disaster planning and insurance discussion april 18, 2012 presenter: michael j. brooks executive...

DISASTER PLANNING AND INSURANCE DISCUSSION

April 18, 2012

Presenter: Michael J. Brooks Executive Vice President Austin & Co., Inc.

Host: Leonard SilvermanExecutive DirectorCongregation Kehilath Jeshurun

In Coordination with Yehuda FriedmanAssociate Director Department of Community Engagement, Orthodox Union

Top 2% of insurance firms nationwide, in terms of volume

Niche focus- 250+ not for profit customers, often anchored by school’s

100+ Insurance carrier relationships

Servicing customers from Montreal to Long Island to Buffalo since 1853

Employee owned, boutique firm

Risk to owned assets from property damage (Fire, Theft, etc.)

Risk from liability-Being held legally liable for:

─ Damaging the property of others

─ Bodily injury to others─ Personal injury to others

Keep in mind- PERSONAL liability potential for congregation members, volunteers, trustees, and employees

RISK, AS WE DEFINE IT

Our Discussion- Ways to address Risk

RISK

TRANSFER(INSURANCE,

CONTRACTUAL)

PREPARE, REACT,

RESPOND

House of Worship Risk Considerations:Why insurance underwriters “lose faith”

Property Risks

Building Age

Antiquated Fire Protection

Fine Arts

Specialized Valuations

Deferred Maintenance

Unoccupied Bldgs.

Cooking/Social Events

Historic Buildings

Business Income Replacement

Bldgs.

Liability Risks

Programming for Seniors and Community

Slip/Fall

Counseling Risks

SchoolsSexual Misconduct

Transportation and Travel

Athletics/Teams

Solid balance of insurance coverages, reaction agility, and recovery strategies

Minimized pain (financial and otherwise) compared to similar size tragedies

Congregation Kehilath Jeshurun- A tragedy done right?

Intensive, ongoing review of insurance program

Board involvement, multi-departmental representation

Solid administration of insurance documentation, appraisals, etc.

Sound emergency response planning

Informed, deliberate decision making about risk vs. cost of insurance

Vendor relationships

Congregation Kehilath Jeshurun- A tragedy well handled?

DISASTER PLANNING- NOT WHAT YOU THINK

Comprehensive, all encompassing plan= 100’s of pages, $10’s of thousands in cost

Requires a consultant

Few outside of Fortune 500 have one

Fog of War example

Too many variables for detailed, granular plan

More realistic- a RESPONSE plan (24, 48 hours), and a general road map after that

DISASTER PLANNING- WHAT I WOULD BE DOING- QUICK HITS!

Big impact- Modest investment in time/admin

Focus on what you can control, not the variables beyond your sphere of influence

Adaptability/Agility

One page of notes, a few hours of prep time =‘s MAJOR improvement in response

DISASTER PLANNING- WHAT I WOULD BE DOING- QUICK HITS!

1) Insurance- See separate discussion2) Pre-Arrange/Pre-Screen Vendors: GC,

Cleanup/Resto Company, Real Estate, Transportation, PR Firm, Architect, and…Public Adjuster

3) Building/Re-Building/Moving- Ask your board to consider now- what can they imagine doing?

4) Partners/Rivals/Other HOW’s- Handshake or more formal agreements for space. Long term and emergency.

DISASTER PLANNING- WHAT I WOULD BE DOING- QUICK HITS! (CONT.)

5) Communication- Social Media, a Youtube script and video, email contact of congregation and stakeholders, phone strategy, ops center, meeting space

6) Tech- Off Site Redundancy. Not just data back up, but can you operate while your building is burning? Need a vendor to assist?

7) Local 1st Responders- Coffee is priceless

INSURANCE CHECKLIST- DOESN’T EVERYONE ENJOY THIS STUFF?

SPECIALIZATION- Vendor selection is critical- Generalist? Commercial?

CARRIER CHOICES- Litmus test- “A” or higher, NYS Insurance Dept “Admitted”, Lender requirements

VALUATION- Appraisals- (RC vs FRC vs ACV), Historical/Landmarked

FINE ARTS- Torah’s? Art work? Stained Glass, etc

ORDINANCE AND LAW COVERAGE- New code compliance, consultant opinion?

DEDUCTIBLE CHOICES- Annual discussion- Risk Tolerance? Buy Back Period?

LIABILITY INSURANCE- Other variables, separate discussion

BUSINESS INTERRUPTION INSURANCE:OUR INDUSTRY AT ITS WORST…

What is it?- Extra Expense, Loss of Operating/Net Profit

How Can I Collect?- Must be triggered by a property claim first.

How Much Should I Buy- Hardest insurance decision to make, bar none. Anchored by an educated guess, and endless variables

Format?- A maze of “Actual Loss Sustained”, “Coinsurnace” 1/6 Monthly, Contingent, Dependent, etc

Payroll Plan- Do you really intend to keep your Employees on the payroll while you rebuild? Can you replace them if you don’t? Different answer for different divisions- ie, schools.

PARTING SHOTS…

Your agent/advisor choice is the most important choice that you make

There is a limit to how much you can plan for specifically, but it is worth the energy to prepare generally

Enterprise wide involvement spreads the decision/responsibility/resources/blame/credits

Almost every one of you will deal with a truly major physical plant issue at some point in your career

Monday morning QB’s are never wrong

QUESTIONS?…

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