april 11, 2007 strengthening communities conference managing your risks ron dennill northern...

April 11, 2007

Strengthening Communities Strengthening Communities ConferenceConference

Managing Your Risks

Ron DennillNorthern Communities Insurance Program

April 11, 2007

Agenda Agenda

What do you have at Risk?• Property Risks• Automobile• Crime Risks• Liability Risks• Construction Projects

April 11, 2007

Construction ProjectsConstruction Projects

Why do you need a contract?Surety Bonding & Insurance ConditionsCourse of Construction Insurance CCDC

April 11, 2007

Construction ContractsConstruction Contracts

Make sure you have a contract in place.Contract spells out who is responsible for

what and the work that is to be performedLots of different Contracts will work but

CCDC contracts are known to Owners, Contractors, Brokers and Insurance Companies

April 11, 2007

Insurance ConditionsInsurance Conditions

Often poorest written sections of most contracts

Include your insurance conditions in your tender

What is normally in the Insurance Conditions?• Bonding• Liability• Property Insurance ( COC Insurance)

April 11, 2007

Surety BondingSurety Bonding

Surety Bonding is Not InsuranceIt is the Guarantee of the Performance of a

PromiseThis will help insure that your project will

be completed as per the contract and people will be paid

It is the Contractor who bids on the projects that must obtain the bonding.

April 11, 2007

Surety Bonding Surety Bonding

Three Parts:• Bid Bond – Usually 10 % • Performance Bond – Usually 50 %• Labor and Material Payment Bond – Usually 50 %

Contractors must qualify to obtain Surety Bonding

Surety Underwriters don’t expect to have a loss

April 11, 2007

Surety BondingSurety Bonding

Surety Underwriters look for the three Cs• Cash • Capacity • Character

Not all Contractors can obtain Bonding You need to decide if you want the project bonded Spell out the requirements for bonding in your

tender

April 11, 2007

Liability Liability

Commercial General Liability• Contractors and Subcontractors

Wrap Up Liability• Owner and All Contractors

Professional Liability• Architects and Engineers

Auto Liability• Owner and Contractors

• Aviation and Watercraft Liability

April 11, 2007

Property InsuranceProperty Insurance

Construction Project itself

Contractor’s Equipment

Property in Transit

Property at an Unnamed Location

April 11, 2007

Course of Construction Course of Construction InsuranceInsurance

Course of Construction Policy covers:• Materials and labor going in to the Project for

Owner and Contractors at the site• Property In Transit• Property at unnamed locations

Can be purchased by owner or contractorInsure for the cost of the completed value Does not cover Contractors Equipment

April 11, 2007

Course of Construction Course of Construction InsuranceInsurance

Start at least 30 days before the work is to start

Will require a completed Course of Construction application

Soils reportBreak down of the valuesProject Schedule

April 11, 2007

Course of Construction Course of Construction InsuranceInsurance

Insurance very difficult to get after the project has started

Insurers may impose some warranties• Fencing of the entire project• Watchman warranty• Hot works warranty

Need advance warning of any extension requirements

April 11, 2007

Other Insurance ConditionsOther Insurance Conditions

Owner as additional insuredIndemnification clauses30 Days notice of Cancellation Match your insurance with your projectHave your insurance section reviewed by an

Insurance Broker or Risk MangerCertificates of Insurance

April 11, 2007

Canadian Construction Canadian Construction Document CommitteeDocument Committee

Who are they?

What do they do?

Why use their forms?

April 11, 2007

CCDC - Who are they?CCDC - Who are they?

National Organization responsible for the Development and review of Standard Canadian construction contracts and forms

Formed in 1974One owner representative from the public

and private sectorVolunteer Members from:

April 11, 2007

CCDC - Who are they?CCDC - Who are they?

Canadian Construction AssociationConstruction Specifications CanadaRoyal Architectural Institute of CanadaAssociation of Consulting Engineers of

CanadaLegal Council

April 11, 2007

CCDC – Why Use these CCDC – Why Use these

Documents have evolved over a long time through Input from experienced people in the industry

Familiar and Fair to all involved in the projects. Not one sided.

Insurance conditions are known by Brokers and Insurance Companies

April 11, 2007

CCDC – Where can I get them?CCDC – Where can I get them?

Forms can be purchased through the NWT Construction Association

April 11, 2007

Your Other RisksYour Other Risks

Property Vehicles and Mobile EquipmentCrimeLiability

April 11, 2007

Property RisksProperty Risks

Buildings ContentsComputersVehiclesMobile Equipment

April 11, 2007

BuildingsBuildings

Most losses to buildings are from firePoor maintenancePoor house keepingImproper storage of material Improper training or planning

April 11, 2007

Vehicles & Mobile EquipmentVehicles & Mobile Equipment

Most accidents are caused by:Driver errorLack of experienceNot familiar with the vehicleImproper maintenance

April 11, 2007

Vehicles & Mobile EquipmentVehicles & Mobile Equipment

Focus on:1. Your Drivers

• Hire good experienced drivers• Provide proper training

2. Maintenance• Daily inspection • Report problems and fix them right away• Scheduled maintenance

April 11, 2007

CrimeCrime

IncludesEmployee bonding Coverage for your money on and off

premisesCounterfeit paper currency and Money

ordersDepositors Forgery

April 11, 2007

CrimeCrime

Key to preventing losses are:• Good physical security• Proper screening of employees• Good policies and procedures

April 11, 2007

LiabilityLiability

Public Works • Roads and Side walks• Water and Sewer

RecreationBuilding MaintenanceAdministration Errors and OmissionsBylaws, Policies and Procedures