With the season upon us, Paul Martin & Colin Rooke discuss all about snow, ice damming and insurance.
Listen to the full episode here, or read the full transcript below.
Okay. Welcome to Risky Business. Commercial insurance with Butler Byers. This is Paul Martin, the host of the show and the business commentator here on CKOM. And joining me today, Colin Rooke, commercial risk reduction specialist in the world of insurance. And of course, he’s one of the guru, big, big shot guys over at Butler Byers.
Colin, we dedicate a lot of energy, effort and focus in this program to, hey, business person, there’s a new thing coming out that you need to be watching. But new and emerging risks are always, I guess, interesting. We always like to hear about things that are new. But, in point of fact, all the stuff that we would’ve covered two or three years ago are just more mundane things.
The whole world isn’t all about new. There’s changes coming to old stuff too. That’s what I want to talk about today. And I guess seasonality is upon us. We’re starting to see the first bits of snow this year and I just was curious. I mean, how does the insurance industry look at snow and is it something we need to be talking about?
So, the insurance industry’s stance on snow is they don’t like it.
Straight, simple. And when you’re a buyer of insurance and the insurance company doesn’t like it, there’s usually a message implicit in all of that.
Right. The insurance company would prefer you say, no, thank you, to snow at a high level. It’s a big deal and actually it’s getting worse. And I’m not even talking really about global climate change. However, for some reason, ice damming in the last 10 years is turned into a thing and really it wasn’t happening the 50 years prior.
I mean, 2011, 2012, there’s a lot of ice damming claims and all the adjusters had to attend these conferences just to learn what it is, what it does, how to adjust for it. And even the policy wordings, there’s all this controversy as to whether or not it’s covered. And from there, and I think that’s the catalyst, it’s really changed the whole insurance industry’s stance on snow.
So, if you’re in the snow removal business, or know anyone that is, or your broker’s doing their job and asking you either as a business owner or as someone that’s leasing a space, if you’re doing your own snow removal, which isn’t often the case that question’s asked, it is a big deal to insurance companies. Well, there’s the slip-and-trip side of things, but on top of that, it’s damage to roofs.
So you have people saying, well, I know what ice damming is and I don’t want that. So I’m going to try and scrape my own roof. And you’re doing $40,000 worth of damage trying to get the snow off, to save a couple thousand dollars’ worth of potential damage because you’re not trained. You know the snow shouldn’t be there but you’re not exactly trained to remove it properly.
On top of that, you look at commercial buildings and you’ve got people again, whether the roof, whether just the premises itself, we got increased prevalence of injury. And then you’ve got these half million, three quarter of a million dollar roofs being completely damaged by, call it volunteers or untrained individuals, trying to get the snow off.
And so it’s just completely rocked the industry to the point where the actual professionals are paying just jaw dropping increases on the liability portion of their policy, all because of how much damage is being done by individuals, for the most part, around this idea of clearing snow, being helpful, trying to look after their own building. And in doing that, essentially ruining it.
Who would’ve thought that snow would be becoming such a factor in all of this, and in a way the enemy of building owners. And I guess this applies to, if I heard you correctly, I mean, we don’t usually talk about home insurance that much here, but this is as much a residential issue as it is a commercial one.
Yeah, it is. And we don’t really talk about home insurance. However, because of the prevalence of the problem, we have a guide for how to treat your home in the winter because you’ve got individuals doing what they think is right, which ends up actually doing what isn’t okay.
Now, I’m not saying don’t buy one of those long rakes and pull some of the snow off your roof. But then when you have people up on the roof with a shovel, for example, damaging shingles because they want to get right down to it, that can turn into a big deal. And so, for any homeowner listening, we’ve got a guide that not only helps you deal with snow, but it talks about what you should do, for example, if a storm is coming.
Real world practical advice how you can mitigate as much risk as possible, if there’s snow, if there’s freezing rain. When the big snowfall comes, if there’s a blizzard, all that stuff. It says, okay, the best you can do to mitigate, follow these steps. And so, we’ve expanded on the commercial side and said, we can help a lot of individuals with this information as well.
It’s interesting because it takes us back to a theme. It’s a theme that we’ve talked about repeatedly and really underlying all of this. I mean, you provide a whole pile of information to business owners or to people charged with managing businesses. And in a way they would feel like, well, that Colin’s selling me something here. And really what you’re saying is, listen, it’s the other way around.
It’s, I’m going to give you information that will make you look like a better customer, a better prospective customer to the insurance industry. It’s a novel concept of, we spend a lot of time trying to be really good to our customers, but do we ever think about the reverse of how do we become a better customer of any of our suppliers and insurance being one of them. And you’re giving me some hints here on how either people in business or just people on their personal side of their life can become a better customer of the insurance industry. And if they do that, then what? I mean, what does that mean? How do the insurance industry look at it?
If you get enough people working on risk mitigation, it’s going to drive overall premiums down. But what a lot of people don’t consider too, is built into almost every home insurance policy, if you’ve gone claims free, is a claims free discount. And just losing that discount alone in the event of a claim can… If you’ve had it for a long time you don’t realize what you would be paying until it’s gone. And then suddenly you’re paying the full rate, and maybe a little more because of the claim. And it can end up being a pretty shocking year-over-year increase.
And you mentioned, just again, being a better customer. So, for any landscape company or snow removal firm that’s saying, look, I know how to clean a roof properly. Colin doesn’t have to come on this show and tell me that snow is a problem. That’s right. I’m not going to argue you don’t know what you’re doing.
But for example, when you prep a job site, before you start the snow removal, do you have a checklist that is followed, or even at a high level, that the company follows, that you could send to someone like me that I can share with an underwriter who thinks you’re high risk, you’re going to ruin roofs. People are going to slip and break hips and we’re going to be out tens of millions of dollars in liability claims.
Do you have a checklist? And is that checklist being passed on and explained to shed your company in a better light? And that’s the real point here. It’s not that business owners don’t know their craft, it’s how are we documenting and sharing that information to prove that you do.
It’s like having a safety manual at work. Well, listen, we’ve got to take a little break. We’ll come back. I want to pick this up, this whole notion of a checklist. So you’re, I think providing some really interesting insights today that go beyond what we would normally talk about.
You’re listening to Colin Rooke, commercial risk reduction specialist with Butler Byers. This is Risky Business. Back after this.
Welcome back to Risky Business. Commercial insurance with Butler Byers. Paul Martin here. And joining me, Colin Rooke, our expert in this area. And Colin, we were talking just before the break about the importance of not just knowing how to do things, but it’s actually documenting them. And man, if there’s anything I hate doing, it’s tracking that stuff and writing it all down. But you’re saying it is money and time well spent, because you’ll save money at the other end.
Yeah. And I don’t like it either, which is why we make it easy. And again, back to some of these checklists or manuals. I mean, they’re deliberately written so you can review what we’ve done, nip and tuck, and there you have the manual.
These checklists, I mean, depending on the job you might say, look, before we start a major project, we just want to rip through this checklist each and every time. Or maybe you share it again at the company level. Or at bare minimum, fill it out and discuss it. And again, we have these checklists and manuals for so many industries, and when you go through them it just seems like some of these questions are just assumed, right? Like, I can’t believe you’re asking me this question.
So for a firm that specialize in snow removal, do you have a cleanup procedure at the end of the shift? It’s like, of course we do. We put our equipment away. We haul it back to the next job and we start working. But what’s crazy, and what I’m trying to stress, is your underwriter doesn’t know that. So they assume you have nothing, and it’s helter-skelter, and they just, you don’t even know what you’re doing from job to job.
What do you do if snow begins to melt? Are there hoses and pumps available for what water removal? Again, I wouldn’t have lasted in this business this long if I didn’t have some contingency for water. But again, these are questions that they don’t know the answer to. Or they need to know, and the reason they need to know is because of claims.
So every underwriter’s going to say, Colin, you tell me that now, but two years ago, such and such claim came in and they had no policy for this. They didn’t own any hoses. Therefore, ice started to melt and we had a $1.3 million flood in a commercial building. And so-
Sorry, Colin, I’m just guessing too. The thought that’s crossing my mind is most of these policy ratings are set up on a national basis, I would assume. And you don’t have to live in Canada very long to know that the snow they get in Ontario, Quebec is different than the snow they get in Alberta and Saskatchewan. But I’m guessing that we get rated with that heavy, wet snow from the east, because it’s all factored into a national pricing policy. And the question I would ask a homeowner or a business owner, is how well do you know the snow in Ontario? Because that’s how you’re being rated in Saskatchewan.
Yes, you are a 100% correct. Anyone that’s in Saskatchewan knows that if you forget to shovel your driveway and you’ve driven over it a few times. I mean, it comes out in two-inch blocks and those sit on your lawn for the next two months, they don’t do anything. Whereas in Ontario there’s a lot of wet snow, melting, freezing, more thaw, more wet snow. And so they’re assuming that, okay, well, in Saskatchewan, Manitoba especially, it’s the same problem, just magnified by 20.
And so, again, you just cannot assume that the underwriter in Toronto, or Vancouver for that matter, has any idea what it’s like to be here. In fact, most have never been to Saskatchewan and may never. And so again, it’s about documentation. And you cannot assume that, well, they know what it’s like. I mean, yes, we’ve got local markets here that may do a better job, but again, you need to document, you need to spell that stuff out. Or someone’s clicking no on a box that should be yes, which is going to impact your pricing.
If you’re just joining us on this program today, you’re listening to Colin Rooke with Butler Byers and we’re talking about risk mitigation in the commercial insurance world. And we’re talking about snow and your roof and who would’ve thought that.
But Colin, I was really taken by your comment that in the insurance world, snow is a big thing. Really, probably doesn’t go through most people’s mind. Hey, snow happens every year. I mean, what’s the big deal. No, it is a big deal.
Yeah, it is. It’s a rising cause of, in particular liability claims, and it’s getting worse. It’s not quite as bad as cyber but certainly a hot topic. And so whether you’re in commercial or personal lines, we’ve got a lot of documentation and checklists and procedure manuals that are designed to help, not only the end user, but help us explain your approach to snow.
That’s what I wanted to get into. You’re always on this program talking about your step-by-step lists, your risk mitigation programs, your checklists, just basic educational, informational material that’s available to anybody. And they can just dial you up, you’ll send it to them. But do you have checklists for getting ready for winter?
Yeah, absolutely. And something that would come up in a risk reduction workshop would be, how do you handle snow? Do you take care of it yourself, or do you hire a third party? And it’s easy to say, well, Colin, I’m a manufacturing facility, let’s stick to employee engagement and leave. And we have to cover these bases because it’s a big exposure.
And if we don’t know your approach to snow removal and you’re doing it yourself, and there is damage, there is a high likelihood that you will not receive any compensation for that. And so, it’s got to be addressed. And frankly, we in almost all cases, push our clients to outsource that because of the inherent risk.
Well, in going through the background material you gave me in preparation for this program, and in one of the things that caught my attention was, there is actually a policy for getting your car out of a snow bank if you get stuck. You have a vehicle extraction policy. I mean, I defy any business owner in Saskatchewan to show me their written copy of their vehicle extraction policy.
I personally have not ran into a company that has this and you think, well, why do I? Well, again, it’s about showing that you are thinking of everything from a risk mitigation perspective in that, in the event someone goes off the road or can’t get out, you have a document that says what to do, so you don’t do something foolish and cause either damage to yourself, the vehicle, or others.
And in the event that, and accidents do happen, we can show that you did your due diligence. You did what a reasonable person would do to prevent this, which goes a long way when we are trying to explain why there’s a sizeable claim on the file. We can say, look, they did everything they could have, including, they have a vehicle extraction policy.
And sometimes things don’t go well and damage happens. And not that I’m going to go through this vehicle extraction policy line by line but it even says, when you need help, these are the approved third party providers that we want you to call in the event you are stuck. So you don’t get your buddy with some chains, because you don’t want to tell the boss that you’re stuck in some snow.
You have a manual that says, you are to call one of these three businesses. You are authorized to call them. We will not be upset if you did. We want our truck out safely by a professional, not the guy that pulls over that wants to help, but isn’t trained, and certainly isn’t going to foot the bill for any damage.
Colin, I think that we have to wind it up here as we’re out of time, but I think it would be a great challenge to our listeners to say, call Colin, he’ll give you your vehicle extraction policy.
Snow bank extraction policy. It’d be, if you need one, here’s one. So anyway, you’re listening to Colin Rooke, the commercial risk reduction specialist with Butler Byers, providing us with some insight on preparations for winter. Colin, thank you. And thank you to our listeners for joining us for Risky Business. Talk to you next time.