Working With the Insurance Industry. Linda Stoppacher, CPP, CSP, ARM, ALCM Acadia Insurance Company

Transcription

1 Working With the Insurance Industry Linda Stoppacher, CPP, CSP, ARM, ALCM Acadia Insurance Company

2 Parties During Design Phase Building Owner Code Officials Fire Department Architects and Design Engineers It is understood that lives and safety of occupants and responders is of ultimate importance in this presentation. We are, however, going to discuss financial issues

3 How Insurance Works Business Owner Needs Insurance Agent or Broker Helps identify needs and priorities, services account Carriers Carrier A Carrier B Carrier C etc. Absorbs the loss

4 Property Casualty Coverage Types Property Business Interruption General Liability Product Liability Custom or Excess Lines Commercial Auto Umbrella and Excess Worker s Compensation Boiler and Machinery Inland Marine

5 The Insurance Carrier Underwriter Loss Control Claims Loss Control Visits Prospective Customer Evaluates risks and controls, condition, protection, values, natural hazards Provides Opinion to Underwriter May Make Recommendations to Improve (or even be able to insure) Risk. May Have Regular Service Relationship with Customer

6 Rates Insurance Services Organization Verisk HPR Highly Protected Risk Generally in Cents per Thousand Dollars of Value Reinsurance

7 Main Factors in Property Rates Construction Occupancy Public Protection Private Protection COPe

8 Construction Consider how it will behave in a fire. Consider firefighting operation, whether they are likely to enter or not. Consider whether it can be salvaged, and if it is likely to be a complete or partial loss.

9 Occupancy What is going on inside of the building? What are its relative risks to fire? Will it impact plans of first responders? Combustible load?

10 Public Protection What is a Public Protection Class? Availability of water Ease and speed with which water can be accessed Capability, distance, and equipment of Fire Department Needed Fire Flow Can have a class 9 building in a Class 4 town

11 Private Protection Any systems inside of the building Sprinklers Gaseous agents Foam Alarm transmission Extent of protection Testing and reliability

12 Exposure Generally what the building may be exposed to from the exterior Rising water A neighbor with significantly more hazardous operation Wildfire Usually smallest factor of COPE Pepcon Disaster Example

13 Rate Examples A $2,000,000 office building made of masonry non combustible construction. Completely protected by adequately designed and supplied sprinkler system, in a Public Protection Class 2. Rate may be $.10 per $1,000 in value. Hypothetical Premium?

14 Rate Examples A $2,000,000 restaurant building which is wood frame and not sprinklered. Location is a Public Protection Class 9 area. Rate could be $.35-$.50 per $1,000 in value Hypothetical Premium could be?

15 Compare Rate over Time This will be a graph, waiting for one piece of info from an actuary

16 Private Protection Not always about rate. My determine insurability.

17 Major Loss Sources Water Damage Fire Wind Damage Catastrophe

18 Loss Control Visits a Risk to learn about operation Evaluate Hazards Storage/warehousing, Flammable liquid use and storage, Machinery, Wood Dusts, Housekeeping, Electroplating, Quenching, Commercial Cooking Evaluate/confirm construction, condition and appraisal value Evaluate private protection Adequacy of systems, maintenance, extent of protection Evaluate public protection and services Natural hazards

19 Ideal Vs. Reality

20 Items needed from survey Ideally Hydraulically designed Designed for that occupancy Alarms to a central station Prefire planning with Fire Department which is close by Fire pump is exercised All testing documentation is in place Waterflow test is available Code officials involved at time of design Reality many days Scheduled system or no placard Fifth occupant of 100 year old building Isn t the water gong enough? Fire department several miles away, unfamiliar with occupancy Fire pump touched once per year by contractor No proof of testing Having to estimate waterflow Inappropriate system features Age Lack of code enforcement in area

21 What to do? Sketch and calculate system Find water info from town, or estimate from 2 drain Make recommendations Testing Exercise/test pump Address age issues Think about holistic loss scenario Provide best analysis to underwriter and, if necessary, reinsurer

22 Situations where you may work with an insurer Client is building a new structure or addition May work with FPE if no code official Pay provide and discuss specs for UNDERWRITING purposes May want to know about materials or brands being used Interest in Code used in design

23 You may work with an insurer when Client wants to make improvements to Protection for better insurance rate Insurer may provide minimum requirements for rate reduction May provide approval to underwriter that design meets internal (and external) guidelines May have to provide documentation to a reinsurer

24 May work with an insurer when There has been a loss impacting the fire protection system Conveying to our claims unit the need for additional expenses Our need to understand when the system will be operational once again How to prevent a similar loss in the future

25 May encounter an insurer. During a fire pump test Like to witness when possible Discuss results with contractor Graph and compare to previous years Discuss any need to further explore a performance issue and what the next step is Discuss exercise schedule

26 May Help an Insurer. What is this? Would you interpret this the same way I am?

27 How you can help a customer! If this is not present, or plans are not on site, ISO can dock your customer in its evaluation, resulting in a higher base rate.

28 An Insurer may help you. Does your company recognize this standard? This is outside the scope of NFPA, therefore would you accept this? Is this material or technology acceptable to you? CPVC CLT Insulated Sandwich Panels

29 Insurance Loss Control as a Career Graying Industry Traditionally hire people with engineering or highly technical backgrounds More colleges are offering Insurance and Risk Management Programs Use a variety of codes and standards- DOT, NFPA, FM, OSHA, CPSC, ASHRAE, etc. Each day is different Can specialize in various lines or industries Involved with people

30 What are the Main Factors in Property Insurance rate A) Construction, Age, Protection, and Neighborhood B) Construction, Occupancy, Private Protection, Public Protection and Exposure C) How long a company has been in business and whether the sprinkler system is wet or dry D) Industry trends

31 What is HPR and how is it used? A) Highest Premium Ratio, it is used to get the most property rate on a risk. B) Highly Protected Rate, it allows an insurer to keep rates high C) Highly Protected Risk, it allows an insurer who is filed to do this to substantially lower a premium rate for an exceptional risk with superior protection systems and features D) Hourly Premium Regulation, it determines rates for a manufacturer based on hours spent in hazardous activities.

32 In the absence of hydraulic information, what might an insurer do? A)Guess on the sprinkler system s adequacy B)Refuse to provide coverage to a company C)Charge a higher rate D)Sketch the system and run a hydraulic analysis