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GOLDILOCKS AND THE THREE BEARS INSURANCE BROKERAGE After the story about Goldilocks and her trespassing in the Bears Den broke in the tabloids there was a storm of controversy. The Bears agreed not to press charges and ultimately became good friends and mentors of the charming if somewhat ditzy girl. The Bear family owned Three Bears Insurance, a successful brokerage firm specializing in providing customized insurance and risk management solutions to Small and Medium Businesses. Based on her EXPERIENCE in testing porridge, chairs and beds, Goldilocks and the Bears realized the girl had a natural talent for finding the right fit. They took her on as an apprentice broker working alongside Baby Bear. Once she had completed the necessary hours of community service for her earlier transgressions and an intense program of EDUCATION, the Bears hired her as an Insurance Broker. On the surface the job seemed simple and easy. Meet the client, work with them to gain as much of an understanding of their business as possible and identify and analyze their business risk. Sometimes she would identify risks that clients weren’t even aware of but which they needed to know about. Many of the things that kept them awake at night were easily dealt with once they were identified. In reality, there was many hours of work done behind the scenes in order to deliver the correct advice. Not the least of these tasks was selection of and negotiation with the right insurer. Two of her first clients were the First and Second of the Three Little Pigs. Unfortunately for them, the houses built of straw and sticks did get blown away, but were rebuilt with the necessary building code upgrades all paid for. Luckily for them, she understood that the buildings, being older, would probably not be up to code if they had to be rebuilt. She had purchased additional coverage for that eventuality. Throughout the claims process she exhibited considerable EMPATHY which made the process, although still stressful, a lot easier to manage The Third Little Pig had previously discussed risk management options with Goldilocks taking in to account the peril posed by the Big Bad Wolf and decided to build with bricks so he suffered no loss. He relied on her EXPERTISE! The moral to this story is to keep looking until you find the right Insurance Broker for your needs, and then listen to their advice so you can make an informed decision. Thus endeth the story but not the lesson, which is why Heather Cournoyer, CCIB, CIP is the right broker for you! EDUCATION– Canadian Chartered Insurance Broker, Chartered Insurance Professional, Foundations of Risk Management EXPERIENCE – Over 35 years experience as an insurance broker and business owner EMPATHY - Having had the opportunity to work with hundreds of insured clients in her career she understands how stressful and confusing the claims process can be. She listens and understands! EXPERTISE – It’s not just her understanding of insurance that makes her an expert in her field. Having been a business owner herself and working with hundreds of others businesses owners over the years, gives her a unique advantage. A Certificate from Ryerson University in Entrepreneurial Mentorship doesn’t hurt either! ENTHUSIAM – Heather loves what she’s doing – helping others thrive and survive! It shows when you meet with her.

The Moral of the “Twix” Story We have all seen the commercial about the Twix candy bar and the competition between Right Twix and Left Twix. Both factories are identical and produce the right and left halves of a single product. Yet, there is a sinister difference between the two. In order to save money on Insurance, Right Twix only insures for one half the value that Left Twix does. That’s right, Left Twix insures for 100% of Replacement Cost Value and pays twice the premium that Right Twix does. Right Twix has determined that with all of the safeguards in place it is very unlikely the whole factory will burn down. Maybe half of it at the most. It turns out their estimate was correct because when the fire started in one facility and eventually spread to the other, the fire was brought under control with only partial damage to both Right and Left Twix. Right Twix called their Insurance company to file a claim fully expecting they would pay for all of the damage. Left Twix did the same. Since Right Twix only insured for half their value and paid half the premium that Left Twix did, does it seem fair to you that Right Twix should receive the same benefit as Left Twix, who paid twice the premium for twice the amount of insurance? It isn’t fair at all, not to all the business owners who pay their full share of premium or to the insurance companies who collect the premiums of the many to pay the losses of the few. For this reason, Fire Insurance policies usually contains a premium levelling mechanism referred to as the Co-Insurance Clause. The Insurance Broker for Left Twix took the time to explain this important condition. For a Replacement Cost Policy, Coinsurance is usually set at 90% of the Replacement Value. Failure to do so will result in a penalty if there is a claim, and the following is an example of how it works; The Twix factories both had Replacement values of $1,000,000.00. The minimum amount required by the Coinsurance Clause is therefore $900,000.00. It is of course best to insure for 100% of Replacement Value, but that is another story. The formula is best explained as Did, divided by Should, multiplied by the amount of the damage to the factory. In this case each factory had $250,000 in damage. That means that Right Twix was paid; DID. SHOULD. DAMAGE. SETTLEMENT $500,000 \ $900,000 X $250,000 = $138,000 and became a Co-Insurer for the difference of $112,000.00 Left Twix promptly received the full settlement of their claim and was soon back in operation. Right Twix needed to obtain additional financing to rebuild causing delays in resuming operations and went eventually went out of business leaving Left Twix making both halves of the chocolate bar. The moral of this story is that the right Insurance Broker will tell you what you need to know, not just what you want to hear, or; You can’t expect to get both halves of the Twix if you only pay for one.

So How Much is Enough? Nobody wants to be over insured so the question to ask is how much is enough? This a question that a qualified insurance broker is well equipped to help you find an answer to. For property insurance the answer is fairly simple. What is the replacement cost value of your property? Take that figure and allow a percentage for increases over the policy term. Many insurance policies already include that provision. Does yours? What is your appetite for risk? This question goes to the amount of deductible that you should carry. This is one of the best ways to reduce premiums. If you wouldn’t submit a small claim, why pay a premium based on low deductibles? For business owners the place of work is important to income and any damage can result in an interruption in the revenue stream. Time becomes of the essence in restoring damaged property so the business may continue producing revenue. The expression “time is money” is never so graphically proven as when a business owner is struggling to carry on operations in the midst of property restoration. Your broker can assist you in selecting the correct form of Business Interruption Insurance, and more importantly, the correct amount to make you whole again. Selecting an appropriate amount of Business Liability Insurance used to be an objective process based on the value of the asset needing protection from lawsuits. Our society has changed and with it the complexity of legal tangles an individual or business owner needs to manage. Your broker can assist you in identifying these exposures and how to mitigate many of them as the first step in financing the risk with the correct form of liability insurance. It is a process that should and does take some time but consider it well spent. The short answer? Engage in best practices, self insure as much as you can afford, and buy high limits to cover the catastrophic loss that will put you out of business. As your insurance broker, I’ll be there to advise and guide you through this process.

Contractual Liability – What do you mean it’s my fault? Did you know that many contracts may contain clauses that transfer the responsibility for damage or loss back to you? Do you rent equipment to use in your business? If so, you may be held liable for damage to that equipment. Are you sure that your current insurance policy provides you protection just in case? Are you involved in any type of maintenance work? It could be snow removal, lawn care, commercial or residential cleaning. You could be responsible with or without having signed a contract if someone is injured as a result of your work. Even if you don’t feel you were responsible, you will still have legal defence costs if you are sued. That protection can be available under your Commercial General Liability policy. Do you review any contracts that you sign, before signing them, to make sure you aren’t assuming additional liability that you shouldn’t be held responsible for? If you do sign agreements where you have assumed liability, does your Commercial General Liability insurance afford you protection? Are you hiring sub-contractors as part of your business? Are you requesting a Certificate of Insurance to make sure they have their own liability coverage? You may or may not be covered under your own insurance. Have you considered being added as an Additional Insured under their liability insurance to provide protection for you for work performed by them? These are all questions that need to be answered to ensure that you have the protection you need in the event of bodily injury or property damage arising from your work. For more information contact Heather Cournoyer, CCIB, CIP, Commercial Insurance Specialist at Think Insure heather@thinkinsurance.ca

WHY IS BUSINESS INSURANCE SO COMPLICATED??? Hi – I’m Heather Cournoyer and I’m a commercial insurance specialist. Don’t run away now. Insurance is not a career that is thought of as exciting, rewarding or highly regarded! As a matter of fact, most consumers think of it as a grudge purchase, something they need to have but won’t use. They pay premiums, never have a claim but the premiums keep going up. If they do have a claim, it’s often a confusing maze of legal jargon and forms. They feel they are all alone in the process; that it’s a fight they have to win. And then the premiums go up again!! So, you would have to wonder why I’m in this field. I’ll tell you. I’m passionate about helping people. I know how important your business is to you! It’s your passion, your livelihood. It’s how you provide food and shelter for your family, it’s how you pay for your lifestyle. And it’s not just about you! It’s about your employees and how you can contribute to your community. I get that. That’s why when I work with a client, I get to know who they are, what’s important to them and make sure that the insurance protection we put together is going to take care of what matters It’s not always about how much premium you pay. It’s about how that insurance contract is going help you when something happens. I’ve seen it over and over again. Inadequate coverage that ends up costing you many times over what was saved in premium. Warren Buffet nailed it when he said “Price is what you pay – Value is what you get.” Having said that those premiums have to be competitive! You’re running a business. Just know that if you spend the time up front really reviewing and understanding your insurance, it will save you time and money in the long run. In the majority of cases, when I work with a business owner, not only have we improved the insurance protection, we’ve usually ended up at the same or better premium than what they were paying. What have you go to lose? Give me a call. It costs you nothing to have that conversation, review your coverage and could you save you money and major headaches down the road. I’ll be a second set of eyes to review your existing insurance situation.