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Managing Risky Business: Q2/2017

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In this issue of Managing Risky Business, read about:

  • Introducing Our New Claims Coordinator: Sein Jung comes to us with more than five years experience and will be overseeing all claims activity for the group insurance program.
  • Claims Update: Claims to the program help us understand risk in the sector and how we can reduce its cost to us. Read about what we’ve seen over the past few months and learn about why we’re now offering a premium discount for providers with low-temperature stovetop elements.
  • Guest Column: Residential Tenants Want of Repair and One Year Limitations In a recent decision, an Ontario Superior Court ruled that the estate of a deceased tenant had 1 year to sue his landlord as a result of a personal injury that occurred on the property. Read about the details of this case and why it’s significant to housing providers.
  • Renewals Are Around the Corner! An update on where we are in the process and what we need you to do so we can get the most complete coverage at the lowest rate for the group. Also, reminders on the tools and discounts we offer to drive down your cost of risk.
  • Tenant Insurance In Action: You’ve heard us talk endlessly about the benefits of tenant insurance for years. This time read about how much money its paid out to providers and tenants to cover property damage and loss and the types of claims we’ve seen.
  • Getting Educated on Directors and Officers RiskDirectors and Officers voluntarily commit their time to provide oversight to operations – but can be held personally responsible for liability associated with the duties and actions of the corporation. Learn about our workshop and training tools which help providers mitigate and reduce D&O risk.
  • Recent Insurance Events in the News: Media coverage on incidents at buildings in our program.

 


Introducing our New Claims Coordinator!

In late April, we welcomed Sein Jung to our team to serve as our new Claims Coordinator. Sein is responsible for overseeing all claims activity for the HSC Group program.

She comes to HSC with over 5 years experience in managing claims – having worked with personal property, commercial and disability income replacement claims for a variety of organizations.

Sein has served as a voluntary Auxiliary Constable for the Toronto Police Service. She also speaks fluent Korean. She holds a honours degree in Criminology and History from the University of Toronto and is in the process of completing her Chartered Insurance Professional (CIP) designation.

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Claims Update

Property Claims

The bulk of the property claims we’ve seen since January have been due to various types of water and fire incidents. The leading causes of water claims are burst pipes and overflowing sinks and toilets, with the remainder of the claims divided between heavy rain, mould, leaking roofs and appliance malfunctions. Comprising of more than 20% of the total property claims in the period, kitchen/cooking fires remain the overwhelming cause of fires in our buildings, followed by careless smoking, arson and various other causes making up the rest of the claims.

If you have submitted a property claim and would like to know the status, contact our new Claims Coordinator Sein Jung.

Liability Claims

Given the focus of our program, the liability claim volume is significantly less. Over the past two and a half years, the liability claims picture has remained relatively consistent with the majority of claims relating to slips, trips and falls.

If you have submitted a liability claim and would like to know the status, contact Kisha Reddish.

Reducing Stovetop Cooking Fires

Here’s a snapshot I took of a recent cooking fire claim to our program.

As we note above and you will see below in the claims in the news section, kitchen fires are a significant contributor of claims to our program.

In fact, fires related to cooking are number one cause of fires in multi-residential buildings generally. In early February, the London Free Press reported that firefighters responded to eight cooking-related blazes since the start of 2017, causing a combined $200,000 in damages. The risk is even higher in social housing with incident rates three times higher than in other residential dwellings, according to the Ontario Fire Marshal.

For providers and Service Managers, these fires endanger lives and frequently result in displaced residents, lost rent and a disruption in operations. To help reduce the risk, for our upcoming policy term we’ll be offering providers in our insurance program a 4% discount off their property premium at each location 100% protected by low-temperature stove elements – such as Pioneering Technology’s Safe-T-Elements or SmartBurners. The technology works by controlling the temperature of the heating element, allowing it to reach a set maximum so that flammable cooking materials, such as cooking oils, cannot ignite.

Safe-T-Elements and Smart Burners are available through ONPHA’s Best Deals Program or other authorized dealers. To claim this discount, you need to purchase and register your Safe-T-Elements/SmartBurners prior to the 2017-2018 insurance renewal application deadline.

Find out more about the discount

 

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Guest Column: Want of Repair and One Year Limitations

On September 30, 2016, in the decision of Letestu v Ritlyn Investments, 2016 ONSC 6540 (CanLII), Justice Sloan of the Ontario Superior Court of Justice ruled that the estate of a deceased tenant had 1 year to sue the landlord of the deceased. The estate had claimed that the deceased had tripped on a “worn, torn and unsecured carpet” in his living room and fell, resulting in personal injury (prior to his death). As will be explained below, this is a significant decision for residential tenants and landlords, and should apply regardless of whether the tenant brings his or her claim personally, or through his or her estate.

Note that the decision is under appeal.

Basic Rights and Responsibilities Landlords Should Be Aware Of:

The Residential Tenancies Act, 2006 (the “RTA”)

The Occupiers’ Liability Act (the “OLA”)

According to the RTA, the Landlord and Tenant Board (the “Board”) is the entity that must hear landlord / tenant disputes, such as want of repair claims. This legal concept is known as exclusive jurisdiction. It means that a tenant looking to pursue a landlord for want of repair must start his or her claim before the Board by default.

There is a caveat. If the amount of the claim by the tenant is greater than $25,000, the tenant may bring their claim before the Ontario Superior Court of Justice. This is because the Board cannot award an amount greater than $25,000. However, the RTA still governs the claim, which is an important point as will be explained below.

The RTA provides a 1 year limitation period for a tenant to bring a claim before the Board for want of repair. This means that the claim must be brought within 1 year after the day the problem arose.

The OLA requires that a premises be kept reasonably safe. Under the OLA, a landlord should only be responsible for keeping the rented premises as safe for others as it would be for the tenant. In other words, if a tenant could not bring a claim against a landlord for want of repair of the rented premises, then no one else should be able to either.

The OLA is subject to the Limitations Act, 2002. The Limitations Act, 2002 contains a 2 year limitation period from the date a person making a claim discovered the problem. For example, this means that a person who is injured as a result of a trip and fall has 2 years from the date of the trip and fall (presumably the date that the person discovered his or her injury) to bring their claim. Claims made under the OLA should be brought before the Ontario Superior Court of Justice.

Note that the Limitations Act, 2002 should not apply to the Board, because it is an administrative tribunal.

 

What is significant about the Letestu Decision?

Mr. Letestu’s estate brought his claim more than 1 year after the alleged trip and fall incident. The Court found that the claim was time barred, meaning that it could not proceed.

What is significant about the decision is that the tenant’s estate based the claim on both want of repair under the RTA and the landlord’s obligations under the OLA. In other words, this claim could have been characterized as a landlord / tenant dispute or a personal injury claim.

The question is: was this a landlord / tenant dispute or a personal injury claim?

Justice Sloan found that the claim was a landlord / tenant dispute at heart. Because of this, he found that the rules of the RTA had to be followed. That is, even though the claim could be brought before the Court, the tenant had to follow the rules of the RTA, such as the 1 year limitation period for bringing the claim, when doing so.

One way to think about this is that when the dispute is a landlord / tenant dispute, it is the Board’s case to hear by default. Where the tenant is looking for compensation above and beyond $25,000, he or she may start a lawsuit in the Ontario Superior Court of Justice to seek that compensation. However, the Court is essentially stepping into the Board’s shoes, in terms of which rules it has to follow when considering the rights and obligations of the landlord and tenant. This is because the RTA has given the Board the exclusive jurisdiction to hear the dispute. In other words, even though the venue may be different (the Board versus the Court), the RTA provides that the rules governing the rights and obligations of landlords and tenants should be the same when the dispute is for want of repair.

The problem with this case is that there is no clear guidance as to when a claim by a tenant is for want of repair versus for a personal injury. In fact, Justice Sloan could have just as easily ruled the other way.

As noted above, we understand that this case is being appealed. Perhaps the Ontario Court of Appeal will provide landlords and tenants with some guidance on this point. For now, this case is potentially helpful for landlords looking to have a tenant`s case dismissed by the Court where brought after one year of the problem, provided that the landlord can successfully characterize the claim as a want of repair case at heart.

Avi Sharabi is an insurance coverage and litigation lawyer at Blaney McMurtry LLP in Toronto. Avi is an avid blogger on both LinkedIn and his own blog, insurancelawcanada.com.

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Renewals Are Around the Corner

We just finished presenting our program to underwriters (insurers) for the year ahead. Our goal in these meetings is to get the best possible coverage for our program participants at the most competitive rates. Since 2014 this has paid off, and we’ve kept group premiums at the same level and been able to negotiate additional coverages in critical areas like additional living expenses for residents – to pay for tenant accommodations and meals if they are displaced from their homes.

We are hoping for a positive result for the year ahead. In the meantime, we are approaching the July 14 deadline for providers to get their applications back to us. I’d like to strongly encourage you to submit your completed application on time. For insurers to give us the best rates and coverages, they need a sense of our combined portfolio and its characteristics. We’ve streamlined the process so the renewal application is focused on ensuring the pre-populated information is accurate rather than having you re-entering data into countless fields!

Finally just a few reminders:

  • Building valuations: Having the updated building values ensure that you don’t put your organization at financial risk if a disaster happens. If you need assistance, HSC is pleased to offer a low-cost valuation service.
  • Safety elements: As we mentioned above, HSC will offer a 4% premium discount in 2017 for buildings that are fully equipped with low-temperature stove elements.
  • Tenant insurance: HSC offers a premium discount for buildings where a mandatory tenant insurance policy is in place and an additional discount for providers that monitor it. Our tenant insurance program offers low-cost insurance and is an allowable OW/ODSP shelter expense – in most cases it can be set up so that payment is direct.
  • Smoke-free buildings: We offer a premium discount to providers who adopt a smoke-free policy in their buildings.
  • Premium financing: Want to spread out your payments? We now offer a financing program at reasonable rates.

 

Contact us for more information

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Tenant Insurance In Action

As I’ve mentioned before, the number of insured tenants in our communities is increasing. Because of this, tenants are now becoming a real partner in your community’s management of risk. Here are just a few compelling statistics:

  • Total number of claims in 2015: 151
  • Number of claims involving provider property damage: 12
    • Most common claim types: accidents involving stovetop cooking fires and flooding
    • Total paid to providers for repairs: $292,000
  • Number of claims involving damage/loss of tenant property: 139
    • Most common claim types: theft, break and enter, sewer/toilet backup and broken pipes
    • Total amount paid to tenants: $486,000

The good news for these unfortunate tenants is that they had the financial ability to maintain their tenancy in spite of these setbacks and this is a very positive thing.

Find out about the HSC Tenant Insurance Program Email us for help on introducing tenant insurance to your building

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Getting Educated on Directors and Officers Risk

At the start of this year, we published a Directors and Officers Risk Training Guide to assist providers in mitigating risk in this area. Our program typically responds to a handful of claims each year. But we feel that it is important to support those individuals who commit their time to provide oversight to operations and can be held personally responsible for liability associated with the duties and actions of the corporation.

Over the past few months, we have been delivering facilitated sessions across the Province in which we help groups of providers develop their plans for mitigating and reducing D&O risk. So far we’ve gone to Kingston, Thunder Bay, Toronto, Brockville, Brantford and Ajax.

Interested in organizing a session? Contact me!

View training package View SHARE webinar on the topic

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Recent Insurance Events in the News

While disasters aren’t pleasant to talk about, they can help us get new insights into risk management and lend perspective to the human and economic cost of claims. The following are just some of the stories on incidents reported in the news since my last update:

We saw some other noteworthy stories in the news recently. The Toronto Star published a piece highlighting the value of tenant insurance. There was also a story from Erie Media that reiterated the consequences of not maintaining fire and carbon monoxide alarms.

The start of 2017 has been difficult for Toronto Community Housing in terms of fire incidents. Recently police charged a man for a series of arson events at TCHC buildings. However, there were two stories that will hopefully result in improved collaboration – a CBC story on the “unique challenges” faced by social housing operators and a call for an inquest into a resident death and the need for more coordinated support services for vulnerable residents.
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