THE ONLY SOURCE FOR PROFESSIONAL ICI ROOFING CONTRACTORS IN ONTARIO ORN 18  ONTARIO ROOFING NEWS – FALL 2018 Insurance Notes Mr. Benjamin Franklin’s time that is today bearing the brunt of liability insurance losses on behalf of the Canadian ICI roofing industry. In a paper written for North Dakota State University, Kris Ringwall states: “Regardless of the endeavour, our tendency is to be a bit sloppy at times. For the unfortunate few for whom the hands of chance all line up, disaster is the outcome.” We have said more than once that every single accident is preventable. Some will disagree with this but to us, if an accident happened arising from human work, what caused it was likely preventable. Risk management will actually help substantiate the preceding statement if you consider the risk management process: Identification – What are the risks? Assessment – What is the likelihood of the risk occurring and at what severity? Control – What can be done to reduce the impact of the risk? Monitoring – Has the situation changed? Are new risks emerging? If the ICI roofing industry practiced this simple process of risk management in a disciplined manner, it would be well on the way to reducing the number and size of annual catastrophic losses. Certainly it has dabbled with risk management, but there needs to be a broader overall commitment to risk management in your industry sector. There are many types of situations that lead to liability insurance claims against roofing contractors and many are spurious; unfortunately the often fraudulent claimant still escapes with an insurance settlement, as it is often cheaper for insurers to settle than to fight. These spurious claims aggravate us as they do you, but frankly, you’re generally better off if your insurer secures an early lower cost settlement rather than allowing the action to go to court. Fighting a principle can be very expensive indeed and may contribute to higher insurance costs. Major fires from roofing operations are actually quite infrequent; however, their potential to cause catastrophic loss including loss to property, loss of use and loss of life, places them at the foremost concern for insurance underwriters. It has already been proven that one single roofing fire can cause damage well exceeding $20,000,000 (in fact multiples of this), and loss of life is always a possibility. There are other causes of loss in roofing operations, including water damage, which is the most frequent and can sometimes also be horrendously expensive. For example, if water enters a transit centre control room, the loss of use claim may bankrupt a roofing contractor that carries only $5,000,000 in liability insurance limits. We are using fire in this article as it is the most important, most dangerous and has the greatest catastrophic loss potential. Nonetheless, we repeat that risk management – addressing every risk – needs to become a daily discipline in every single roofing contractor’s operations. We propose that risk management should be woven into the corporate culture of an ICI roofing contractor. Between 2000 and 2004, the insurance marketplace was in what is referred to as a “hard” insurance cycle. Insurers withdrew liability limit capacity and withdrew from business classes. High-risk industries including roofing were singled out and the insurance marketplace for roofing contractors in Canada was reduced to two main insurers offering a restrictive insurance product at a very high price. In March 2003, our Chairman Simon Fenn and many representatives of ICI roofing associations across Canada personally appealed to the Canadian insurance industry members of the Insurance Bureau of Canada to remain in the ICI roofing liability insurance marketplace, and few listened. Even after submitting letters secured from construction association leaders requesting support for the ICI roofing industry, few listened. As the insurance marketplace softened around 2005, more insurers and managing agencies (licensees of insurers) decided to enter the marketplace again to gain market share, this time predominantly led by Lloyd’s of London syndicates. Today, even some Lloyd’s of London syndicates are pulling away entirely from Canadian ICI roofing contractors, and there are virtually no domestic Canadian licensed insurers offering insurance coverage to ICI roofers. This should be alarming to you. In closing, we offer some questions for you to consider: •  Do you wish to wait for Lloyd’s of London to withdraw entirely so self- insurance becomes the only option available? •  Is your industry able to self-sustain one or more $30MM fires in the first year of self-insuring? •  Will owners accept the financial security of ICI roofing contractors’ self- insurance over the financial security of a financially rated insurance entity? •  Lastly, as an industry are you prepared to take risk management more seriously and no longer assume that the insurance industry will always be available to you? After all, “an ounce of prevention is worth a pound of cure.” Fenn & Fenn Insurance Practice Inc. is a construction speciality insurance brokerage headquartered in Newmarket, Ontario. It is licensed to do business in most provinces across Canada. Fenn & Fenn Insurance Practice Inc. has managed the OIRCA Liability Insurance Programme since its inception in 2005 and offers bespoke coverage with high limits of liability. For a quotation, visit our website at www.fenninsurance.com/ roofing-contractors-liability- survey/, or call us at 1-866-269-8799. Simon Fenn is the Chairman of Fenn & Fenn Insurance Practice Inc. In January 2019 he will surpass 40 years’ insurance experience, mostly working on behalf of the construction sector and the roofing sector as an insurance broker. Danielle Fenn is President of Fenn & Fenn Insurance Practice Inc., with over 30 years’ insurance experience. The team at Fenn & Fenn Insurance Practice Inc. consists of licensed brokers qualified to represent those in the roofing industry. Some of the material from this article was taken from Wikipedia and an article posted publicly by Kris Ringwall of North Dakota State University. Every single accident is preventable. Some will disagree with this but to us, if an accident happened arising from human work, what caused it was likely preventable.