225 North Road Coquitlam, BC V3K 3V7 604.936.5643 314 Totom Ave. Kelowna, BC V1X 5C2 250.765.8018 CANADA’S HOME FOR ROOFING PRODUCTS 12510 82 Ave. Surrey, BC V3W 3E8 604.572.8088 28 l ROOFINGBC l FALL 2018 FEATURE terms for contractors with a clean claims history and best-in-class safety standards.” Roofing contractors should also review their insurance policy terms carefully with their broker. It’s regular practice right now for commercial general liability policies to contain warranty clauses which specifically describe safety protocols that a contractor must follow. If companies don’t follow these warranty clauses exactly as written, it can result in an insurer denying to pay a claim. Alsop concludes, “In terms of liability insurance, it’s my opinion that roofing contractors simply aren’t carrying enough. I still see plenty of contractors with limits of two or five million dollars, but when comparing to their peers they should really consider carrying 10, 15 or 20 million – depending on their operations. There are many examples of extremely punitive lawsuits awarded to companies adversely affected by a roofing contractor’s unpre- dictable accident. These higher limits of liability insurance are harder to obtain right now compared to the previous years, but it’s well worth pursuing.” STEPS IN RISK ANALYSIS Risk analysis is often a complex process but for most, worthwhile. Some of the typical steps include: 1. Identify. The first step is to identify existing and potential threats to the business – often not apparent. Some of the more common include: · Human (meaning illness, death, injury or loss of a key individual). ·  Operational (meaning disruption to supplies and operations, loss of access to essential assets, or failures in distribution). ·  Reputation (meaning loss of customer or employee confidence or damage to market reputation). ·  Procedural (meaning failures of accountability, internal systems or controls or fraud). ·  Structural (meaning dangerous chemicals, poor lighting, falling boxes, or any situation where staff, products or technology can be harmed). 2. Estimate. Once a risk has been identified, businesses need to calculate the likelihood of these threats being realized and their possible impact. Some of the more common steps include: ·  Make the best estimate of the probability of the event occurring and then multiply this by the amount it will cost to set things right if it happens (risk value = probability of event x cost of event). ·  Gather as much information as possible to accurately estimate the proba- bility of the event occurring and be realistic about its associated costs. 3. Assess. Look for cost-effective approaches. It’s rarely sensible to spend more on eliminating a risk than the cost of the event if it occurs. It may be better to accept the risk to use excessive resources to eliminate it. In some cases, you may want to avoid the risk altogether. This could mean not getting involved in a business venture, passing on a project or skipping a high-risk activity. 4. Accept. Your last option is to accept the risk – usually best when there’s nothing you can do to prevent or mitigate it or when the potential loss is less than the cost of insuring against the risk. Or also when the potential gain is worth accepting the risk.