Domagoj Juretic, Wed, Feb 11 2009 11:04 am
Here are Gregg's messages pertaining to the new insurance policy:
Gregg Humphreys, Feb. 5, 2009
I will address this email to you and ask that you forward it to whomever you wish in the Board and the Officers group. Perhaps if you will include me in that list when you pass this on and then I can capture the addresses - and my future emails on this subject will then go to all if you agree. (You may note that this email is coming from my home email address. It is still best to deal with me at my work address since I am there much of the time at this time of year.)
I met with David FitzPatrick at the end of 2008, to try to get a jump on the insurance issues this year.
We are nearing the end of a softer market, which means that insurers have more insurance to go around than they had in the recent past. As such, I hoped to either get a better rate for us or more coverage.
Our brokers then went back to K and K, our insurers in 2007 and to Chutter, our insurers in 2008. Briefly to recap, as you know, we were with K and K for several years and there were a lot of reasons to stay with one insurer on a program like ours however, given the deal we were able to strike last year, with the increased territory and the increased coverage for landowners at a slightly reduced premium, it made sense to make the change.
This year, it makes sense again to stick with Chutter (and the ultimate insurer, Kingsway General Insurance Company) if possible but, it is not. We had only the one claim this year (a pilot into a car in Quebec) and hence, our record is attractive - more so than in previous years. Despite that, because of corporate changes in the level of risk that they were willing to accept, which had nothing to do with the claim, Chutter and Kingway have declined our business.
FitzPatrick has the advantage of having our entire package all set up, and available as a program, so he was able to go to other insurers with the program to try to find some interest
We ran into the same issues as previous years, with very few insurers being interested in our sport. However, after a relatively small amount of searching, again as compared to previous years where we could not find ANY insurer to take us, have agreed to make a bid, on our program, exactly as we had it last year. They have tendered a quote of almost the same amount as last year, that being $32,000 with the same $2,500 deductible. In fact, after a small amount of discussion, they will consider a small reduction on that so, I expect final figures to be under $32,000 - but not by much.
I asked Megson FitzPatrick about their search of the market place. They went to the usual firms which have considered us in the past and had very little interest. It was then than Lloyds agreed to bid and with that, FitzPatrick suggested that we need not go any further - a strong insurer with our same good program at a fair price.
I have a few questions about our waiver system, which I understand will stand as currently established and I particularly want some confirmation of Lloyds position on the Participant's Exclusion but, assuming that all is in order, our renewal this year (due by Feb.14) will be a relatively easy decision. I expect answers to those questions on Monday next week.
Having said that, I haven't gone to any other brokers. There is an element of trust here to some degree and, once one broker takes a program to "the market", no other broker can go to the same insurers. Because FitzPatrick went to anyone who might consider taking us (Sovereign, Axa, All Sport and others), we would get the same response through other brokers. Therefore, I have not gone through other brokers this year.
Given the offer currently on the table, I suggest that we should likely go with what we know - as far as the program is concerned - and with this respected internationally insurer.
The other directors may have question and I will be back to you when I get the responses next week... this is just an update that things are happening more easily than in the past.
I look forward to your thoughts.
Gregg Humphreys, Feb.9, 2009
I have had another round of discussions with the brokers.
They have confirmed that Lloyds of London have agreed to underwrite us this year. The terms of coverage will be the same as last year, including the revisions to the Participant's exclusion - which has the net effect of granting coverage to the "landowners who have granted permission to the insured for use of property for Hang Gliding and/or Paragliding". This was a key clause in all of our discussions to date and is of no small importance.
With this, as long as our pilots have signed the waiver, we can offer to any landowner who allows us to use their land:
1) confirmation of coverage to $5,000,000 from claims brought by third parties
2) a certificate to that effect if they ask for it and now,
3) confirmation that if a participant in our sport brings an action against them, they will also be protected from legal expenses and indemnification if they are found to be liable.
Please note that, as in previous years, this last point only applies if the pilot has signed the waiver - because the waiver essentially says that the pilot will not bring an action against the landowner. If the pilot wants to challenge that, then our policy will respond to protect the landowner. I know this is a bit strange, in that we are siding with the landowner over our own members but, the idea here is to follow one of our primary mandates as an organization - to preserve flying sites for the benefit of all.
With regard to cost, I made an error in my email below. I referred below to last year's premium as being $32,000, which was wrong. In fact, we paid an actual premium of $35,000. You will recall that last year, our premium was $35,000 because we elected to insure the investigation costs that we would have had to pay on any claim at the lower premium charge of $32,000. Based on last year's actual premium, Lloyds has quoted renewal for the 2009-2010 term at $34,523.00.
Their actual renewal quote, from Megson FitzPatrick, is as follows:
Further to our discussion renewal terms are as follows:
Coverage: Commercial General Liability
Limit: As existing
Sub-Limit and Extensions: As existing
Conditions: As existing
Your current limit of liability is $5,000,000 per occurrence including Fire Fighting Expenses at $1,000,000 and the coverage is subject to a $2,500 Bodily Injury / Property Damage deductible.
Premium: $34,523.00 ( subject to 50% Minimum Retained Premium )
The expiring premium was $35,000.
Please note that the insurer on renewal will be Lloyd's. Chutter Underwriting Services is no longer placing liability insurance with Kingsway General Insurance Company as they have replaced their Kingsway policies with Lloyd's.
Please confirm that we should proceed with the renewal or if you have any questions regarding the policy.
Today, I spoke with David FitzPatrick to see if we could negotiate any lower rate, given the softer market. He suggests that, although the market is softer for many classes of insurance (commercial buildings, residential structures, etc.), the market for high-risk liability coverage is not soft at all. I take him at his word. The bottom line is that this is the best price they could work out for us this year. The coverage is good and will cover our needs for this custom-tailored plan.
I suggest that we go for this for 2009-2010 and look forward to your thoughts and any questions.
2009-02-11 11:10:51 Michael Fuller - Atlantic Canada
2009-02-11 11:22:26 Cas Wolan - Saskatchewan
2009-02-11 11:36:43 Steven Younger - Ontario
2009-02-11 12:44:26 Amir Izadi - British Columbia & Yukon
2009-02-11 23:52:25 Gilles Normandeau - Manitoba & Nunavut
2009-02-12 10:27:14 Domagoj Juretic - Quebec
Did Not Vote (1)
Bruce Busby - Alberta & NWT
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