Respect the Claim: A Panel Discussion on Real Life Claims CLM001 Speakers: • Paul Boatman Director of Risk Management Prometheus Real Estate Group, Inc. • Scott Ritto Vice President, Risk Management Kilroy Realty Corporation • John Shaw Sr. Vice President Marsh • Jeff Taxier Education & Training Manager American Technologies, Inc.
Learning Objectives At the end of this session, you will be able to: • Explain the steps to take to prepare for both common and unexpected claims • Describe the key players to have in place prior to a claim • Review insurance policies to ensure the most appropriate coverages for the risks you may face with actual claims
Are You Prepared? If disaster strikes your operation, do you know what to do next? ( 3 ) ( 3 )
What If … A pipe has burst in A hurricane blows A fire strikes your facility causing your office building the roof off of your extensive and the entire first corporate smoke damages that floor is flooded. headquarters. threatens to cut your production rate for the upcoming weeks. ( 4 )
Contingency Planning is Critical One of the BEST WAYS to survive and recover from a natural or man- made disaster is to create a contingency plan BEFORE disaster strikes. Your plan should include: Risk assessment Continuity planning Communication plans Provisions for back-up utilities, alternative communication sources and medical supplies Equipment and documentation inventory Identification of equipment staging sites Identification of command center location and set-up Specific job assignments and contact information Identify emergency resources and key vendors to assist in recovery ( 5 )
Keys to a Successful Contingency Plan PRIORITIZE establish key objectives COMMUNICATE to employees, tenants, partners PRACTICE may not make perfect but is vital PARTICIPATE in community disaster preparedness events UTILIZE a variety of media UPDATE regularly so plan is not out of date
Learn, Learn, Learn…
Claim Preparation Review your contingency plans and identify specific business needs Take a good look at your insurance policies to verify they meet your needs Interview prospective vendors for key responsibilities – these may include restoration companies, engineers, attorneys, forensic accountants etc. Develop Agreements that satisfy your needs and also meet with the insurance carrier’s requirements where appropriate Communicate agreement(s) to all necessary personnel
Panel Discussion – Scenario 1 • Discussion led by Scott Ritto, Vice President Risk Management for Kilroy Realty Corporation • Fire loss to retail mall involving multiple tenants
Street View of Fire
Aerial View of Fire
Interior of Mall - Aftermath
Emergency Response • Assess the situation – what is going on? • Safety first – evacuation including parking areas • Communication and coordination • Command and control – internal/external • Manage emotions • Account for personnel
Crisis Management/Communication • Is this a local, regional or national crisis? • Crisis management team – activate? • Who needs to respond? • Communicate with senior leadership • Communicate with insurance broker and carrier • Communicate with media
Business Recovery • Alternate operations office? • What is the timeframe? • Identification of critical resources • Communicating with tenants and customers • Prioritizing the recovery – What can be accomplished and when? • Goal - returning to business as usual
Claim Realities • Pre-planning and exercising plans are key • Expect the unexpected – What if? • Individual mall BC plans very important • National vendor agreements • Power supplies and lighting • Updated contact lists – soft and hard copies
Panel Discussion – Scenario 2 • Discussion led by Paul Boatman, Director of Risk Management, Prometheus Real Estate Group, Inc. • Water loss to office building with contract and claim issues
Good Morning!
Filing and Storage Area
Typical Work Area
Just The Facts… • Drinking water filter installed in kitchen area of company home office for appx. $2,000 • Overnight the filter coupling valve fell off causing flooding to thousands of square feet of office space by the morning
Origin and Cause of Loss
Claim Damages • Loss of productivity • Many employees had to be relocated for up to three months • Total damages around $450,000 • No subrogation due to “hold harmless” wording in plumber contract that installed filter
Claim Issues • Claim adjuster left halfway through claim • Company approved restoration contractor submitted invoice directly to company and company paid it prior to insurance company review • Lost productivity
Claim Resolution • Coverage resolved in favor of named insured • Restoration company invoice reduced by 50% after insurance adjuster review and restoration company reimbursed insured the overpayment! • Clean drinking water comes with a cost
Claim Realities • Internal contract review and approval process updated • Relationships with carrier and broker are key to resolving issues • Approved vendors should be vetted by company and carrier
Panel Discussion – Insurance • Discussion led by John Shaw, Sr. Vice President, Marsh • Prepare for your claims before they happen
Variety of Risks – Partner with Broker • Standard risks such as fire, water, vandalism • Catastrophe risks such as hurricanes, earthquakes and floods • Layers and deductibles • Business interruption
Common Questions We Get • Sublimits – what are those and how do they limit my recovery? • Can you explain my variety of deductibles? • What’s really covered in business interruption? • How do I account for extra expenses to keep my business running?
More Questions We Get • How is the claim handled if we have multiple policies that may apply? • Can we select our own o Adjuster o Expert o Engineer o Accountant o Restoration company?
Some Suggestions • Develop claims teams for different risks and locations • Hard and soft copies of contingency plans • Contract review process • Stay current on evolving risks • Protect company data
Questions and Answers
Presenter Contact Information • Paul Boatman, Director of Risk Management, Prometheus Real Estate Group, Inc. pboatman@prometheusreg.com; 650-931-3459 • Scott Ritto, Vice President, Risk Management, Kilroy Realty Corporation; sritto@kilroyrealty.com; 310-481-8419 • John E. Shaw, Sr. Vice President, Marsh; john.e.shaw@marsh.com; 213-346-5218; Ca. license #0437153 • Jeff Taxier, Education and Training Manager, American Technologies, Inc. jeff.taxier@ATIrestoration.com; 520-203-5004
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