Freedom Convoy

Welcome to Risky Business commercial insurance with Butler Byers. This is Paul Martin, your host and business commentator on CKOM, and joining me today, as always, Colin Rooke, commercial risk reduction specialist with Butler Byers. And Colin, I’m sure people who listen to this show on an ongoing basis, they’re probably about to say, “Oh, those two guys are going to talk cyber again.” Well, we’re going to trick them. We’re not talking cyber today.

We’re going to talk about something that no one has talked about for the last two years, that’s COVID. And you think, well, COVID is a health thing. It’s a political thing. It’s a public safety thing. But I guess it’s also an insurance thing, isn’t it? And this convoy thing brought something right back into focus for us and it was kind of interesting, because maybe a year ago, 18 months ago, we were talking about business interruption insurance, and when my business got shut down because of public health restrictions and stuff, insurance didn’t kick in. Now, if you were in Ottawa or you were down at Coutts, Alberta, or you were at a border crossing in Windsor or something, there’s a good chance, especially in Ottawa, that your business got closed down for a while. I mean, that has also raised its head hasn’t it? It has put that question of business interruption into the minds of the industry again.

Yeah, it’s really funny. If you said, “What are the odds that in over a two-year span, there’d be two major nationwide stories that both would have business interruptions?” So insurance in the forefront, as major exclusions impacting those businesses, I don’t know if this has ever happened before or we’ll see it again, I just never thought that, yet again, a giant gap in business interruption wording, or at least we’d be in a position where you have clients that would expect to receive something that could be told sort of twice in an 18 to 24 month period. That although you feel that there should be coverage, unfortunately, in the wordings, there are exclusions that are very, very relevant to the situation.

Well, who would have guessed as a business owner, if you were in downtown Ottawa, for example, or near Parliament Hill and you think, “I kind of got choice location here because I’m right in the center of everything,” and that you end up with your business being closed by officialdom, basically police cornering off your area, you can’t get in or out, can’t open, there’s no customers can come in and there you are, you did nothing wrong and all of a sudden your business is closed and it’s by fiat from some authority.

Yeah. And even further to that, and we saw this with COVID, what if you close for the safety of yourself and your employees and your customers? So, just like when the pandemic first started, even prior to any sort of information or forced closures, you had businesses saying, “We want to close our door for this because of fear of the unknown,” and then you take this freedom convoy and they’re parked out front and there’s a lot of people, there’s a lot of upset people, there’s concern as to, is this going to continue to escalate? And you say, “I’m going to close my doors and I can’t possibly operate.” Well, you could be in a position where, again, two times in a 24 month period, you would call your broker and say, “I want to put in a business interruption claim,” and unfortunately, there’s nothing for you.

Now, you skip ahead and you say, “Okay, I understood that I voluntarily closed, there’s no damage to my premises, I don’t really like the fact that there’s a pandemic exclusion, but, due to order of civil authority, I had to close. No different than COVID, I was told for the safety of my business, there’s too many protestors, I got to shut down.” Yet again, you’re finding yourself in a position where your policy, I’ll say, in most cases, will not pay because there’s no direct damage as a result. You weren’t forced to close because of damage nearby to your building surrounding area. It has to do with one, the pandemic, and two, the threat of, yes, there’s a concern for safety, but technically, if they didn’t break in, if they haven’t damaged your shop as a result, you’re probably not going to see anything for it. And so, it’s just this unique situation where yet again, you have business owners saying, “My policy should be kicking in to help me,” and yet again, we’re saying, “No, it probably won’t.”

So is there thing that business owners should be aware of, or can be doing, or how are brokers coming at this and how are we responding to these unforeseen and these unexpected kinds of developments?

It’s a good question. And I think the point of this conversation is that it serves as a good wake-up call to the industry itself. The insurance carriers to say, “Okay, well, maybe we have to revisit some very old wordings,” and I think we’ll see that because the more exclusions we see, the more challenges, there’s going to be markets out there that will say, “Okay, as a competitive advantage, I’m going to amend my wording just enough.” And it’s timely, it’s topical with brokers, for one, and our customers to say, “Well, if you’re going to relax your position on this area of business interruption,” I’m guessing that we’re going to get a lot of brokers out there recommending our clients move to this market. And so I think these two scenarios, one, just the pandemic itself, and then now, the Freedom Convoy, I think it’s just a big eye opener that just because it’s always been worded that way, maybe now is the time to revisit and change accordingly.

There are a couple of other big picture trends going on here that I just wonder, Colin, if they’re coloring them too. I mean, I look at Saskatchewan and as a business commentator, I’m just looking at the number of people that are seasoned senior people in our business community who are retiring. Or we’re seeing lots and lots of organizations going through intergenerational transitions at the leadership level. And I’m guessing the insurance industry is no different. And then we have this other thing called the Great Resignation that’s floating around out there about how people are long-time career people are just rethinking their jobs and what they want to do with their lives and they’re just up-and-quitting, basically. Is the insurance industry feeling the same effects, and, if so, does that mean what we were talking about previously about wordings needing to be changed and all that, the old seasoned veterans and the really experienced people may not be around to have some input on that?

Yeah. It’s a big problem in our industry. COVID fatigue is very, very real, but on top of that, we are in the sort of third year of the worst hard market that we’ve had in a very long time. And so, in addition to our customers’ premiums increasing with no rhyme or reason, I mean, there is a rhyme or reason, but it often doesn’t feel like there is. You’ve got overworked senior underwriters that were maybe thinking of calling it a career, however, they’ve got a great routine going. They like the work environment. They like their book of business. They like their clients. And now every single renewal is a fight. Every client is upset. Every broker wants to argue with you.

You’ve got pricing increases that really you can’t explain. You’ve got unhappy customers, unhappy brokers. It’s a lot of extra work. And now you’re displaced. You’re working from home. The insurance company you worked for maybe wasn’t set up for this or slow to adapt. And it’s just easier to say, “You know what, I was thinking of calling it a career anyway, I think I’m just going to do that.” And so without knowing the specific numbers, but due to the industry articles that we’re seeing and just working in the business and learning that this person has resigned, this person has retired, we’re seeing a lot of it. It is a big deal. And from our purposes, we’ve got all this, we’ve got young, new junior underwriters that are expected in a very short time to perform at a senior level. And again, they’re overworked too, but they’re also not seasoned enough, or haven’t been around long enough to make a lot of these calls, for example, around credits or discounting or even class of business. So I think we’re seeing an unfair share of that in this industry. And the result of that is it’s so important to have your story straight. In fact, now, more than ever, when you’re dealing with junior inexperienced staff.

Right, Colin, that’s a really important topic, and I want to pick it up, but we’ve got to take a little break. So we’re going to take a commercial break, be back after this, you’re listening to Risky Business Commercial Insurance with Butler Buyers. Back in a minute.

Welcome back to Risky Business Commercial Insurance with Butler Buyers. Paul Martin here, and joining me is Colin Rooke, commercial risk reduction specialist with Butler Buyers. Colin, just before the break, we were talking about one of these, kind of, waves that seems to be going over society. The so-called Great Resignation that’s the sort of volatility of the labor market, and especially, seasoned people who are saying, “I’m rethinking my career in the wake of COVID and all of the disruptions that came with that,” and you made the comment that the insurance industry is getting more than its fair share of that, and put a little flag up that you’d better become your own best advocate in all of this, because the industry, you’re liable to be sitting across the table from someone who’s somewhat greener or more junior than the seasoned person you would’ve been sitting across the table from even a year ago.

Yeah, absolutely. And if you don’t have the experience, a lot of your authority will be stripped or not available. And so you’re relying on reaching out to upper management, underwriting managers, and they’re overworked themselves. And so if it’s a proper risk managed account, and you’re working with Butler Buyers Insurance on a risk management plan, or let’s say you have not been and you’re just using the traditional approach, if you’re dealing with someone that doesn’t know what they can or cannot do, or what credits could be there or aren’t there, or what kind of leeway they have, it’s our job to make sure, now more than ever, they are armed with the right story to tell.

It used to be, you could talk to the senior underwriter directly and say, “This is where they were, this is where they are now, and this is where they’re going, and this is how we’re going to get there.” And you would explain the risk and they would understand, and they would know, “Based on my book of 40 similar types of businesses in that same category, you’re right. You are ahead of the curve. And here’s what I’m going to do to get this account.” Now, if you’re forced to reach out to a less-experienced underwriter who has been working from home since day one, training has been challenging, it’s all been remote and they’re not sure what they can or can’t do, now you’re relying, there’s another hand in the pot. You’re relying on that underwriter now to sell that story to a senior underwriter or an underwriting manager.

And so the point being is it’s going to take more work than it ever has to convince that market that this is a risk worth fighting for, a risk that you want, because the person on the other end of the phone or the email in this case, doesn’t have the experience to know what’s what. And so any information that you can arm that individual with is going to help long-term. So I would say now it’s more important than ever to focus on the story that’s being told about your company, especially when dealing with less experienced staff in the insurance industry.

Basically, you’re saying you have to be much more proactive as a business owner in terms of becoming your own advocate effectively, and if you don’t do it, there’s no one in the industry who’s got the depth of experience to be able to sort you out from your peers. So, if you’re going to get the best rate and the best coverage, it’s up to you to tell the story that, “I am better and here’s why, than all my peers,” and that’s really what you’ve been advocating since we began this program is the step by step plan, build it up, tell the story, be able to differentiate yourself from your peers, and that’s how you will get better coverage, or maybe in these markets, coverage at all.

Yeah, exactly. So if you’re talking with someone that’s experienced, you could say, “Okay, I’ve got a concrete building I want to insure in Eston, Saskatchewan.” And you could be talking to someone that’s had 40 years in the industry saying, “Something about the ground, or I don’t know where, in all my years I’ve never had a fire. Yeah, there’s a lot of wind, but for whatever reason, those buildings are built solid. I know them well, I’m going to take a chance on this building. I’ve been there before and I’m comfortable with it.” But now if you’re dealing with someone that’s junior and they say, “Not only have I never heard of Eston, Saskatchewan, I don’t have any familiarity with the region and certainly not any building or structures in that area.”

It’s our job to convince them that it’s a great risk because they’re not coming from a place of knowing. It’s one thing if they already have a pretty good idea, it’s another when they don’t really at all. And so the selling of the risk of the account is so much more important. And now, the example I just gave would even assume that maybe the underwriter is from Saskatchewan, but what if you’re dealing with a junior underwriter in Toronto that has never been to the prairies, let alone the specific location that you’re dealing with? And so the story, the risk management plan, what gets this client from good to great, is vital because you’re now going to rely, potentially, on that underwriter to upsell this to someone else that you may or may not even have an opportunity to speak with.

An interesting conundrum, but at the end of the day, it’s really about your broker. If you’re buying insurance, it has to be more than someone who just takes quotes for you.

Yeah, I guess what I’m trying to say is that it’s really easy to put no effort into the pricing of an account. There’s computer programs that tell you what the rates should be, and if that’s all you’re looking for, then any underwriter can take your submission and tell you what the program says the price for the risk should be. So, if you are average at best and certainly below average, then don’t waste your time. Don’t put the work in and accept the pricing because that’s what it’s designed to do. But if you consider yourself best-in-class or certainly working to get there, and you say, “I put a lot of work in, we’re a great company. I feel that we’re deserving of credits and discounts,” then you have to pay particular attention to what’s being said about your company, and the insurance application is not going to do it for you.

Colin, we’ve run out of time, as always, we just seem to blast through these things, and I think the point we reinforce here is you and your team are available for people who are listening to this and think, “Yeah, I am above average and I want to advocate for myself and protect my own interests.” You’ll be more than willing to have a free consultation with them.

Yeah, absolutely.

You’ve been listening to Colin Rooke, commercial risk reduction specialist with Butler Byers, commercial insurance. I’m Paul Martin. Thanks for joining us. This is Risky Business. Talk to you next time.