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Managing Risky Business: Q3/2015

In this issue of Managing Risky Business, read about:

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Group Insurance Update

Work to renew the Group Program is now well underway.  In May, HSC CEO Howie Wong and I, along with our program broker, met with current and prospective underwriters. The insurers we met with were concerned about the property claim costs that the group incurred during the 2013/14 policy term. That was a difficult year, which started with a catastrophic fire in a seniors’ complex in Kingston and was marked by numerous claims from winter ice storms.

To assist these insurers in having a balanced perspective of our program, we pointed out the reduction in claims and claims costs in the first half of the 2014/15 term and the great risk management work that providers have been doing.  Tenant insurance, well-attended emergency planning seminars and updated property values helps paint a picture of a well-managed risk that insurers want to see.

We’re cautiously optimistic of the results of our initial negotiations. However, this is a process that occurs over time. We will keep you posted on the results. In the meantime, electronic renewal applications have been sent out to providers and approximately 1/3 of our total group has returned completed applications to Marsh Canada. If you haven’t completed your application yet, please return it as soon as possible or contact me if you need assistance!

Property Deductibles

My conversations with both underwriters and the program broker also suggested that the days of $1,000 property deductibles for corporations may be ending as they are no longer sustainable – such a low deductible is growing increasingly costly for underwriters to offer to groups.

To give you a sense of what this means in dollars and cents, I asked our broker to estimate savings on property premiums and contributions to the property claims fund trust for deductibles over $1,000:

Deductible Level Discount
$1,001-$2,500 ~2.5%
$2,501-$5,000 ~7.2%


This estimate does not account for construction type or other factors – as such, it’s a fairly conservative estimate. Regardless, there are savings to be had! As you move towards making decisions for the 2015/16 policy term, I would strongly encourage you to review your deductibles with Marsh, see the premium impact of various deductible levels and if you have a $1,000 deductible, consider adopting a $2,500 or $5,000 corporate deductible.

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Insurance Reference Group & Customer Experience Pilot

One of the ways to ensure that HSC stays connected with sector business challenges is through its sector-led board and working groups. To improve our efforts on risk management and ensure that they’re in sync with the needs of front-line housing professionals, HSC has established a new Insurance Reference Group.

This group will monitor insurance claims to help identify and assess trends and developments; monitor and manage our program’s service providers; participate in RFP evaluations and help us develop additional front-line risk management tools.

Our group held its first meeting in mid-July and had a very lively discussion on a range of topics, including the question of raising the group deductible. One way of controlling insurance costs is to adjust your deductibles. By raising your deductible to the right amount, you can achieve the lowest cost of risk. Raising the minimum group property deductible would enable providers to save money on insurance premiums. However, this would mean that smaller claims wouldn’t be covered.

We’d like to hear your opinion on this idea. Vote in our poll!


Customer Experience Pilot

To further assist us in delivering the best possible service to you, HSC Insurance & Risk Management is undertaking a pilot to assess and evaluate our customer’s experience of our services. This is the first step in a broader move by HSC to evaluate satisfaction with its services and identify areas for improvement on an ongoing basis – which is part of HSC’s 2015-17 Strategic Plan. Don’t worry – we won’t inundate you with long surveys! The goal here is to be targeted in our approach to make our services easy to use, deliver greater value to the sector and to help our staff improve their interactions with you. Participation is completely voluntary!

You may have already noted some of the tools we’re using: we’re asking people to evaluate Managing Risky Business with a two questions at the bottom of each issue; we also included a three questions at the end of our new electronic renewal form to formally evaluate its introduction. We also plan to ask attendees of our educational sessions to briefly evaluate the applied value of the material a few months after the session. And now that we have a claims coordinator we intend to ask providers who have recently closed property claims about their experience.

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RST on Property Claims Fund Trust

Over the past three years, HSC has been working on a legal tax question relating to the HSC Property Claims Trust Fund (PCTF) and whether it is subject to provincial Retail Sales Tax (RST).
As you know, in 2011 HSC set up the claims fund to pay for the group’s self-insured deductible. After voluntarily collecting RST on the fund in the introductory year, HSC sought a legal opinion from our tax lawyers in March 2012. Our tax lawyers determined that contributions to the fund should not be subject to RST because it is not an insurance premium or a service — rather, it operates like a trust fund. The program insurance brokers concurred with this opinion.

As part of this process, our tax lawyers  shared their views with the Ontario Ministry of Finance. The Ministry subsequently audited the PCTF and continues to analyze the matter. To date, a final ruling has yet to be issued. As a result, HSC has not collected RST on the PCTF component of provider insurance costs since the 2011-2012 policy term.

HSC expects a ruling in the coming weeks. In the meantime, we are continuing to work on behalf of providers in making our case to the Province.  We are also developing response plans in the event of a negative ruling — the worst case scenario being the retroactive collection of all outstanding RST (2012-2013 to present) from program participants.

We remain hopeful of a positive outcome. However, to ensure that the sector is aware and informed of the matter, HSC brought this issue to the attention of the Service Manager Housing Network earlier this year. We will keep you updated on any developments.  Should you have any questions, please do not hesitate to contact me at or by phone at 1.866.268.4451 ext.314.

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Tips on Handling Tenant Insurance Claims That Involve Building Damage

It is gratifying to see more and more residents of social housing across Ontario protected by tenant insurance. Much of this growth has been the result of Boards of non-profits and co-ops making tenant insurance mandatory in their buildings.

It’s also been good to see tenants making legitimate insurance claims. They are utilizing the product as intended. In 2005 when I first approached the insurance market to develop a group tenant insurance program, they politely declined. There was no underwriting history, and this was a challenging group to define. Insurers expressed concern about the concentration of risk. They were also worried about whether “our” tenants would abuse the coverage.

Jump to 2015. Our program today insures roughly 8,000 residents across the Province. Since November 2014, 36 claims have been opened, comprising of a mix of property claims (water damage, theft, and fire) and two liability claims (both cooking fires). Tenants are not abusing the product and the loss ratio is comparable to the best group personal lines programs. This is very encouraging to see.

One of the benefits of tenant insurance is that it will pay for the damage that a negligent tenant is legally obligated to pay. However, landlords are not a party to the tenant insurance contract and they have no direct access to the policy. Just because you think the tenant was negligent may not be sufficient to make a successful claim. Therefore, it is vital to document the process from the moment you are aware of the incident.

An Example and Checklist

Let’s imagine that there has been a cooking fire that’s resulted in damage to a unit. Here’s an outline of the process we recommend:

  1. Document the damage with photographs: While your first impulse might be to fix or clean the area where the property damage has occurred, property managers should preserve the scene and should start by taking photographs.
  2. Gather and document information regarding what occurred and the cause: If the insured resident is available and willing to talk, ask for an explanation on what happened and take notes. Explain to him/her the process you will be undertaking and what to expect. Ask if there were any other eyewitnesses. If emergency personnel are on site, speak to them regarding the probable cause and make notes. Remember to collect the contact information for everyone.
  3. If the cause is questionable, weigh your options: If you have any doubt regarding the cause of the fire, pause. Tenants may attribute the fire to a faulty stove. In such instances, you can:
    • Involve your property insurer so they can retain a fire investigator to examine the stove and kitchen electrical system.
    • Consider reporting the claim to your liability insurer, they too will probably retain an investigator.
    • Retain a fire cause investigator directly, particularly if the damage is below your deductible.
  4. If the insured tenant acknowledges their fault, document the conversation: If the resident admits that s/he left the stove unattended (for example), you may be able to rely on documenting that conversation.
  5. Deliver a formal notice letter: If there is sufficient reason to believe that the tenant was responsible for the damage, you need to deliver a notice letter to the tenant advising them the landlord is holding them responsible for the damage to the building and suggest that they pass the letter to their insurer. For tenants in the HSC Tenant Insurance Program, we have simplified the notice process and you can find sample claim notifications here.
  6. Work with the tenant insurer investigation to expedite the process: Once the tenant insurer is notified of a possible claim, they will conduct an investigation and make a determination regarding their insured’s legal responsibility for the damage. The insurer may wish to have their expert examine the scene and you may provide reasonable accommodation for them. They may also ask their own contractor to view the damage. Then they will respond to your claim. This often takes a few weeks.

What to Expect After The Claim Goes Through

If the tenant insurer determines that the insured resident was indeed negligent, they generally expect the landlord to fix the damage and submit the claim for their consideration.

Also unlike your corporate property insurance, which covers the replacement of old cupboards with new cupboards, the tenant insurer will only offer Actual Cash Value (or ACV). ACV is the depreciated value for the property that was damaged. If the cupboards are 20 years old, you will be offered the value of 20-year old cupboards. All this is subject to negotiation.

Finally if you have made claim on your own property insurance, your insurer will manage the recovery process for you. If your insurer is successful in recovering ACV and the recovery from tenant insurance exceeds your corporate deductible, you can expect to recover your full deductible and your insurer will keep the balance, crediting your loss history.

Have questions about HSC’s Tenant Insurance Program? Need further advice in how to handle claims? Contact Kisha Reddish at or phone her at 1.866.268.4451 x.241

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Updates on Other HSC Insurance & Risk Management Services

Feedback on HSC’s Contingency Planning sessions:

“Great help on brainstorming and starting with a risk management plan” – Dritan Sahatci, Maintenance Manager, WigwamenContact the UMP team

“Very informative. Creates a template for providers” – Winston Vidac, Property Manager, Family Action Network Housing

“It is a really good guide and I got a lot of information and answers to some questions I had” – Drtia Kapendani, Facilities & Maintenance Director, Sojourn House

  • Claims information: Do you have an outstanding claim and are seeking information on its status? My staff would be pleased to assist you. For information on property claims contact Daniel Chadwick at For information on liability claims contact Kisha Reddish at
  • Contingency Planning: Help mitigate risk in your community by using our Contingency Plan template and Planning Guide. HSC can also deliver facilitated sessions free of charge where we work with groups of providers in filling out the contingency plan template.  For more details on this service, contact me.
  • Common Room Insurance: Don’t have a mandatory tenant insurance policy but looking to afford your organization a measure of protection when special events occur on site? Consider requiring event organizers to take out affordable common room insurance for community events on your property. We recently updated our application form for this type of insurance, so please have event organizers use the current version, available on our website.
  • Tenant Insurance: In April 2015, we launched an online application for residents so they can purchase insurance on the web. Ahead of the launch of this function, we held a webinar for housing provider staff on how the online application works and considerations to support online applications. A recording of this webinar is available for viewing.

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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:

Finally, there’s another story worth noting in the news. This is not a member of our program but serves as an important caution on the importance of complying with the Ontario fire code. A St. Catharines’ landlord was charged $20,000 for failing to comply with an inspection order to fix his multi-unit property to meet the code. You can read the full story here.

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News from the HSC Insurance & Risk Management Team

Since our last update, our small team here has been busy working on the HSC Group Insurance Program renewal, continuing to emphasize the importance of tenant insurance, managing claims and supporting providers in their risk management efforts with education and hands-on support.

In mid-April, we put a HydroVac Truck on a train to Moosenee to clean and dry the site of a flood (pictures below). We believe that tenants and providers in Moosonee and other remote locations should have access to the same quality claim service as urban organizations – and thankfully the power of the group makes that possible.

managing-rb-july-2015-no-1 managing-rb-july-2015-pic-2

On a related note, in March, we were able to bring on-board a new provider in Smiths Falls, which had trouble obtaining insurance from other insurers and are now working closely with them to improve their risk profile. Then in May, we were positively referenced in a story in May in Cornwall Newswatch relating to their insurance.

In terms of meetings and outreach with clients, here’s where we’ve been:

  • Kisha and I met with several providers about the program at the ONPHA Regional Sessions in Ottawa, Barrie, Hamilton, Toronto, Thunder Bay in April and May
  • Presentations to the Boards of Durham Region Non Profit Housing and Renfrew County Housing Corporation. I was thrilled to see Renfrew staff include the previous issue of Managing Risky Business as part of the package to raise awareness at the board level! There was also a great write-up in the Daily Observer which referenced my presentation and spoke to the staff’s success in persuading political decision-makers of the sense of mandatory tenant insurance
  • Discussion with Simcoe County’s Social Services Division and housing staff on contingency planning and tenant insurance. I was thrilled to read in the news that Barbara Hall at Huron County presented to council a report recommending mandatory tenant insurance
  • Contingency planning sessions in Toronto and Wellington County and property inspections in Kirkland Lake
  • Presentations on tenant insurance to Central East Housing Managers and Woodgreen in Toronto


If you’d like to meet with us, we’d be happy to visit you in your community. Simply send me an email or call me at 1.866.268.4451 x.314


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[view previous issues of Managing Risky Business]


Call Me Maybe
One Life
Turn Me On
Glad You Came
Rack City
Stand Behind The Music
Ninjas in Paris
What Makes You Beautiful
The Motto
Wild Ones
Turn Up The Music
Middle Finger
Sorry For Party Rocking
Is Anybody Out There?
Safe and Sound