“Hire us and we’ll pay your insurance deductible!”

“Hire us and we’ll pay your insurance deductible!”
Ever seen an advertisement like this as an incentive to hire Contractor A versus Contractor B?  I bet many commercial property adjusters have heard about this incentive and have been asked whether this is legal.
Well, in many states it is legal for contractors to solicit commercial business by making the same or similar offer.  However, Missouri Legislators have taken a step forward to stop this type of advertising and to provide commercial consumers with the upper hand as the article below demonstrates:

Emerging Issues: Marijuana, Fires & Explosions

There is obviously a trend today to legalize the use of marijuana for medical treatments and to assist those undergoing chemotherapy treatments for cancer. These are positive steps for those involved. 


However, in Colorado and Washington, not only has the medical use been decriminalized by these states, but its general use has also been legalized. 
As a result of the legalization of marijuana for general use, users and purveyors are seeking stronger alternatives to smoking or ingesting the flowers, leaves and stems of the plant. One such alternative is the production of “hash oil” or “honey oil”. This alternative has raised great concern because it is produced by pouring butane through the marijuana. Yes, butane. As a result, there are new variety of coverage questions emerging that the article Marijuana, Fires & Explosions by Thomas Mallin, President & CEO of Property Loss Research Bureau, has summarized for all adjusters.

Coming Next Week: Raiders of the Lost Profits

In this series, we will explore some of the simple steps to assuring the successful inspection of commercial risks that will be an invaluable service to Provencher clients and your Provencher Business Interruption Unit.
JULY 1, 2014
Introduction: Introduction to Inspection for BI
Part One: The Secrets of Daily Loss Inspection
Part Two: Adventures in CAT Inspections
Part Three: Search for the Grail:Covered Cause of Loss vs. Actual Cause of Loss
Part Four: Pit of Snakes:  Establishing Period of Restoration
Part Five: Reporting to HQ:  Here’s What We Know So Far

Report Writing the Provencher Way: Part 4 – Report Captions Continued

In our ongoing effort to maintain and continuously improve our business, we have taken the time to document proper report writing specifics to Provencher & Company.  The intent of this post is to describe a standardized content look for a Provencher & Company captioned report.  Below, you will see that we have defined the purpose/meaning of each caption and provided an example of the report writing style and expected technical writing level of the content.

As this is such an important topic; one that requires great attention and detail, the Report Captions section of this series has been divided into three parts.

Report Captions Continued:

In this caption, you need to state in a clear concise manner, the facts associated with the loss adjustment. While this caption needs to contain the story of the loss, do not, under any circumstances, write in such a fashion that it appears to be folksy, conversational, repetitive, or opinionated.  Additionally, do not, under any circumstances, attempt to restate anything prepared by an expert you or the client has employed.  Refer the client to the expert’s report, along with a comment regarding the summary finding.
Example of Adjustment Caption Verbiage:
We are enclosing sample photographs of the damage.  We are also attaching our estimate on the remaining repairs.  Our estimate will detail the scope of damage found during our inspection.  Sixteen offices, two baths, a kitchen and a long hallway were damaged by water.
Our damage estimate totals $25,188.14 and is based on normal and reasonable unit prices for this area.  We believe that the cost for repairs and painting will probably not exceed this amount.  Our contact, Mr. McClay, advised that he has an estimate in process for the repairs but has not as yet forwarded it to us.  You should note that our estimate is conservative for painting all surfaces and does not include any allowances for moving and/or protecting furnishings.  We believe that the insured will get the painting done on only the effected walls and may not expend the entire amount in our estimate.
We Clean Systems, Inc. was used for water extraction and drying.  We have a copy of the work authorization but no estimate or invoice has been received to date.  We have requested the information from your insured and hope to get it shortly.
Kittleburger Plumbing made repairs to the plumbing and we have their invoice for the repairs.  The cost for the repairs was $102.50. Lock Technology was contacted to replace a broken lock cylinder on the front door and rekey another cylinder to match the one on the front door that was broken to gain emergency entry in off hours.   The cost was $417.19.
Barclay Electric was used to replace a phone jack and blocked off some floor boxes to prevent additional damage.  No invoice has been provided.
Business Interruption:
At Provencher & Company, we have a separate Business Interruption division, which includes a Forensic Accounting expert that is responsible for managing and reporting on all losses with a BI exposure.  That office will work in concert with you, the field adjuster.   While the BI staff will conduct a comprehensive interview with the insured and request all financial documentation, we need you in the field to determine the Covered Cause(s) of Loss, establish the Period of Restoration (POR), and initial control of Extra Expense (EE).  If there is no suspension of the insured’s business, that should be documented in your report and why.  That can be accomplished all in one caption entitled Business Interruption.
Example of Business Interruption Caption Verbiage (no loss of income claimed): 
While the insured risk did sustain wind damage to the roof, allowing water to enter into the premises damaging walls and floors, the insured is not filing claim for loss of income. They were able to open immediately and resumed operations working around the affected areas.
If you are assigned a claim that has a BI exposure, please insert the following captions into your report template:
(Refer to the Business Interruption – Interface with the Property Adjuster document for details on workflow)
Cause of loss – Business Income:
For all commercial losses that have BI coverage and either a partial or complete suspension of their business operation has occurred, you must identify and document what cause(s) actuates the coverage.   Be brief, clear and factual. Note that most policies require direct physical damage to the insured’s business space, even if not covered property, caused by a Covered Cause of Loss. Even if only the BPP is covered property under the policy, the physical damage to the building will guide both the actuation of the coverage and the period of restoration as long as it was from a covered cause.  Note that even if BI/EE coverage may not be apparent, a claim by the insured may be submitted.  Therefore, we prefer to be proactive in identifying if a covered cause of loss exists should coverage be found.
Examples of Cause of Loss for BI Caption Verbiage:
The roof of the building, occupied by the insured business, was severely damaged by wind.  As a result, the insured’s business suffered extensive water damage to the interior of their space resulting in a complete suspension of their business operations.
Another Example
While the insured did sustain direct physical damage to their space from wind damage to the roof, the physical damage to the insured’s space is not sufficient to shut down operations.   The reason the insured could not operate was due to off-premises power outage which is not covered by this policy.
Another Example
The insured’s operations were suspended due to wind driven rain, a non-covered cause of loss, which entered the building through an open window.
Period of Restoration – Business Income:
The ‘period of restoration’ is the reasonable length of time necessary to restore full business operations due to the covered cause of loss that actuates the BI coverage.  This is very important as you may have an area damaged by a covered cause of loss and other areas damaged by non- covered causes of loss – this needs to be clearly identified as the POR is only established for covered cause(s) of loss.
If the insured is a tenant in the building, we still need to know the extent of damage to the building and length of time anticipated to affect repairs due to the covered cause of loss.  This is critical as that will be the governing factor in determining in the length of time for which a business income claim will be considered for payment – not just the time required to affect repairs to the insured’s covered property. The POR is not simply established based on the amount of time the insured is out of operation.
Examples of Period of Restoration for BI Caption Verbiage:
The period of restoration for repairs is three months.   However, the insured should be able to utilize the undamaged portion of the building to continue operations, in full or in part, while the repairs are being undertaken.
Another Example
The period of restoration is six months.  Due to the nature of the insured’s business, temporary relocation is not feasible.
Another Example
The period of restoration is six months, but the insured may be able to relocate the operation to temporary facilities.
Another Example
While it is anticipated the insured’s operations will be completely suspended for a total of six months, we are only establishing a period of restoration of three months as this is the anticipated length of time necessary to complete repairs resulting from the covered cause of loss.  The flood damage to the building is a non-covered cause of loss which is the contributing factor to the extended period of time the insured’s operations have been suspended.
Extra Expense – Business Income:
With the exception of the CP 0050 (specific to EE coverage), most policies that include this coverage limit the use of Extra Expenses to the amount by which it reduces the BI loss.  As such, your narrative in this caption must clearly demonstrate the need or prudence for using this coverage.
Example of Extra Expense for BI Caption Verbiage:
The insured will be able to expedite the clean-up process through the use of their employees which will require payroll in excess of normal.
Another Example
Since the period of restoration is six months, the insured will likely opt to move into temporary quarters in order to preserve their customer base.
Another Example
Because of the refitting necessary to accommodate their equipment, it is not feasible for the insured to move to temporary quarters.  However, the use of expediting expenses for the damaged equipment and replacement of inventory should reduce the period of restoration of six months to a period of suspension of four months.
To Be Done:
In this caption, you need to clearly and concisely tell the client what tasks remain outstanding in order to bring the file to a timely and successful conclusion.  If there are multiple items that still remain to be done, this may be best demonstrated in a bulleted format.
Again, you must demonstrate to the client you are in control of the adjustment and have clear direction on how and what needs to be done to bring the case to a timely and successful close. We point this out because this is often where adjusters make a huge leap of faith which can be fatal.
You feel that because you know what you’re doing and what needs to be done, the client feels the same way.  Generally speaking, that’s not true or more importantly their boss who may be reading your report may not know you at all.  Do not simply state (as we often see) “Please diary your file ahead 30 days for our next report” as that adds no value and more than likely will force the person reviewing the file to write or call you to find out your action plan or even worse, ask for the case be reassigned to expedite closure.
Example of the To Be Done Captioned List Verbiage:
1.   Obtain all outstanding invoices.
2.   Once all invoices are received, compare against amount allowed.
3.   Secure copy of the engineering report.
4.   Secure agreed price with insured.
In this caption you will make any necessary recommendations for action on the part of the client. If you are requesting an advance payment, correspondence on their part that needs to be issued, etc. would all go under this caption.
Example of Recommendation Caption Verbiage:
After application of the policy deductible, final payment is recommended in the amount of $1,465.83 as follows (see attached Statement of Loss for details):
           Net claim         (Advanced)      Final Payment
           $41,465.83  $40,000.00      $1,465.83
Due  to  the  small  amount  of  existent  claim  payment  due,  I  would  not recommend including mortgagee or the loss payee on final check.  Loss was adjusted with Operations Manager, Mr. McClay.  Check should be issued in the name of your insured, Stevens & Sons, LLC and sent directly to:
          Stevens & Sons, LLC Mr. John Jasper
          Owner & General Manager
          2010 Blue St. Westlake, OH 44145
If your report is a final report, you want to conclude your recommendations with a professional conclusion.  Remember, this is a report, not a letter. Reports are directed to a file, not addressed like a letter, nor signed like a letter.  The pre-filled captions at the top of the report identify the file to which this report is directed.  Your name and title go at the end of the report attesting to this being your work product.
Example of the File Conclusion Caption Verbiage: Recommendations:
This concludes the adjustment of this loss.  We are closing our file. Thank you for the assignment.
(Your Name) 
(Your Title)
(Your Provencher Email)
(Your Cell Phone)

Report Writing Tips
Now that you have the report structure guidelines ala Provencher & Company, we would like to close with a mini flashback to your grade school and middle school grammar and writing classes with a few bad habits we adults have picked up in our business writing.  Please don’t let this happen to you!
Basic Rules of Grammar and Structure
•Maximum length of a paragraph is eight lines.  If it is more than eight lines, break into two paragraphs, or re-read it and eliminate extraneous words.
•A paragraph should focus on one subject. A paragraph that is too long is unreadable.
•A paragraph consisting of only one sentence is usually improper and needs to be edited by expanding the thought, eliminating it or adding it somewhere else in the document.
•Use consistent spacing throughout report. Block alignment provides best overall appearance.  Make sure the selected font size is not too big or small; 11 or 12 point font works best for business writing.
•Try not to use the word “and” more than once in the same sentence.
•If you find you have a lot of commas in one sentence, consider breaking it into more than one sentence.
•Sentences that meander endlessly are impossible to follow.
•Single digit numbers are to be spelled out, “two” instead of “2”, while double digit numbers are to be displayed in numeric form, “37” rather than “thirty seven”.   Write “first” instead of 1st.  If you are beginning a sentence with a number, always spell it as a word.
•Don’t type over old reports because you are too lazy to start a new one.   This is how incorrect information gets transferred!
•Read your report aloud to see how it sounds.
•Use Spell Check and the on-line dictionary! Howe embarrassing 2 git to cart wit misspelled words on yur repert!  Also keep in mind Spell Check cannot pick up on misspelled words if the misspelled word is a real word, i.e., two versus too – proofing your work is critical!

Contributed by:
Julie Rock-Chatellier


Webinar Wednesday: Florida CEU – Claims Resolution

Claims Resolution is designed to provide an in-depth analysis and explanation of one of the most important elements of  property and liability claims adjusting: resolution. As this course shows, many factors are involved in resolving a claim—that is, bringing the claim process to a conclusion. Two key factors to which much of this course is devoted involve negotiation and litigation. The course also examines the important topic of ethical claims handling.  
The course includes the following chapters:
  • Duties and Process
  • Negotiation 
  • Litigation
  • Recoveries
  • Ethics
*Please note: This posting is for informational purposes only, as a courtesy to our reading audience. Provencher & Company has in no way been compensated for the sharing of this information. The use of or enrollment in any classes, seminars, training, etc. in no way constitutes or implies any endorsement of the provider of said programs. Provencher & Company shares no financial obligation to attendee or organizer.

Impact of Improperly Adjusting a Claim

As human beings, adjusters occasionally make mistakes that go unnoticed by their clients or supervisors.  However, failure to properly adjust a claim can sometimes bite back. Take the subrogation case addressed here. 

Although the Plaintiff Insurance Company and their Insureds won on liability, they ended up paying more in costs then they recovered in damages because they failed to identify the errors in their alleged damages.  This is a cautionary tale for both adjusters, subrogation departments and their attorneys.

Contributed by:
Brian Single
Sr. Claims Examiner


Are You the "Ant" or the "Grasshopper"?

Remember the story of the ant and the grasshopper? The ant worked hard all summer, gathering wheat grains to store for winter. And the grasshopper? He just hopped around, enjoying the sunshine and laughing at that sweaty ant. Well, once winter hit, the grasshopper wasn’t laughing, but was cold and miserable and hungry. And the ant? He had plenty of food and could now toast his toes in front of his warm fire.
The point is, instead of waiting for January 1 to make your next set of New Year’s resolutions, start now working on those you made eight months ago, working on the principle that there is no time like the present. Here are four quick tasks to undertake—one for each week of this coming month—to get your financial life under control and heading in the right direction. (You’re on your own with the diet and exercising!)
1. Start saving now. Have a set amount of money deducted from your paycheck and sent directly to a “don’t touch no matter what” savings account. Self-employed? Do your own auto-deduction from your checking account. (Bonus tip: save your change and once a month, make a coin drop to your account. Or go even further: Don’t spend those one dollar bills but instead save them. When you get 10, deposit them. It’s amazing how quickly your savings balance will grow!)
2. Review your life, business, auto and home policies. Do you have enough coverage—and the right kind? Can you increase your deductibles to save a few dollars? Do you need to add any extra options, riders or increase existing coverage amounts? Schedule a session with your insurance agent for a complete evaluation of your existing policies. 
3. Pull your credit score. Go to Annual Credit Report  —one central site where you can request a free credit file disclosure (also called a credit report) once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. Look for any errors or unexpected information and then get it corrected—ASAP!
4. Create a workable financial plan. Do you know where your money goes each month? Take a look at your income and outgo. Are there expenses you can reduce or eliminate? If so, use the extra money to either pay down debt or save for a rainy day. Consider the “Latte Factor”: the concept that many small purchases can add up to a significant expenditure over time. For example, a $3 coffee five days a week is an expenditure of $780 a year. Settle for a regular cup of joe at half the price, save the rest and, at minimum without factoring in interest, you’ll have $390. Every little bit helps, whether it’s spending more or adding more to your monthly payments.
Excerpted from Life Happens