Welcome to Risky Business commercial insurance with Butler Byers. This is Paul Martin, your host and business commentator on CKOM, and joining me today, as always, Colin Rooke, commercial risk reduction specialist with Butler Byers. And Colin, I’m sure people who listen to this show on an ongoing basis, they’re probably about to say, “Oh, those two guys are going to talk cyber again.” Well, we’re going to trick them. We’re not talking cyber today.

We’re going to talk about something that no one has talked about for the last two years, that’s COVID. And you think, well, COVID is a health thing. It’s a political thing. It’s a public safety thing. But I guess it’s also an insurance thing, isn’t it? And this convoy thing brought something right back into focus for us and it was kind of interesting, because maybe a year ago, 18 months ago, we were talking about business interruption insurance, and when my business got shut down because of public health restrictions and stuff, insurance didn’t kick in. Now, if you were in Ottawa or you were down at Coutts, Alberta, or you were at a border crossing in Windsor or something, there’s a good chance, especially in Ottawa, that your business got closed down for a while. I mean, that has also raised its head hasn’t it? It has put that question of business interruption into the minds of the industry again.

Yeah, it’s really funny. If you said, “What are the odds that in over a two-year span, there’d be two major nationwide stories that both would have business interruptions?” So insurance in the forefront, as major exclusions impacting those businesses, I don’t know if this has ever happened before or we’ll see it again, I just never thought that, yet again, a giant gap in business interruption wording, or at least we’d be in a position where you have clients that would expect to receive something that could be told sort of twice in an 18 to 24 month period. That although you feel that there should be coverage, unfortunately, in the wordings, there are exclusions that are very, very relevant to the situation.

Well, who would have guessed as a business owner, if you were in downtown Ottawa, for example, or near Parliament Hill and you think, “I kind of got choice location here because I’m right in the center of everything,” and that you end up with your business being closed by officialdom, basically police cornering off your area, you can’t get in or out, can’t open, there’s no customers can come in and there you are, you did nothing wrong and all of a sudden your business is closed and it’s by fiat from some authority.

Yeah. And even further to that, and we saw this with COVID, what if you close for the safety of yourself and your employees and your customers? So, just like when the pandemic first started, even prior to any sort of information or forced closures, you had businesses saying, “We want to close our door for this because of fear of the unknown,” and then you take this freedom convoy and they’re parked out front and there’s a lot of people, there’s a lot of upset people, there’s concern as to, is this going to continue to escalate? And you say, “I’m going to close my doors and I can’t possibly operate.” Well, you could be in a position where, again, two times in a 24 month period, you would call your broker and say, “I want to put in a business interruption claim,” and unfortunately, there’s nothing for you.

Now, you skip ahead and you say, “Okay, I understood that I voluntarily closed, there’s no damage to my premises, I don’t really like the fact that there’s a pandemic exclusion, but, due to order of civil authority, I had to close. No different than COVID, I was told for the safety of my business, there’s too many protestors, I got to shut down.” Yet again, you’re finding yourself in a position where your policy, I’ll say, in most cases, will not pay because there’s no direct damage as a result. You weren’t forced to close because of damage nearby to your building surrounding area. It has to do with one, the pandemic, and two, the threat of, yes, there’s a concern for safety, but technically, if they didn’t break in, if they haven’t damaged your shop as a result, you’re probably not going to see anything for it. And so, it’s just this unique situation where yet again, you have business owners saying, “My policy should be kicking in to help me,” and yet again, we’re saying, “No, it probably won’t.”

So is there thing that business owners should be aware of, or can be doing, or how are brokers coming at this and how are we responding to these unforeseen and these unexpected kinds of developments?

It’s a good question. And I think the point of this conversation is that it serves as a good wake-up call to the industry itself. The insurance carriers to say, “Okay, well, maybe we have to revisit some very old wordings,” and I think we’ll see that because the more exclusions we see, the more challenges, there’s going to be markets out there that will say, “Okay, as a competitive advantage, I’m going to amend my wording just enough.” And it’s timely, it’s topical with brokers, for one, and our customers to say, “Well, if you’re going to relax your position on this area of business interruption,” I’m guessing that we’re going to get a lot of brokers out there recommending our clients move to this market. And so I think these two scenarios, one, just the pandemic itself, and then now, the Freedom Convoy, I think it’s just a big eye opener that just because it’s always been worded that way, maybe now is the time to revisit and change accordingly.

There are a couple of other big picture trends going on here that I just wonder, Colin, if they’re coloring them too. I mean, I look at Saskatchewan and as a business commentator, I’m just looking at the number of people that are seasoned senior people in our business community who are retiring. Or we’re seeing lots and lots of organizations going through intergenerational transitions at the leadership level. And I’m guessing the insurance industry is no different. And then we have this other thing called the Great Resignation that’s floating around out there about how people are long-time career people are just rethinking their jobs and what they want to do with their lives and they’re just up-and-quitting, basically. Is the insurance industry feeling the same effects, and, if so, does that mean what we were talking about previously about wordings needing to be changed and all that, the old seasoned veterans and the really experienced people may not be around to have some input on that?

Yeah. It’s a big problem in our industry. COVID fatigue is very, very real, but on top of that, we are in the sort of third year of the worst hard market that we’ve had in a very long time. And so, in addition to our customers’ premiums increasing with no rhyme or reason, I mean, there is a rhyme or reason, but it often doesn’t feel like there is. You’ve got overworked senior underwriters that were maybe thinking of calling it a career, however, they’ve got a great routine going. They like the work environment. They like their book of business. They like their clients. And now every single renewal is a fight. Every client is upset. Every broker wants to argue with you.

You’ve got pricing increases that really you can’t explain. You’ve got unhappy customers, unhappy brokers. It’s a lot of extra work. And now you’re displaced. You’re working from home. The insurance company you worked for maybe wasn’t set up for this or slow to adapt. And it’s just easier to say, “You know what, I was thinking of calling it a career anyway, I think I’m just going to do that.” And so without knowing the specific numbers, but due to the industry articles that we’re seeing and just working in the business and learning that this person has resigned, this person has retired, we’re seeing a lot of it. It is a big deal. And from our purposes, we’ve got all this, we’ve got young, new junior underwriters that are expected in a very short time to perform at a senior level. And again, they’re overworked too, but they’re also not seasoned enough, or haven’t been around long enough to make a lot of these calls, for example, around credits or discounting or even class of business. So I think we’re seeing an unfair share of that in this industry. And the result of that is it’s so important to have your story straight. In fact, now, more than ever, when you’re dealing with junior inexperienced staff.

Right, Colin, that’s a really important topic, and I want to pick it up, but we’ve got to take a little break. So we’re going to take a commercial break, be back after this, you’re listening to Risky Business Commercial Insurance with Butler Buyers. Back in a minute.

Welcome back to Risky Business Commercial Insurance with Butler Buyers. Paul Martin here, and joining me is Colin Rooke, commercial risk reduction specialist with Butler Buyers. Colin, just before the break, we were talking about one of these, kind of, waves that seems to be going over society. The so-called Great Resignation that’s the sort of volatility of the labor market, and especially, seasoned people who are saying, “I’m rethinking my career in the wake of COVID and all of the disruptions that came with that,” and you made the comment that the insurance industry is getting more than its fair share of that, and put a little flag up that you’d better become your own best advocate in all of this, because the industry, you’re liable to be sitting across the table from someone who’s somewhat greener or more junior than the seasoned person you would’ve been sitting across the table from even a year ago.

Yeah, absolutely. And if you don’t have the experience, a lot of your authority will be stripped or not available. And so you’re relying on reaching out to upper management, underwriting managers, and they’re overworked themselves. And so if it’s a proper risk managed account, and you’re working with Butler Buyers Insurance on a risk management plan, or let’s say you have not been and you’re just using the traditional approach, if you’re dealing with someone that doesn’t know what they can or cannot do, or what credits could be there or aren’t there, or what kind of leeway they have, it’s our job to make sure, now more than ever, they are armed with the right story to tell.

It used to be, you could talk to the senior underwriter directly and say, “This is where they were, this is where they are now, and this is where they’re going, and this is how we’re going to get there.” And you would explain the risk and they would understand, and they would know, “Based on my book of 40 similar types of businesses in that same category, you’re right. You are ahead of the curve. And here’s what I’m going to do to get this account.” Now, if you’re forced to reach out to a less-experienced underwriter who has been working from home since day one, training has been challenging, it’s all been remote and they’re not sure what they can or can’t do, now you’re relying, there’s another hand in the pot. You’re relying on that underwriter now to sell that story to a senior underwriter or an underwriting manager.

And so the point being is it’s going to take more work than it ever has to convince that market that this is a risk worth fighting for, a risk that you want, because the person on the other end of the phone or the email in this case, doesn’t have the experience to know what’s what. And so any information that you can arm that individual with is going to help long-term. So I would say now it’s more important than ever to focus on the story that’s being told about your company, especially when dealing with less experienced staff in the insurance industry.

Basically, you’re saying you have to be much more proactive as a business owner in terms of becoming your own advocate effectively, and if you don’t do it, there’s no one in the industry who’s got the depth of experience to be able to sort you out from your peers. So, if you’re going to get the best rate and the best coverage, it’s up to you to tell the story that, “I am better and here’s why, than all my peers,” and that’s really what you’ve been advocating since we began this program is the step by step plan, build it up, tell the story, be able to differentiate yourself from your peers, and that’s how you will get better coverage, or maybe in these markets, coverage at all.

Yeah, exactly. So if you’re talking with someone that’s experienced, you could say, “Okay, I’ve got a concrete building I want to insure in Eston, Saskatchewan.” And you could be talking to someone that’s had 40 years in the industry saying, “Something about the ground, or I don’t know where, in all my years I’ve never had a fire. Yeah, there’s a lot of wind, but for whatever reason, those buildings are built solid. I know them well, I’m going to take a chance on this building. I’ve been there before and I’m comfortable with it.” But now if you’re dealing with someone that’s junior and they say, “Not only have I never heard of Eston, Saskatchewan, I don’t have any familiarity with the region and certainly not any building or structures in that area.”

It’s our job to convince them that it’s a great risk because they’re not coming from a place of knowing. It’s one thing if they already have a pretty good idea, it’s another when they don’t really at all. And so the selling of the risk of the account is so much more important. And now, the example I just gave would even assume that maybe the underwriter is from Saskatchewan, but what if you’re dealing with a junior underwriter in Toronto that has never been to the prairies, let alone the specific location that you’re dealing with? And so the story, the risk management plan, what gets this client from good to great, is vital because you’re now going to rely, potentially, on that underwriter to upsell this to someone else that you may or may not even have an opportunity to speak with.

An interesting conundrum, but at the end of the day, it’s really about your broker. If you’re buying insurance, it has to be more than someone who just takes quotes for you.

Yeah, I guess what I’m trying to say is that it’s really easy to put no effort into the pricing of an account. There’s computer programs that tell you what the rates should be, and if that’s all you’re looking for, then any underwriter can take your submission and tell you what the program says the price for the risk should be. So, if you are average at best and certainly below average, then don’t waste your time. Don’t put the work in and accept the pricing because that’s what it’s designed to do. But if you consider yourself best-in-class or certainly working to get there, and you say, “I put a lot of work in, we’re a great company. I feel that we’re deserving of credits and discounts,” then you have to pay particular attention to what’s being said about your company, and the insurance application is not going to do it for you.

Colin, we’ve run out of time, as always, we just seem to blast through these things, and I think the point we reinforce here is you and your team are available for people who are listening to this and think, “Yeah, I am above average and I want to advocate for myself and protect my own interests.” You’ll be more than willing to have a free consultation with them.

Yeah, absolutely.

You’ve been listening to Colin Rooke, commercial risk reduction specialist with Butler Byers, commercial insurance. I’m Paul Martin. Thanks for joining us. This is Risky Business. Talk to you next time.

Welcome to Risky Business Commercial Insurance with Butler Byers. This is Paul Martin, your host, and the business commentator on CKOM. And joining me today, Colin Rooke, Commercial Risk Reduction Specialist with Butler Byers. And Colin, I know we’re starting to talk about the next phase of COVID. And so that really caused me to reflect on that and think of what are the aftershocks, if you can put it that way, of COVID for business, and is there insurance implications and all of that sort of stuff.

Now, one of the things that emerged from the whole two years or so that we’ve been in COVID was just the way we handle going to work. I mean, initially we were shutting down offices completely. Then we started to, midway through, open up a little bit, and now we’re just trying to figure out what’s going to be permanent and what was temporary. You have some thoughts on that? I mean, has the insurance industry looked at this and said, “Well, here’s some things you need to know, and these are the implications of work from home versus go back to work and the old traditional way versus the hybrid model versus versus versus.” And what are you guys hearing and what are you seeing? What’s the industry coming back with?

I mean, our risk management team has spent a lot of time on this topic, because you’re right. I mean, initially you were forced to go home. It’s not something that… Organizations didn’t say, “I’m going to pivot and adapt and send people home because that’s the way the future… your hands were tied. And so you had to work through that and there was a lot of scrambling going on and we did several shows on the pros and cons and what policies and procedures need to be in place, and how to properly structure your IT. But now, we’re in this hopefully coming out of some restrictions and there’s a lot more people returning to work.

So there’s an interesting survey that was circulated and 58% of all workers responded saying they wanted a fully remote position. And in fact, only 3% said they want to be fully in person, that replied to the survey. And so that’s not necessarily the best thing for the business, depending on what industry you’re in. And a great compromise would be this hybrid model. There’s some ability to work from home, but there’s also requirements to be at the office. But it only works when done well. And there’s a lot of pitfalls you’ll want to avoid. It’s one thing to say, “Great, fully flexible.” Well, you need to define that. Who does that apply to?

Anyway, so we’ve got about five different things you’ll want to think about so you can avoid making big mistakes in the adoption of the hybrid model and what work will look like into the future.

So you’ve identified the five things that management needs to consider before embracing hybrid as a permanent solution?

Yeah. And then the concern is that the hybrid or the work at home model is better for the employee than the employer. Now, it can work for both and that’s why these are important, but the number one risk to management would be inadequate policies. We’re full of policies. I love every time we get it, we work in a new… and I can’t wait to get it out. But it’s really important to make sure you define, in writing, what hybrid work would look like. For example, who is eligible? So now, it’s outlined, it’s not just subjective. Yeah, you can work from home. We need this position in the office. You have a policy that says who is eligible for a hybrid work environment.

And then from there you want to say, and this is really important, how many days is that employee expected to work in person? Big part of any hybrid work environment. And then probably most important, and I feel like I keep saying this but, how many core hours must that employee work? So when you talk about hybrid or work at home, the idea of flexibility. Maybe you’re an early riser or a night owl, and you can get your work done at times that work better for you and your family. But you need to define, again, what core hours must this person or this position… you need to be available for these times. So just having that conversation and getting it in writing, again, back to what’s going to work best for the business.

And on top of that, back to the policies and procedures, what technology is available and also what is required. So available means, what is the employer going to give you, but what do you need to have as an example. So you can’t necessarily log into a zoom meeting if you have inadequate internet. Now, I realize that people have addressed this problem going into the pandemic. But again, this is making sure you have a policy or procedure that says, “X employee needs a connection of a minimum of this in order to qualify for work at home.” Because you’re making sure you’re getting, in writing, what’s going to work for the employer, the business moving forward.

And then also addressing shared workspaces. So we talked about how much time is spent in the office. Maybe you had a traditional office set up and you felt like, well, that space is mine. Well, now you have to get in writing. You are going to be sharing. Maybe every office is flex. Maybe Paul, I’m sharing an office with you, but again, just make sure that you have a plan in writing for those people that qualify for hybrid work.

No, it’s interesting because as we’re putting this show together today, the first of the major banks in Toronto is bringing its people back to work. And they’re not there every day, but then they’re not all coming together. I mean, it’s staggered schedule. But as you lay this out, I mean, it just seems so logical that… but no employer’s going to have this policy in their handbook. So do you have a template available that they can look at or at least the questions they should answer and how they should define what hybrids look like?

Yeah, absolutely. And that’s really the point of this conversation to say, “Well, one, what should I be thinking about? And two, working with us on if we can share resources or go over these questions and more, and just make sure that we’re developing together that proper policies and procedures.”

So another pitfall to avoid or something that you’ll want the management or executive team to do is… So if they haven’t, and throughout the pandemic, tradition management has spent more time at the office, try doing your day to day at home for a week or two. And it’s that whole walk a mile in someone else’s shoes, but it’s easier to pick up on things that you might miss as a management group, when you’re able to say, “Well, now I’ve spent two weeks working from home or even trying the hybrid role. What should be in the policy and procedure manual, good or bad that you’re able to pick up on when you’re actually trying it up for yourself. So that’s an important thing to consider before adopting a hybrid workplace.

Yeah. You mentioned the quality of internet connections at your home and that kind of stuff. And that raises all sorts of questions about who’s supposed to pay for it. And how much is the employee responsible for. And how much is the employer, if anything. But you’d think a couple of years into it would’ve sorted this out, but even watching the national news now on television sometimes you’ll see a reporter working from home and they freeze up. So, I mean, even the big national organizations who live with this kind of stuff are still being caught behind the curve on it. So it’s not something you can just assume. And I guess what I’m coming away with here, and the thought process you’re leaving me with is, management’s got to manage in all of this. You got to take charge of this stuff or somehow this policy will get away from you and the employees will start to dictate how the office is run.

Yeah. And that’s really it. I mean, again, you could say, Colin, two years into a pandemic, I mean, this is not new stuff, no. But we’ve all been on Zoom meetings where someone’s cut in and out, or can I get my speaker work, or I’ve got to switch to my phone my laptop is on the freeze. And this is about establishing what’s going to work for the business. So yes, you could say you need internet, but that’s not definitive of what sort of bandwidth am I required to have at home. And then you can get into the conversation of, well, who should pay for that. Maybe you have a position where you require more than the minimum. But this is about going to your internet provider and saying, “Okay, what would be the minimum for this type of work, type of connection, where we’re not going to have any interruptions.

And further to that, what if half your workflow force is client facing? And again, they have a poor connection. I mean, it’s irritating. I mean, it really is. And so the point of this is to say, “Yeah, we’ve been doing this, but now take you some time to actually put pen to paper, so to speak, and say, how does the new office run?” And be specific.

And another item to make sure you cover is communication. So it’s really easy to say, “Well, we use email and there’s chats,” but which chats? And what should be an email, what should be a chat? And choose one chat so it’s chat specific, so you don’t run into a situation where there’s 15 different internal chats going on.

All right. We’ve got to take a little break, Colin. So we’ll pick this conversation up after this. You’re listening to Risky Business Commercial Insurance with Butler Byers. Paul Martin, your host. And the guest today, Colin Rooke, Commercial Risk Reduction Specialist with Butler Byers. We’ll be back after this.

Welcome back to Risky Business Commercial Insurance with Butler Byers. This is Paul Martin. And joining me is Colin Rooke, Commercial Risk Reduction Specialists with Butler Byers. Colin, we’re reflecting on the aftermath, I guess. So what happened during COVID, then what are the implications of the long lasting things? And one of the things that happened through COVID, I don’t think any of us predicted it, was how much money people spent on housing. They invested in their properties. They put a lot of money into home improvements. Maybe some people bought entirely new houses, but many did a lot of renovations and upgrades and that kind of stuff. And now in hindsight, has that had some impact on probably increased property values which likely means higher insurance premiums too?

Yeah. So home insurance premium is a hot topic across Canada and renewal premiums are on the rise. I mean, there’s no if, ends, or buts. Now, there’s certain factors, geographic location and claims, that are part of this, but the actual rating itself is not on the rise quite at the level that the public would suggest. And so anyone listening would say, “Well, that makes absolutely no sense. My insurance was up 30% this year, and two years ago, I think it was up 30% again.” It’s on the rise and people don’t like paying higher premiums for home insurance. It’s not a popular thing. But a couple things to consider is your own part in this puzzle.

Now, we can all agree that due to climate change, I mean, everyone knows someone that’s had issues with water. Whether it’s heavy rainfall, overland flooding, sewer backup, water is an issue, climate change is an issue. And that’s something to say, “Well, right.” So they’re paying out more, therefore they want to recoup the cost into the pool and therefore I pay. And yes, that’s a part of it. But what gets skipped over? And if you think about the supply chain, and it’s something that we discussed last show, is renovations.

You lock people in their homes for the better part of 18 to 24 months, and there was a lot of home improvement projects going on and a lot of people upgrading. But if you focus on renovations alone, when you add value to your house, when you finish the basement and it wasn’t previously finished, you do the addition you never thought you’d ever get to, you increase your deck size, you add the shed, and you report that, your premiums are going to go up. And it makes sense. Your home’s worth more. It’s going to cost more to insure it. But it really does get missed.

I mean, it’s probably a problem with the industry that it’s not being communicated as well, you’re part in it. But again, you get to that project, you add 50% value and then, of course, you’ve got the housing market increases across Canada, but that’s something that appears like it’s the doing of the insurance company, but really has nothing to do with them at all. It’s everything to do with the client, the customer. And so again, prior to planning these big renovations, or if you’ve already done it, I mean, $50,000 addition or renovation to my house may turn into some premiums.

We probably need to write ourselves a note as part of the deal to go ahead when we renovate is, “Memo to self. This will result in an insurance premium increase.” And then put that in your file so that you’re reminding yourself that you’ve done it. And I can’t help but think of premiums going up 30% and I’m responsible for 29 of it because I increased the value of my house. I really can’t point too many fingers, can I?

No. And they do get pointed. But again, it’s almost not all increases are a bad thing. I mean, if your property value is increasing rapidly, and you’re paying a very small, small portion as a result, it’s really not the end of the world. And yes, there has been some good old fashioned rate increases. But it’s less across the board, it’s more area specific. It’s really around high water tables, flood plains, that sort of thing, and, of course, pending claims. But again, the end user, the customer, has a lot more to play in this problem than you think.

And then another just segues into that whole construction market. So for those that have had claims, rebuilds. So back to this legacy renovation project that you didn’t get to, if you’re doing your own work you might say, “Well, I’m going to slowly renovate the basement over the next five years. I’m going to do it as cheaply as possible because I’m relatively handy.” You have a flood in that same basement and suddenly it’s urgent that it gets rebuilt exactly the specs. And insurance companies end up paying a lot more to redo that project than you ever would because now it looks like it’s on someone else’s dime, and so you want it done as quickly as possible. Well, the speed at which you complete your renovation also costs more.

So again, back to your part in that, you’re driving up your own cost of claims by this requirement to get the repairs done as soon as possible. And it’s just something that people don’t think about. What would I have done if I did it myself versus hiring a team, a restoration company, there might be 30 people working on your home, which you’ll get it back in three or four weeks.

Well, Colin, always some interesting food for thought. And you mentioned earlier in the program that we’ve had a couple of conversations in previous shows on this. And probably we should mention that we do archive these shows and they’re actually available if somebody really wanted to go back and listen to them. So if you’re interested, just go to the Butler Byers website and you can find previous episodes.

There’s about five years stored and we’re on SoundCloud as well.

All right. You’ve been listening to Colin Rooke, Commercial Risk Reduction Specialist with Butler Byers. I’m Paul Martin. This is Risky Business. Thanks for joining us. Talk to you next time.