What Do You See? Opportunity A vision for the future A new community A job A career Organization & Logistics Headaches Creating something that lasts Growth Professional pride Risks Hazards Being smart about what you do
What does the insurer see? Risks associated with operations hazards of their policyholders Risks to the insured (you) Risks to the public (third parties) Loss Prevention Claims Management Rates & Pricing Relative to the risks Industry statistics Individual insureds statistics Business retention Client relations Overall ROI – the business of insurance
Construction Risks Examples of Owned Property Buildings Contents of the business (office contents, computers, manufacturing equipment, inventory, work in progress) Equipment & Tools used in the field Automobiles Buildings under construction Show Homes & Show Home Contents Exposures -Relating to Owned Property -Relating to Third Parties
Construction Risks Examples of Third Party Risks Damage to property of others Bodily Injury or Death Personal Injury (libel & slander) Indirect & Consequential Losses Damage to Completed Projects (completed operations exposures – beyond warranty) Pollution Errors & Omissions Exposures -Relating to Owned Property -Relating to Third Parties
Owned Property various insurance policies available Some Examples of Insurance Coverage Available: Building Insurance Contents Insurance (vrs. forms) Equipment Breakdown Business Interruption (vrs. Forms) Employee Dishonesty & Crime Equipment & Tools Builders Risk (for Home Builders & General Contractors) Installation Floater (for Sub Contractors) Automobile Insurance Cargo Insurance/Property in Transit The Purpose of Insurance Insurance is a mechanism to provide reimbursement for an insured loss that an insured person may suffer. Insurable Risks Risk – Means the chance of loss Pure Risk – There is a chance of loss, but there is no chance of profit. (an automobile collision) Speculative Risk – There is either a chance of loss or a chance of profit. (a business operation) Insurable Risks – Insurance provides protection again pure risk.
Property Insurance Examples of Losses Theft of tools or equipment from a jobsite Break-in at office or yard Damage by wind or hail to owned property Vandalism of a construction site Fire Damage by lightning Flood or earthquake
Third Party Risks Some Examples of Insurance Coverage Available: Commercial General Liability Insurance Umbrella or Excess Liability Insurance Automobile Insurance (Section A- Third Party Liability) Pollution Liability Errors & Omissions Liability Directors & Officers Insurance Liability Insurance Responds to cases arising from the civil justice system which impose responsibility on all citizens. Liability Insurance provides compensation from wrongs by transfer of funds from one party to another.
Liability Insurance Examples of Losses Injury to Members of the Public – e.g. a tool falls from a construction site and hits a passerby. Injury to Employees of Other Contractors – e.g. a consultant trips on an extension cord. If they are not covered by workers compensation, then you would be liable for the loss. Damage to the Property of Others – e.g. damage to adjacent property due to a fire on your site; your equipment pulls up a utility line. Release of pollutants (e.g. hydraulic line fails on a piece of contractor equipment)
What To Watch Out For The insurance policy is the instrument that evidences the contract between the insured and the insurer. In most cases you will find five main sections to the policy. Introduction or Preamble – identifies the parties to the contract Insuring Agreements – provides details on the subject matter insured including perils insured against, exclusions and circumstances under which an insured will receive the insurance proceeds. Statutory Conditions – Printed on each policy and are governed by Government statutes. Policy Conditions – Relate to specific conditions to the particular coverage and further define the insuring agreements. Signature Clause – Policy is signed by the insurer and countersigned by a licensed agent/broker in the province.
Beware of Policy Warranties!
Policy Warranties Continued The Builders Risk Policy often contains warranty clauses in the wording. These are intended to help reduce the risk and compel safe work practices. If a warranty is breached, the insurer has the right to deny coverage in the event of a claim. Common Warranties: Tarring & Torch-On Membrane Operations Hot Works Operation Warranty Soldering Warranty Open Flame Heating Warranty Refuse Warranty Fencing Warranty Site Lighting Warranty Sub-Contractors CGL Warranty
Site Fencing Examples - Here is a Multi Family Site where there is a fence at the front of the project, but it can be easily accessed from the sides. This project would fail the Fencing Warranty.
Site Fencing Example This Entire School Site is Fenced. There is a gate that allows access during hours of construction activity and then is locked at night.
Slip and Fall Hazard
This is in an existing neighborhood. The original sidewalk was paved, but there was still some uneven ground surrounding the sidewalk and garage driveway. You can see the barricades and lighting used to warn the public of this exposure.
Use of Fall Protection It was great to see that these roofers were using fall protection equipment while working.
Use of Metal Bins for Construction Waste Here is an example of a very clean site – there was a bin for every 4 units.
Exposures to the public This construction site used a roadway as their site office and staging area. During the daytime, the drivers would probably avoid this risk, but on a dark night a driver unfamiliar to the area could easily run into the site.
Proximity to Other Buildings Insurers are always conscious of the quick spread of fire. Multi-Family sites such as this are at risk of losing more than one structure in the event of a fire. It is important to ensure easy access of emergency vehicles to the site and to keep the site clear of debris. As a side note – this site has a fence at the front, but is wide open on all other sides, making it an easy target for arson, vandalism, or injuries to the public who just want to take a look.
Pollution Liability This drain was completely clogged with mud, rocks and other debris. The erosion protection has long failed. If you are responsible for ensuring the protection of the environment from runoff, then set aside some time to inspect your erosion control protection to make sure it is still working for you.
Hidden Costs of Claims Delays in completing the project May be unable to replace specialized equipment in a timely manner Added construction and overhead costs Increased administration requirements Missed opportunities Injury to valuable employees Strained relationships with owners Higher insurance costs Limited insurance options
What can be done to prevent losses? Follow your Safety Program and reinforce it at every opportunity. Strong supervision skills. Use qualified sub-contractors who will follow your safety program guidelines. Protect the public from work site risks. Follow proper procedures for all excavation operations. Hazardous Operations - ensure proper procedures are being followed. Have your sub-contractors provided proof of insurance? Use signage, fencing, and security to prevent trespassing. This is especially important when there is a potential for children to come onto the site. Adequate barricades and warning lights to protect excavations, road construction operations, working machinery and other hazards. These should not be removed until the hazard is completely eliminated
What you can do to keep your insurance budget in check Practice Loss Prevention Commit to your Safety Program Keep your job site clean Monitor driving habits of employees & set guidelines for what is acceptable Review construction practices and implement best practices procedures Review your risk retention appetite and self insure for losses within your comfort zone Work with insurance professionals who understand your business The difference between an excellent risk / a good risk / or a poor risk can mean as much as 30% variation in your insurance costs. Where would you like to spend your money?
The Goal You are all committed to creating wonderful communities where people can live and enjoy their lives. You are doing a great job and keep on getting better at what you do! Thank you for your time. Ann Donald