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Managing Risky Business: Q3/2017

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In this issue of Managing Risky Business, read about:

 


Renewal Update

I’m pleased to report that our program was able to negotiate a good deal from the insurance marketplace.  Program-wide we were able to:I’m pleased to report that our program was able to negotiate a good deal from the insurance marketplace.  Program-wide we were able to:

  • Hold Property and Directors’ & Officers coverages at “as is” rates
  • Negotiate 5% rate decreases for boiler and liability coverages

This year, we were also able to recognize providers that are taking important, proactive steps in managing risk in their communities with over $700,000 in premium credits:

  • 165 providers shared $200,000 in credits for having non-smoking buildings
  • 72 providers shared $126,000 in credits for having stovetop safety elements
  • 270 providers shared $228,000 in credits for compulsory tenant insurance, of which 172 providers shared $150,000 in credits for monitoring tenant insurance

Did you know?

  • 36% of residents insured by HSC’s tenant insurance program purchase option 2 for increased limits.
  • 33% of tenants apply for insurance online versus telephone.

Your individual insurance costs for will depend on a variety of factors (claims history, the value of your building over time, risk mitigation measures, etc.). Should you have any questions about your premium or need advice on managing your insurance costs, we’re happy to help!

Holding the group premium costs steady past four years is a combined effort. It’s thanks to the diversity of providers in our group; a claims trust fund that enables insurers to focus on large claims; and our shared commitment to reducing and mitigating the risks we face.

This last item is vital. Focusing on improving our risk profile is key to controlling insurance costs – the safer we make our communities, and the more we can demonstrate our readiness to meet challenging circumstances, the better we’ll do as a group.

This term we were also pleased to further streamline the renewals process and make it more user-friendly. This included:

  • Providing you with a timetable of important dates in the process and deadline reminders
  • Offering premium financing for providers seeking to spread payments across a longer term
  • Showing the premium credits you are receiving (e.g. non-smoking, tenant insurance, Safe-T-Elements) on your invoice
  • Including your invoice with your premium quotes
  • Automatically adjusting building values

To both our new and renewing clients, I’d like thank you for choosing us! Should you have any questions, please do not hesitate to contact me.

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Current Claims Picture

From January 1 to September 30, we had a total of 56 property claims, with the bulk of these claims occurring in June and August.

Water and fire claims comprised the bulk of the property claims. Cooking fires and careless smoking claims were the leading causes of fires and burst pipes. Water claims were primarily the result of burst pipes, rain damage and overflows.

The greatest number of claims were made by providers in the Central Service Manager region — not surprising given that this is where we find the greatest concentration of insured units.

In this time period, claims from smaller providers outstripped those from larger providers although claim values were generally consistent.

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Case Study – How the Power of the Group Helps:

Melco Community Housing Corporation is a non-profit housing provider that was established in 2007 under the Canada-Ontario Affordable Housing Program. Under the guidance of its seven member volunteer board, Melco operates a portfolio that comprises of 29 units across three low-rise buildings in Windsor.

According to Dave Foley, Melco’s President, the organization “provides a hand up, not a hand out, to those people in our community that are not as fortunate as some,” housing victims of violence and trafficking, individuals with physical and mental challenges, low-income seniors and single-parent families.

In May 2016, a fire broke out in the attic of Melco’s 11-unit walk-up destroying the roof and one unit. The investigation was not able to determine a cause. But the top level of the building was rendered uninhabitable and its tenants displaced.

”Thanks to the City and Windsor-Essex Community Housing we were able to get our residents re-housed quickly.” Dave says. Repairs were completed in short order. The total cost of the property claim was approximately $300,000. However, Melco received indications from the insurer that their policy wouldn’t be renewed at all. “It was a source of deep concern, since without insurance coverage you’re not going to re-open the doors,” Dave says. The insurer subsequently came back with a quote – but it was three times that of the original premium.

To address this financial challenge, Dave spoke to the Housing Coordinator at the City of Windsor, who referred him to HSC. “I hadn’t heard of them before,” he says. In July, Dave met with HSC Insurance and was offered a substantially lower quote.

“The value of HSC’s insurance program to our organization is phenomenal. As a non-profit focused on keeping rents low, we need to keep our ongoing, operating costs down. HSC helped with this when our premiums from private insurers would have skyrocketed,” Dave says.

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Update Story: Want of Repair & 1-Year Limitations

In our previous issue, Avi Sharabi wrote about the decision in Letestu v. Ritlyn Investments, decided in September 2016 by Justice Sloan of the Ontario Superior Court of Justice. Since then, there has been an update that provides clarity on the limitation period

Justice Sloan had ruled that the estate of a deceased tenant had 1 year to sue the landlord of the deceased. The estate claimed that the deceased tenant had suffered injuries from a trip and fall on worn carpet at the rented premises that needed repair. The action was brought pursuant to the Occupier’s Liability Act and the Residential Tenancies Act, 2006 (“RTA”) more than one year after the incident. Sloan J. had held that the 1-year limitation period in the RTA applied because the nature of the claim was for want of repair.

The Court of Appeal reversed that decision and held that the limitation period was prescribed by the Limitations Act, 2002 because the action was brought before the Superior Court of Justice and not before the Landlord and Tenant Board (“Board”). The Court of Appeal’s decision creates more certainty as to the applicable limitation period where tenants sue landlords in Superior Court.

Appeal Decision

The decision under appeal was based on the premise that the RTA governs all disputes arising out of residential landlord tenant relationships. The argument was that the action was, in substance, one for want of repair – a matter governed by the RTA. Because the RTA has a $25,000 cap on damages, the plaintiff, who was seeking more than $25,000 in damages, brought the claim before the Superior Court. Since the claim was one that would have been adjudicated by the Board, but for the monetary limit, it was argued by the landlord that the limitation period in the RTA applied. The Court of Appeal rejected this argument.

The Court of Appeal concluded that because a litigant may choose to start an action in Superior Court where he or she claims more than the cap, the Board does not have exclusive jurisdiction over all claims to which the RTA could apply. The Board only has exclusive jurisdiction for want of repair claims within its monetary limit. Above that limit, jurisdiction over such claims rests with the Superior Court of Justice.

Since the Superior Court has jurisdiction, the limitation period in the RTA does not apply. The limitation period of actions brought before the Ontario Superior Court of Justice is governed by the Limitations Act, 2002 (“Act”). The basic limitation period contained in the Act is that a claim must be brought within 2 years of first discovering that claim.

Sections 2 and 19 of the Act provide exceptions to the basic limitation period prescribed by the Act. Specifically, in accordance with section 19, the limitation period contained in the Trustee Act applied as the claim was being brought by an estate trustee. According to the Trustee Act, actions by an estate trustee must be brought within 2 years of a deceased’s death. The plaintiff brought its action within this timeframe; therefore, its claim was not barred.

Take-aways

The Court of Appeal’s decision stands for one main proposition: the limitation period for actions brought before the Ontario Superior Court of Justice is governed by the Act. That means that it is 2 years from the date the claim was discovered, unless the Act expressly says otherwise. In this case, the limitation period was clear from reading the Act and neither the RTA nor any other statute should have been referred to when deciding on the appropriate limitation period.

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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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 claims incidents to the HSC Group Insurance Program reported in the news since my last update:

Though we didn’t see any stories specifically about flooding in provider buildings, there was a surge in these types of claims to HSC’s program during the wet summer of 2017 – particularly in Windsor, though providers in Orangeville, Thornhill, Chatham also had trouble.

During this period, there was also a news story that reinforced the importance of getting flammables out of hallways (not a group member). We also saw two stories on how providers improving their risk profile by taking action: the District of Sault Ste. Marie Social Services Administration Board worked with the local fire service to conduct a mock fire scenario and evacuation of a high-rise. And CityHousing Hamilton is acting on a series of enterprise risk recommendations.

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Risk Management Resources

Here’s a roundup of resources that can help you better manage risk and keep your community safe:

  • What you need to know about ‘bouncy castles’: Inflatable play structures are becoming more common at community events. Children, however, can get injured if they’re not set up or maintained properly or unsupervised. This fact sheet from Marsh outlines ways to mitigate the risks.
  • Stove shutoff device: I recently came across iGuardStove, a new safety device on the market. It automatically shuts off stoves (gas or electric) when stove is running unattended for a set amount of time. For more information, visit: https://iguardfire.com/
  • Updated contingency planning guide & template: We’ve updated our contingency planning guide and workbook based on our workshop sessions with housing providers and Service Managers over the past two years. We’ve added sections to the guide and workbook to reflect plan elements we previously missed. The new guide also includes a series of Emergency Preparedness Bulletins for posting in lobbies and common areas to inform residents on what to do in the event of an emergency.
  • The Office of the Fire Marshal has a wealth of helpful online resources. They’re great in terms of thinking about building policies, content for tenant newsletters, sharing with property managers, posting on bulletin boards or distributing at community events. Here are some that I think are the most relevant for our group:

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Good-bye Kisha!

At the beginning of October, we said good-bye to Kisha Reddish, who served as our Manager of Insurance Services since 2014. She’s opted to pursue an opportunity much closer to home that doesn’t involve a Go Train commute.

We will miss her. In the three years that Kisha worked with us, she played an important role in managing the renewal process. She also handled liability claims; provided oversight on the tenant insurance program; and was instrumental in implementing changes to the renewals process to make it more user-friendly.

For now, I will be handling any inquiries you might have previously directed to Kisha.

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