Natural Disasters

A Tale of Two Cities What do Charles Dickens and rain barrels have in common? Nothing, until just recently, when IBC Chair Michael J. Donoghue, Allstate President and CEO, conjured both during a visual feast of a luncheon address at the National Insurance Conference of Canada, on October 2, 2008. Entitled “Tale of Two Cities”, the presentation highlighted London, England and London, Ontario as two cities at the forefront of adaptation to climate change. Donoghue stressed the industry’s important role in adaptation, and demonstrated how the wide-spread use of rain barrels by homeowners could significantly reduce the burden on Canada’s aging and overwhelmed sewer systems. Click here to watch this presentation.

It is no secret that the frequency and impact of natural disasters are on the rise worldwide. Earthquakes, hurricanes, tsunamis, forest fires, tornados, ice storms and severe rain storms are happening more often than ever before, and costing us more dearly.

Canada is not immune to this trend. Many of us remember the devastation of Hurricane Juan, which hit Nova Scotia and Prince Edward Island in 2003, and the sheer horror of the forest fires that swept across British Columbia the following summer. In 2005, Toronto and the surrounding area were hit with a severe rainstorm and tornadoes that led to the second-largest insurance payout in Canada’s history. The largest Canadian disaster was the ice storm of 1998.

Through all these disasters, Canada’s home, car and business insurers have been there to help Canadians get back on their feet. They have also been leading efforts to help lessen the impact of disasters on people’s lives. Through their involvement with research organizations such as the , their work in helping to raise public awareness and their advocacy of a national Natural Disaster Reduction Plan, insurers are doing their part to protect Canadians from the worst that nature can throw our way.

Do you have a question about business insurance?

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Watch this space for the answers to some of the most frequently asked questions.

Q. For the last year, I have been running a home-based business providing graphic- and web-design services. I rarely have clients come to my home. Instead, we usually meet at a coffee shop or at the client's office. Things are just starting to ramp up, but my revenue is still low. I'm not sure what kind of insurance I need or what I can afford. What do you recommend? A. Even when clients do not enter your home, your business still faces a liability risk. For example, if you leave the electrical cord for your computer on the floor at a client's office and somebody trips and falls, hitting his or her head on a table on the way down, you could be found liable for the accident. Having to pay the costs related to an incident like this could potentially put you out of business. Liability insurance protects your business in case you do something, or fail to do something, that causes injury to someone or damage to someone's property. Because of the potential size of a liability claim, it is crucial that you obtain this kind of insurance for your business. You may also want to obtain insurance for the equipment (computers, printers, etc.) that you use to run your business. Coverage for losses related to computer malfunctions is also available. Finally, keep in mind that your homeowner's or tenant's insurance will not cover any losses arising from business activities that you undertake. Talk to a broker or your insurance provider to find out what amount of coverage is appropriate for your business. Q. I am about to open a small store selling old-fashioned candy, but I'm not sure what kind of insurance I need. Someone mentioned "business interruption insurance." What does that involve? A. Business-interruption insurance can help keep your business from going sour if something happens to your store and/or your stock. For example, if a fire damaged your building and all that candy went up in smoke, this insurance would cover your loss of earnings until the building was restored and you were back in business. There are several kinds of business-interruption policies. Just like your home insurance, the policy can be either "named perils" or "all risk." Named perils covers losses caused by perils that are listed, or "named," in your policy; all risk provides protection against loss caused by any risk that is not specifically EXCLUDED (not covered) in your policy. But just as important as the perils that the policy insures against is the period of time that it will pay for loss of business, called the "indemnity period." One kind of policy -- often called a "gross earnings" -- pays only until the property or damage is replaced or repaired, or the stock is replaced. As soon as the business resumes, the policy stops paying, even if you haven't regained your previous level of earnings. Let's say you were out of business for two months due to an explosion in your building. During that time, your competitors may have snapped up many of your customers. Therefore, when your business resumes, you will not be operating at the same level as you were before the explosion, and yet your insurance will have stopped paying. Another version of this policy limits not only the period of time you can be covered, but also the amount payable in any one month. Although these kinds of policies are cheaper, they may not be adequate for your needs. A "profits form" policy, on the other hand, continues to pay until your business resumes its normal, pre-interruption level, subject to the maximum period of indemnity. This kind of policy is more expensive, but may be well worth the price for many businesses. Some business people may also need "extra expense insurance." This type of policy, designed for businesses that must remain operational during the period they are affected by damage, covers extra expenses that may be incurred in order to do so, like moving to other premises temporarily, or outsourcing work. This type of insurance may be more applicable to offices and other "movable" businesses, such as consulting firms and other service businesses. The coverage you need depends on the kind of business you operate. Discuss it with your insurance provider and get your policy in place, before you open the doors of your candy store. Then, should disaster strike, it won't leave such a bitter taste in your mouth. Q. I am an independent consultant working in the pharmaceutical/biological sector. I supply management advice and support for project management and quality systems. I have been asked to supply my company's financial records in support of a commercial liability policy. Is this common practice in the insurance industry? If so, why? This information cannot possibly help an insurer assess the risk of me making an actionable error. A. Due to the nature of your business, it seems that you have a fairly high liability exposure because any client acting on your advice would hold you accountable if that advice led to a problem. The question facing any underwriter is: How much should a business person pay for liability protection? In many cases it is best to base premiums on the amount of business you do. To get an accurate figure, the insurer is asking for a look at your books. There is nothing that says you must comply with the insurer’s request, but, if you refuse, the insurer is not required to provide you with insurance. It is possible that another insurer would base your premium on some other criteria. There is no set rule that applies to all insurers in this type of situation. If you would rather not share your financial records, it may be worth your while to shop around. In terms of the amount of coverage you will need, you should note that insurers do not normally insure a business for anything less than $1 million in liability coverage. Talk to a broker or your insurance provider to find out what amount of coverage is appropriate for your business.

Special Markets

Some insurance companies have developed special products to serve the needs of business and volunteer groups. There are a number of on-line databases that collect and distribute the names of insurance representatives and the types of commercial insurance in which they specialize. Here are the links to just four:

These databases are for your information, but should not be your only means of seeking out coverage. Please consult your current insurance representative with questions about your specific insurance needs.

encounter that may increase risks

• Are there any situations that the volunteer may encounter that may increase risks of loss or negligence (e.g., transporting children)? If yes, is more screening required?
• Will the volunteer be in a position of trust due to a relationship of trust, dependency, authority or reliance? If so, is more screening required?

5. Require applicants to complete standardized forms outlining their skills and experience, and contact information for at least three references.

6. Interview qualified volunteers prior to making selections. Interview questions should be designed to gain a greater understanding of experience, skills and attitudes.

• Does this candidate have skills, values and a personality that align with the position and the organization?
• Is this person aware of the risks involved with the position? Will this person commit to taking reasonable precautions to control risks?
• Describe the position and organization, as well as orientation, training, supervision and evaluation requirements.

7. Request a police record check for all applicants who may be in a position of trust, working with vulnerable persons, dealing with confidential material, etc. The applicants may acquire and submit the records themselves or the organization may obtain a record with written permission from the applicant. If an applicant has committed an offense, several factors must be considered to determine whether the offense is relevant to the applicant’s ability to perform the volunteer position:

• the age of the person at the time of the illegal act;
• the amount of time that has passed since the illegal act;
• attempts at rehabilitation;
• the circumstances surrounding the conviction and the likelihood that the offender will re-offend; and
• whether the offender presents a threat to the organization to carry on its business safely and efficiently.

Do not under any circumstances allow a convicted sex offender to work with children.

8. Consider creating a database of all potential volunteers so it is easy to search a list of volunteers by qualifications, experience or other characteristics when recruitment is necessary. This will help ensure that the right qualifications are matched with the requirements of the available volunteer position.

9. Develop standards of behaviour that volunteers must follow.

• Require volunteers to sign a contract regarding length of service, duties, confidentiality requirements, etc.
• Require volunteers to read and sign all organizational policies that affect their positions.
• Where vulnerable clients are involved, establish organizational policies to ensure volunteers always work in teams; that is, they are not put at risk of being alone with others.

10. Conduct orientation sessions to introduce volunteers to the organization’s risk management policies and procedures.

11. Provide volunteer training for the tasks they will be required to perform. Do not place a volunteer in a position for which he/she is not trained.

• If driving is required as part of a position, consider enrolling volunteers in defensive driving courses.
• Provide refresher training courses regularly. The frequency will depend on the situation, but check into best practices used by similar organizations for training in the same skills/operations. For example, CPR and lifeguard recertification are required at specific regular intervals.

12. Place volunteers on probation for the first three months.

• Provide supervision.
• Extend probation if any problems occur or complaints are received.
• Evaluate the need for additional training.

13. Consider the use of photo ID badges for volunteers to be used at all times while performing volunteer activities.

14. Conduct volunteer performance evaluations regularly (perhaps semi-annually or annually) to discuss volunteer progress and performance.

15. Collect feedback from those who receive services from volunteers to identify trends in volunteer achievements and weaknesses.

16. Investigate any complaints obtained from those receiving a volunteer’s services.

17. Always document any concerns about volunteer performance. Develop a policy for discipline and dismissal of volunteers where appropriate for the protection of the organization, other volunteers, and the users/recipients of your services. Be very careful in this regard and seek legal advice, as improper discipline or dismissal could result in liabilities to the organization.

18. Reward volunteers for good performance. Rewards do not have to be tangible – even verbal recognition at an event or meeting is sufficient if your budget does not allow for prizes.

19. There is volunteer screening training available at organizations across Canada.

Volunteer Selection, Screening and Training*

For the purpose of this document, volunteers may be considered to be in two broad general categories:

• Governance Volunteers – These are volunteers who work in a leadership capacity, such as directors and officers, or in an advisory capacity.
• Operational Volunteers – These are volunteers who work directly in operating the organization, such as fundraisers, and anyone else involved in a non-governing way.

Volunteers are essential to many organizations, whether used on a day-to-day basis, for special events or some other purpose. Organizations have a duty to protect staff, volunteers, members, patrons, clients, etc. from harm. The proper screening and training of volunteers is essential to meeting that required standard of care. Governance and Operational Volunteers can be a source of liability to your organization if they:

• are criminals, such as sex offenders, or could be harmful to persons who receive volunteer services;
• damage property belonging to your organization or a third party;
• cause injury to a third party. This includes more than just physical injury; sexual harassment and slander are also forms of injury;
• injure themselves; and/or
• commit a criminal offense.

Risk Management

1. Seek legal advice regarding the rights and obligations that your organization and your volunteers have (see also ). Rights and obligations may vary depending on what province(s) you operate in, the type of organization, the operations being conducted, etc. Consider such issues as:

• Will your organization be liable for the actions of volunteers, whether they are governance or operational?
• What steps can you take or are you taking to protect against these liabilities?
• Do you carry the appropriate insurance for these liabilities? Ask your insurance representative.

2. Develop a policy for screening (click here for a sample), including:

• Who will be responsible for screening.
• What/how much training is required for screening.
• How information obtained in the screening process will be maintained and used.
• How the privacy of volunteers will be maintained.

3. Create a description for each available volunteer position that identifies preferred qualifications and responsibilities and screening requirements.

4. Determine the amount of screening required for each position by considering:

• Will the volunteer interact with vulnerable persons (i.e., children, elderly persons, handicapped persons)? If yes, is more screening required?
• Will the volunteer have supervision and/or be working with a large group? Is more screening required if he/she is working under little supervision or by him/herself?

Sports and Recreation*

Bodily injuries are common in sports and recreation areas.

Legal Liability

Common sources of legal action involving sports and recreation include:

• Occupiers’ Liability – Occupiers are people that own the premises, have possession of it or have responsibility and control over it. They must keep the premises reasonably safe to prevent injury. For example, if a person is injured while using faulty equipment, the “occupier” may be held responsible.


• Vicarious Liability – An organization is liable for the negligent actions of its employees and/or volunteers. Therefore, if the organization assigns a supervisor to look after people using sports or recreational equipment, and the supervisor’s negligence results in someone getting hurt, the organization may be held responsible.

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Risk Management

There are many actions that can be taken to prevent or decrease the seriousness of injuries.

1. Ensure the design of the sports and recreational facility is appropriate for the people who use the equipment.

2. Ensure equipment meets the standards set by the Canadian Standards Association (see

3. Determine an appropriate supervisor-to-user ratio. The appropriate ratio will depend on the type of activity, the equipment being used, the age of the participants, etc.

4. Screen patrons for health limitations that may make it unsafe for them to participate in your program.

5. Use signs to warn patrons of hazards. Signs should use symbols and French and English text where possible.

6. Implement a screening and hiring policy to ensure that you employ only qualified people. Refer to “ .”

7. Ensure that volunteers and staff have adequate training in first-aid, coaching, organization policies and procedures, and any other training that is appropriate.

8. Adhere to national, provincial or governing body regulations concerning the conduct of operations.

9. Ensure the facilities and equipment are regularly inspected for damage and repaired or replaced as necessary. There are professional consultants that you can hire to periodically inspect equipment.

• Develop an inspection schedule. For example, employees or volunteers may perform daily inspections and a qualified inspector may perform more formal monthly inspections. The frequency of inspections and the level of expertise required will vary across facilities.
• Design a sports and recreation inspection form that reflects the existing equipment and layout. (
  
• Train inspectors and/or employees/volunteers in standards.
• Provide appropriate inspection and maintenance tools to employees/volunteers who are responsible for maintenance. For example, ensure that someone who inspects your sports fields has your organization’s Sports Fields Daily Inspection Form.
• Develop procedures for documentation and filing. Keep records of the dates of inspections, who conducted each inspection, the findings, and the maintenance done.
• Develop follow-up plans (i.e., inspection of completed repairs, continuous training/review of employees, etc.).

10. During inspection and maintenance, ensure that:

• handrails, barriers and railings are sturdy enough to prevent falls;
• broken glass, garbage, sharp edges, bolts and other hazards that may be present are removed;
• paint is not cracking, peeling, or flaking;
• damaged or defective equipment is repaired or removed;
• landing areas are constantly maintained (landing areas are high-use areas that often have materials that erode);
• equipment is checked for signs of wear and tear; and
• first-aid kits, fire extinguishers and other safety equipment are in place and in good condition.

11. Encourage people using the sports and recreation facility to pre-inspect the grounds for obvious hazards.

12. Ensure users are wearing appropriate clothing and equipment.

13. Post signs indicating the hours of operation, operating procedures, where problems or concerns should be directed and any other relevant information.

14. Use waivers or informed consent forms. These are legal forms intended to protect your organization from liabilities either by requiring people to waive their rights to sue or by clearly informing them of the hazards and having them accept them willingly. Always consult a lawyer to develop legal forms.

15. Develop emergency and accident-response procedures and implement them as written policy. Provide all staff and volunteers with copies of and training in these procedures. Conduct drills to test these procedures.

16. Use a sign-in log (if waivers or consent forms cannot be used). At the top of the log include information about potential hazards to which users may be exposed. A sign-in log can also help you keep track of the:

• time and date the users enter and exit;
• names of users; and
• emergency contact names and phone numbers.

Claims Handling

1. Assist the injured person in finding medical treatment. For example, call an ambulance if necessary.

2. Where applicable, immediately remove or repair the hazard that may have caused or contributed to the incident. If the hazard cannot be removed or repaired immediately, either ensure the area is safe for others or make it inaccessible before you leave.

3. Record names and contact information of any witnesses. Obtain and record detailed descriptions of the incident from the victim and witnesses.

4. Refer any discussions with the claimant to your insurer. It is wise to tell employees and/or volunteers that they should not discuss liability with potential claimants and that they should NEVER ADMIT LIABILITY!!!

5. Take pictures of the area where the incident occurred.

6. Complete an incident report. Documenting the incident may help to establish a defense for a claim presented at a later date, help analyze the cause of the incident and help recommend risk management improvements to prevent similar incidents in the future.

7. Contact your insurance representative regarding all accidents and incidents that could potentially result in an injury claim.

8. Investigate potential causes and take steps to prevent and/or respond better to similar incidents in the future.

Additional Resources

• McGregor, Ian. (2000). SportRisk: The Ultimate Risk Management Planning and Resource Manual. San Rafael, CA: McGregor and Associates.
• National Fitness Leadership Advisory Committee. (1990-1991). Legal Liability: Considerations for the Fitness Leader. Ottawa: National Fitness Leadership Advisory Committee.
• Peterson, J. (2003). Risk Management Park, Recreation and Leisure Services. Champaign, IL.: Sagamore Publishing.

Special Events*

Often, organizations are involved in special events either as the event manager/operator or an event sponsor. Not-for-profit organizations often rely heavily on special events for fundraising. There are many risks associated with special events, including:

• Injury risks – Employees, volunteers, persons who attend the event, etc. may be injured during the event. These events often include high-risk activities such as alcohol service, fireworks, children’s rides/games, etc.


• Reputation risks – If situations are not handled well, the organization’s reputation may be damaged.
• Financial risks – Events usually require a large amount of funding. If events are not administered with care, this may affect the amount of financial support that may be received. Events may also be cancelled due to weather or other unforeseen events.

Legal Liability

As an occupier of a premises, you and your organization are responsible for the safety of those attending the event. Occupiers must protect patrons from all foreseeable harm. Extra precautions must be taken if:

• Alcohol is served.
• Children/minors are in attendance.
• Dangerous/hazardous activities are undertaken such as fireworks, boating, and some sports.
• Gambling is involved.
• Large crowds are in attendance.

Applicable permits should always be obtained from your municipal/provincial government to reduce liability relating to violations involving permits. Health requirements should also be followed. Contact your local government for more information regarding your responsibilities regarding special events.

Risk Management

Key Point Make sure that you know and understand all of the risks associated with your event and take steps to prevent or mitigate them.

1. Understand the risks involved in the event:

Does the event involve physical activities? Performing physical activities may require medical examination forms, waivers and/or informed consent to be completed. Is food served at the event? Additional risks exist when food is cooked and/or served, such as employee/volunteer injuries (burns, etc.), food poisoning, fires, etc. Is traveling required? If so, what type of transportation will be used (e.g., bus, automobile, plane, etc.)? Risks associated with travelling include transportation accidents (collisions, etc.), delays, passenger safety, etc. Is the event outdoors? Consider such risks as weather (make contingency plans) and use of temporary structures. Will alcohol be served? More risks are involved with patron and public safety when alcohol is served. See Liquor Liability for more information. Are there any activities that may be contracted out? Contracting may decrease control and decrease risk. However, in order for risk to be effectively transferred, an appropriate contract, including a hold harmless and indemnification clause, must be drafted. The third party should have the financial resources to cover losses that may occur (or purchase insurance). Other conditions may be required for risk to be effectively transferred. Consult a lawyer for more details. You may want to sign a hold harmless and indemnification agreement stating that the organizers will not be responsible for property damage and/or injuries and that the third party will indemnify the organizers for any claims due to the third party’s negligence. Consult a lawyer for more information. Request an insurance certificate from the contractor as evidence of liability insurance. Make sure the insurance certificate names your organization as an additional insured and that it also contains a cross-liability clause. Consult an insurance representative for more information. Will there be minors attending the event? Occupiers owe a higher standard of care to minors. Often, events with minors in attendance require more supervision and security. Is there cash stored on the premises? Financial management procedures must be considered if cash is present. Theft is a serious issue.

2. Facilities should be appropriate for the event and may not be appropriate if they prevent your event from occurring. For example, bad weather, inadequate space for participants or lack of equipment may prevent an event from occurring.

3. Contact your insurance representative. Let him/her know all the details of the event and get confirmation that the event is covered. If not, purchase insurance and/or ensure all parties/organizations involved in the event have purchased insurance.

4. Design a site map. The site map should identify all exits and entrances, first-aid stations, temporary structures, beer gardens, barricades/pylons/fencing, portable washrooms, fireworks, emergency vehicle access, food/merchandise vendors, etc.

5. Implement crowd control and other security measures.

• The level of security needed will vary depending on the type of event and the kind of audience that is attracted.
• Have security guards patrol the area. Require security guards to carry and show identification cards.
• Consider the use of photo ID badges for staff and volunteers.
• Create a policy to allow removal of patrons that may cause harm to others.
• Use video surveillance. Keep in mind privacy restrictions.

6. Create contingency plans for emergency situations (e.g., out of control crowd, fire, power failure, poor weather, etc.)

7. Place signage indicating:

• the location of the closest first-aid station;
• the location of the closest emergency exits; and
• the location of the closest security office.

8. Place trashcans around the area to discourage people from littering. Litter may cause people to slip and fall.

9. Implement a financial management system. Create cash handling and payment procedures.

10. Consider implementing a program for helping lost children find their parents/guardians.

11. Screen and hire appropriate employees and volunteers.

12. Train employees and volunteers. Keep detailed records of the shifts and locations for which employees/volunteers are responsible.

13. Ensure communication devices (such as two-way radios or a public announcement system) are installed and used by employees/volunteers.

14. Allow patrons to provide feedback and complaints. This can help your organization plan for the next special event.

15. Assess the event afterward.

• Determine if risk management techniques were used.
• Determine if those techniques were effective.
• Consider whether there were any unforeseen problems and how they could be prevented in the future.
• Consider whether or not the event should be held again and what improvements should be made.

Additional Resources

Refer to the information in “ ”

Refer to your municipality’s website for more information regarding special events applications, permits, etc.

Protecting Yourself from Liabilities of Others*

Legal Liability

When using contracts or agreements, have a lawyer:

• Explain your legal rights and obligations.
• Ensure you have effectively transferred liability.
• Determine if you have a properly worded legal document.
• Witness the transaction.

Risk Management

1. Use signs. Signs may be used to warn of hazards and provide information. They should be used as a way to possibly prevent losses, but should not be relied on to deflect liability.

• Keep signs simple and easy to understand.
• Make sure signs are placed in visible areas.
• Use universally recognized symbols.
• Ensure size and colours are appropriate and visible.
• Use all common languages.

2. Use contracts. The contract must be legally enforceable:

Key Point A lawyer should be consulted to draft or review a contract to ensure that it is legally enforceable, and that it offers the protection from liability that you expect.

• Both parties must intend to create a legal relationship.
• There has to be an offer -- a promise to buy/sell/exchange something of value (a good or service) subject to a condition.
• There must be an acceptance.
• Both parties to the contract must receive something of value. For example, a person who leases his/her premises receives money for the rental and the person who is leasing the property receives use of the property, as set out in the contract.
• Both parties must have the capacity to contract. Special considerations exist for minors, intoxicated persons, insane persons and bankrupt persons.
• The contract must be legal. For example, a contract to purchase stolen goods or perform other illegal acts is not enforceable. Contracts contrary to public policy or public interest may also not be enforceable.
• Certain contracts must be in writing to be legally enforceable, including contracts concerning the sale of land and contracts lasting for a period of greater than one year.

3. Use waivers and hold harmless agreements.

• A waiver is a clause that states that users, customers, etc. waive their right to make a claim or sue the waived company for a specific activity.
• Hold harmless and indemnifying agreements are usually clauses in contracts or agreements where one party agrees to protect the other party from legal action arising out of the contract or agreement.
• Waivers and hold harmless agreements may deflect and transfer liability if they are properly worded.
• Always obtain legal advice when drafting waivers or hold harmless agreements.
• Use consent forms if waivers cannot be used.

4. Require insurance certificates. An insurance certificate should be required from people and organizations that you enter into agreements with or who supply products and services to you. Consult your insurance representative for guidance, but generally if you are at risk for the actions of someone performing a service for you, then that person should provide you with an insurance certificate.

• An insurance certificate is proof of insurance coverage, but it can also confer certain rights to the certificate holder.
• A certificate contains all the relevant information that a contracting party might need to know about the other’s insurance.
• If someone requests this of your organization, forward the request to your insurance representative with all the relevant information, and he/she will issue the certificate.

Additional insured:

Key Point Make sure the certificate lists your organization as an additional insured.

• When providing an insurance certificate to an organization, or when requesting one, the requesting party requires that he/she/it be named as an “additional insured” on the other party’s insurance.
• An additional insured is provided with certain rights under the other party’s insurance policy. Essentially, as an additional insured you are covered under that policy as if you were the primary named insured. Consult your insurance representative for specific details relative to your situation.

Cross-liability clause:

• This clause means that, should a loss occur, all insureds under the policy, including additional insureds, are treated as though separate policies exist for each. It is important to have a cross-liability clause added to insurance certificates that you are requesting for liability insurance. It is meant to protect you if there is a conflict between the parties and one has to defend against another.

Notice of cancellation clause:

• When requesting an insurance certificate, it is important to require a notice of cancellation clause. This means the insurer will notify you if the policy for which the insurance certificate was issued is cancelled. You can request the amount of notice you need.

Coverages and limits:

• When requesting a certificate, or having one issued, consult your insurance representative on the coverages and limits that are appropriate for the situation.

Effective dates:

• Check the effective dates, or policy term, on the certificate to make sure the dates cover the activities in question. Any time an activity or relationship will outlast the expiry date on the certificate, make sure to request a new one prior to expiry.

Operations:

If the operations or activities are unusual, such as fireworks or blasting, it’s a good idea to have them listed as insured

Claims Handling

Claims Handling

When people are injured, they should receive immediate medical attention and, if required, emergency services should be contacted. In addition, the following steps should always be taken when an incident/accident occurs on your premises:

1. Complete an incident/accident report. ( for a sample.) Documenting the incident/accident may help establish a defense against a claim presented at a later date. It may also help analyze the cause of the incident/accident and recommend improvements to prevent similar incidents in the future.

2. Contact your insurance representative to determine if the incident/accident should be reported to your insurer. If so, provide them with:

• details of the incident/accident;
• information about steps that had been taken to avoid the incident/accident.

3. Take several pictures of the area where the incident/accident occurred.

• Photograph any damages to the property.
• Photograph the area(s) where the person was injured.
• Photograph the injuries that the person sustained if possible.

4. Take down the names and contact information of any witnesses. Obtain and record detailed descriptions of the incident/accident from the victim and witnesses.

5. In the event that a person is injured, instruct employees and volunteers never to admit fault on behalf of the organization. They should say “I’m not permitted by my employer to discuss the circumstances of the incident. I will, however, be reporting the incident immediately, and an authorized person will contact you.” Never admit liability!!

6. Document all information related to incidents/accidents.

7. Investigate potential causes and implement preventative measures.

Premises Risks: Liability Loss Prevention*

General liability insurance policies normally cover property damage and injury of a third party. Liability loss prevention is any measure taken to prevent or minimize these damages and injuries.

Some common liability losses include:

• Damage to the property that you are being paid to work on.
• Damage to property belonging to people other than clients/customers.
• Injury to clients/customers either on your premises or off premises at a job site.
• Injury to people other than clients/customers who may be in the vicinity of your premises or job site.

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Legal Liability

All individuals and organizations have a legal obligation to conduct themselves in a manner that is reasonable and that does not willfully or negligently cause injury or damage to others. Reasonable precautions must be taken in the conduct of your operations to prevent such damage or injury. If you fail to take reasonable care to prevent these things from happening, you may be sued and may be responsible for compensating people for their damages. Precautions such as regular inspections and maintenance should be carefully documented.

Risk Management

1. Take the time to carefully consider the potential liabilities faced by your organization. Decide which are more likely to occur and which could potentially result in the greatest loss. Spend time and resources on the areas of greatest concern that could have the most significant cost or negative impact.

2. Create policies and procedures on how to handle the property of others.

• Keep property in a secure area.
• Ensure property is returned to the correct owner.

3. Keep people safe.

• Do not allow visitors/customers in restricted areas
• Keep all premises, including parking lots and sidewalks, well lit.
• Keep the premises neat and tidy. Implement a regular inspection and maintenance schedule.
  

  I. Inspect shelves (to ensure they will not collapse and that they do not have sharp edges). II. Ensure equipment is well spaced to avoid clutter.

4. Perform pre-inspections on property that belongs to a third party before he/she leaves it in your custody. Document these inspections and make a note of any deficiencies.

• Photograph damaged areas if necessary.
• Note any repairs or replacements needed.
• Ensure that the owner and user sign the inspection form. This helps determine that the owner and user are in agreement regarding the conditions of the property.
• Ensure each party has a copy of the inspection form.
  

5. Complete a final inspection before returning the property.
The property owner and the user should perform the inspection together.

• Compare conditions with the pre-inspection.
• Sign and keep a copy of the final inspection.

6. Ensure enough employees/volunteers are on staff to protect visitors/customers from harm.

• Determine the average and maximum number of clients/customers per day.
• Put more employees/volunteers on duty during heavy traffic periods.
• Provide training to employees/volunteers.
• Ensure that employees/volunteers assist clients/customers if they are using hazardous equipment. For example, self-dispensing machines.

7. Give warning.

• Place warning labels on potentially hazardous products.
• Place signs to deter clients/customers from restricted areas.
• Provide instructions on how to operate equipment, handle materials/products, etc.

8. Implement security measures.

• Install a security alarm.

  i. Place signs in a visible location to warn people that a security system is in place.

• Install electronic surveillance (security camera). Keep in mind privacy restrictions.
• Keep the premises locked after hours.
• Implement a key security policy for premises.

  i. Ensure key-holders are known and that keys are returned after employment or volunteer service ends. ii. Keys should be kept in a safe place.

9. Document retention.

• Consider storing a backup copy of records off the premises. If a fire destroys the building, backup records stored offsite will still be available.
• Consider storing data electronically. Storing data electronically has many advantages such as accessibility and convenient retrieval of data. However, additional considerations such as data security (hackers, crackers, etc.), personnel training and cost need to be considered.

Claims Handling

Claims Handling

1. Follow the company’s emergency procedures and evacuation procedures.

2. Contact emergency services if necessary.

3. Complete an incident/accident report. Documenting the incident/accident may help establish defense against a claim presented at a later date, help analyze the cause of the incident/accident and recommend improvements to prevent similar incidents/accidents in the future.

4. If you plan on making an insurance claim, report the incident/accident to your insurance representative. Provide them with:

• details of the incident/accident; and
• steps that were taken to avoid the incident/accident

5. Take several pictures of the area where the incident/accident occurred.

6. Take down the names and contact information of any witnesses. Obtain and record detailed descriptions of the incident/accident from the victim and witnesses.

7. Document all information related to incidents/accidents.

8. Investigate potential causes and implement preventative measures.

Policy and Procedures*

Policies and procedures are in place to ensure that duties and services are performed in a consistent manner. The benefits of being consistent are:

• Employees understand what is expected of them.
• Disputes may be resolved by determining whether or not policies and procedures have been followed.
• Plans are already in place in the case of an emergency.
• Customers receive a consistent level of service that may increase customer satisfaction.
• It provides proof that your organization has strict performance requirements for employees/volunteers, which, in the end, could improve the defensibility of claims.
• It protects the image of the organization.

Legal Liability

It is important to note that no one can accurately predict what claims will end up in court or what the decision of the court will be. Policies and procedures may be a very effective way to defend against claims and lawsuits, but they must be strictly followed and well documented to be effective. If you have policies that you do not use or follow, you may be in a worse legal position than if you didn’t have them.

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Risk Management

Depending on your organization, other policies and procedures may also be needed. Many organizations are exposed to similar risks, and the following policies and procedures should be considered:

• Screening and Hiring of Employees/Volunteers
• Contingency Plans (Business Continuity Plans)
• Inspections and Maintenance of Buildings/Premises
• Employee Training
• Contract Review (to ensure contracts are analyzed with a view to limiting liabilities)
• Emergency Plans
• Accident and Incident Reporting
• Financial Management
• Privacy
• Ethics
• Employee Discipline and Dismissal

There are many other policies that an organization might create, depending on the different activities and duties that the organization performs. For example, a restaurant may require a policy for food preparation and service and alcohol service.

Occupiers' Liability - Slip/Trip & Fall*

As an occupier, you and/or your organization are required to keep areas such as aisles, stairs, ramps, walkways, driveways and parking lots reasonably safe for persons who are using them. Some common hazardous conditions include:

• ice and snow that has not been cleared
• unexpected elevation changes
• uneven surfaces (e.g., cracks, gaps, potholes)
• slippery surfaces (e.g., wet floors, tile flooring)
• missing or loose handrails on stairs
• debris on walking paths (e.g., boxes in aisles)
• inadequate lighting.

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Legal Liability

An occupier may be held liable for slips, trips and falls if he/she/it fails to provide a reasonable standard of care in keeping the premises free from hazards.

In cases where there is more than one occupier – such as a landlord and a tenant or in the case of shared spaces – it is possible for liability to be shared. Who is held liable depends on the circumstances of the loss.

The following are some of the criteria used to determine whether or not the appropriate standard of care was applied:

• Whether the danger was foreseeable.
• Whether the occupier’s conduct was in accordance with acceptable standards of practice.
• Whether there was an adequate system of inspection (considering the risks involved) in place and carried out.
• Whether the danger was allowed to exist for an unreasonable amount of time.
• The ease with which the danger could have been prevented.

The best way to avoid liability is to prevent losses from occurring by diligently keeping premises free from hazards. This diligence, in combination with thorough and consistent documentation, will be one of the most effective ways to defend your organization against a claim or lawsuit should one occur.

In the case of shared spaces or multiple occupiers such as a landlord and tenant, ensure that the lease agreement clearly states the responsibilities of each party. The agreement should state the areas each is responsible for, who is responsible for inspection, maintenance, repairs, etc., and the liabilities of each.

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Risk Management

1. Develop and implement an Inspection and Maintenance Policy (click here for a sample) that states:

• the purpose of the policy;
• effective and revision dates of the policy;
• how often it is to be carried out;
• how it will be documented and by whom;
• corrective actions to be taken if minimum standards are not met; and
• who is responsible.

2. Use a regular and reasonable cleaning and maintenance program.

3. Perform inspections frequently for hazards or maintenance deficiencies. For example, spills and water at entranceways are common causes of slips, so regularly inspect for wet floors in high-risk areas such as entrances, bathrooms, and beverage-service areas.

4. Create a form to be used during inspections (click here for a sample).

5. Train employees/volunteers to identify and fix hazards.

6. When hazards are discovered, address them using methods such as:

• posting signs or notices in highly visible locations to warn patrons of potential danger;
• erecting barriers to prevent access to hazards;
• conducting repairs; and/or
• removing the hazard.

7. Ensure all areas are adequately lit.

8. Use a non-slip floor treatment (especially when wet or greasy floors are inevitable).

9. DOCUMENT!! Keep records of inspections, repairs and the state of the premises.

Claims Handling

Claims Handling

1. Once a claim or potential claim is identified, immediately contact your insurance representative.
   
2. Record all relevant information surrounding the potential claim like the names and contact information of any witnesses, staff or volunteers that were present or have information relevant to the incident. Have staff/volunteers complete an incident report with all relevant details.
   
3. Refer any discussions with the claimant to your insurer. It is wise to tell employees and/or volunteers that they should not discuss liability with potential claimants and that they should NEVER ADMIT LIABILITY!!!
   
4. Investigate potential causes and implement preventative measures.

Additional Resources

For more information on liquor liability for Special Events. Please note that the following list of resources is not comprehensive. There are other municipal, provincial and federal liquor regulations that need to be followed.

Risk Management

Risk Management

1. Create policies and procedures with meaningful consequences and strictly enforce them. Some useful elements of a policy include:

• Limiting alcohol consumption.
• Ensuring that bartenders are experienced and do not serve obviously intoxicated persons.
• Offering food service.
• Encouraging taxi use.
• Providing reduced/subsidized taxi and hotel rates.
• Encouraging car pools and designated-driver programs.
• Reminding guests before and during the event not to drink and drive and of the other options available.
• Having several trained doormen/bouncers/spotters who remain sober and watch people leaving and encourage/insist on taxi use.
• Informing guests that intoxicated persons will be put into taxis.
• Displaying posters from Mothers Against Drinking and Driving (MADD), Students Against Drinking and Driving (SADD) or similar organizations, outside and around alcohol consumption areas.

Some of these elements may be required by law.

2. Comply with all legislation regarding alcohol. (

3. Ensure proper permits (to sell or serve alcohol) are obtained.

4. Train servers.

• Do not serve or sell alcohol to those under legal drinking age. The age will vary depending on the province or territory.
• Do not serve patrons past the point of intoxication.
• Ensure that servers understand government legislation pertaining to alcohol. Ensure that servers follow the organization’s policies and procedures. Make sure training is documented.

5. Implement a mandatory identification policy.

• Establish the forms of identification that will be accepted.
• Establish when identification needs to be shown. For example, require identification from anyone who is not obviously over the age of 30.

6. Display informational material on government alcohol-related policies and legislation.

• Inform customers that the business will abide by the rules set out by the government.
  

7. Implement inventory controls over alcohol.

• Implement measures to prevent theft (e.g., install security cameras, hire additional personnel, etc.).

8. Regulate hours to sell or serve alcohol. Check with your local authority to determine minimum standards.

9. Use a facility-use agreement if you have rented out a location that you own and where renters may consume alcohol.

• Include a hold-harmless and indemnifying agreement that holds the owner of the premises harmless and indemnifies the owner for losses or damages resulting from the negligent use of the facilities or the serving of alcohol. These clauses may help limit your liabilities. Consult a lawyer for advice on contracts and agreements.

10. Obtain insurance coverage, possibly with higher limits (i.e., higher limits than organizations that do not serve/sell alcohol). Consult your insurance representative.

11. Consider implementing a Zero Tolerance Alcohol and Drug Policy ( a sample.)

• Do not allow employees/volunteers to consume alcohol or drugs while working.
• Do not allow employees/volunteers to drink and drive.
• Do not allow employees/volunteers to work if they appear

Liquor Liability*

Legal Liability

Organizations may be responsible for patrons when alcohol is served. Forms of liquor liability include:

• Liability as a server – Serving people past the point of intoxication.
• Liability as an occupier – People, companies or any other organization that owns, has possession of or responsibility for premises are responsible for protecting persons on their premises from harm.


• Liability as an employer regarding employees consuming alcohol, such as at staff parties.
• Liability as a sponsor of potentially dangerous activities.
• Use of excessive force – Security personnel cannot use unnecessary or excessive force to manage intoxicated patrons.

Risk Management: Accidents

Risk Management: Accidents

1. Attend to any persons involved.

2. If necessary, move yourself and injured persons out of any areas of immediate danger such as fire or traffic.

3. Administer first aid if necessary. Only administer the level of first aid that you are qualified to perform.

4. Do not admit liability or promise to pay for expenses incurred by injured persons.

Key Point If an accident involves injuries or potentially involves injuries, report it to your insurance representative.

5. Call or ask a bystander to call 9-1-1 or the emergency number for police, ambulance and/or fire department if necessary. Do not leave the scene of the accident unless it is to call one of those services.

6. Protect any damaged property or evidence from further damage (as long as the protection is at a reasonable cost). As an insured, it is your duty to minimize the damage to the extent possible.

7. Complete an accident report (click here for a sample). The accident report should include at a minimum:

• names and contact information for the reporter and witnesses;
• a detailed description of the accident; and
• a description of injuries and property damage.

8. Promptly notify your insurer of the possible claim. If an employee is injured, claims should be reported to the Workers’ Compensation Board.

• Note the name of the person to whom you reported the claim. In the case of a dispute, this may be used to prove that the claim was reported.

9. Keep the report on file.

• Documentation should be kept for as long as necessary to defend against potential claims. The length of time that legal action may be taken by law is called the Statute of Limitations.
• If the victim is an adult, keep the incident documentation on file for at least three to five years after the Statute of Limitations passes for that type of claim. Your lawyer should be able to advise how long this is.
• If the victim is a minor, keep the incident documentation on file for at least three to five years after the Statute of Limitations passes for that type of claim once the minor has reached the age of majority. Your lawyer should be able to advise how long this is.
• An efficient method of organizing and storing incident reports is in an electronic database where they can be sorted and retrieved based on a number of factors.

Claims Handling

Claims Handling

1. Reporting Claims

• If a claim is, or could become, greater than your deductible, is complex, involves injuries, or if you are in doubt, it is best to have the claim handled by your insurer. Your insurer is an expert at investigating and settling claims.
• The following are guidelines for dealing with your insurer:

  i) If a reported incident/accident will likely result in a claim, submit a copy of the incident/accident report to your insurer.

  ii) If you receive a Statement of Claim from an injured party explaining the intent to make a claim against your organization, submit it to your insurer.

  iii) If applicable, the adjuster will provide a Proof of Loss form to be completed to demonstrate that the organization has experienced a loss.

  iv) Document all monetary costs related to the claim (repair work, hospital bills, lost income, etc.).

  v) Cooperate and communicate often with your insurer while they are handling your claim.

2. Maintain a claims record (click here for a sample).

• By keeping detailed records about claims you will be better able to track trends in loss causes, and the costs associated with them.
• Keep simple records of premiums paid, additional charges and returned premiums.

Incident and Accident Reporting*

Incident and accident reports are valuable because:

• They capture complaints, accidents and incidents before they become claims.
• They help establish a defense for claims that may be presented years after an incident/accident.
• They serve as the basis for analyzing the causes of incidents and accidents and for recommending risk improvements to prevent similar events in the future.
• They help identify weaknesses in your current risk management policies and procedures to prevent more serious losses from occurring.

Risk Management: Incidents

1. If an incident occurs, attend to those involved to ensure there are no injuries.

2. Complete an incident report (click here for a sample). Incident reports should include at least:

• names and contact information of the reporter and witnesses;
• a detailed description of the incident; and
• recommendations to prevent similar incidents in the future.

3. Contact your insurance representative for advice on whether an incident should be reported to the insurer. Incidents are often reported even if a claim may not come out of them.

4. Keep the report on file:

• Documentation should be kept for as long as necessary to defend against potential claims. The length of time that legal action may be taken by law is called the Statute of Limitations.
• If the reporter is an adult, keep the incident documentation on file for at least three to five years after the Statute of Limitations passes for that type of claim. Your lawyer should be able to advise how long this is.
• If the reporter is a minor keep the incident documentation on file for at least three to five years after the Statute of Limitations passes for that type of claim once the minor has reached the age of majority. Your lawyer should be able to advise how long this is.
• An efficient method of organizing and storing incident reports is in an electronic database where they can be sorted and retrieved based on a number of factors.

5. Review the report to determine the cause of the incident and any loss prevention measures that could be implemented.

Non-Owned Automobiles

Non-Owned Automobiles

You cannot insure a vehicle that you do not own. Employees or volunteers using their vehicle for your organization’s purposes must insure their own vehicles. You can reimburse them for some or all of their expenses, and there is insurance available to protect your organization, but the vehicle owner must insure the vehicle. If you require employees or volunteers to use their vehicles for your organization’s purposes you could incur liabilities as a result. You should consider how to protect your organization and employees and volunteers from claims arising from using non-owned autos.

In addition to the general risk management points above, the following are considerations regarding employees or volunteers using their own vehicles for your organization’s purposes:

1. Implement a written policy for non-owned autos including:

• If and how employees/volunteers will be compensated for using their vehicles.
• The minimum liability insurance you request/require that employees/volunteers carry and if/how you want them to prove it. For example, you might make an annual request that they show proof of insurance that covers business/volunteer use.
• How employees/volunteers will be using vehicles.

2. Check with your insurance representative to make sure that your organization has the necessary coverages to protect you in case an employee/volunteer who is not insured or inadequately insured has an accident while conducting your business.

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Claims Handling

Accidents: An accident is an event that results in harm to people, damage to property or equipment, or loss of process or productivity. An accident report (click here for a sample) should be filled out if an accident occurs.

Incidents: An incident is an event that, under slightly different circumstances, could have resulted in harm to people, damage to property or equipment, or loss of process or productivity. An incident report (click here for a sample) should be filled out each time an incident occurs.

1. Park the vehicle in a safe location and turn on applicable warning signals.

2. Attend to injured persons. Do not attempt to move injured persons unless it is to get him/her away from an area of immediate danger such as fire or traffic. Do not attempt treatment beyond first aid.

3. Call or ask a bystander to call 9-1-1 or the emergency number for the police, ambulance and fire department if necessary. Do not leave the scene of the accident unless it is to call one of those services.

4. Notify a supervisor as soon as possible.

5. Complete a fleet incident or fleet accident report.

6. Report accidents to your insurer. Provide them with:

• details of the accident; and
• information about steps that had been taken to avoid the accident.
  

7. Take pictures of the area where the accident occurred.

8. Record the names and contact information of any witnesses. Record detailed descriptions of the accident from the victim and witnesses.

9. Refer any discussions with the claimant to your insurer. NEVER ADMIT LIABILITY OR PROMISE TO PAY FOR EXPENSES INCURRED BY THE OTHER PARTY! Instruct drivers never to admit fault on behalf of the organization. They should say “I’m not permitted by my employer to discuss the circumstances of the incident. I will, however, be reporting the incident immediately, and an authorized person will contact you.”

10. Document all information related to incidents.

11. Investigate potential causes and implement preventative measures. Consider striking an Accident Review Committee, especially if you have many vehicles.