Caution: Climate Risk in California

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Published December 17th, 2021 by Kyle Langan

Although Southern California is famous for its mild winters, it does face unique risks of flooding, wind damage, and rain. This risk can lead to landslide and or infiltration from the outside to the inside of buildings.  Let’s first identify the root cause of why the upcoming winter season will be more severe than typical. Once understood, loss control recommendations can be made.

Good News and Bad News: Increased Snowpack

In August 2016, the Environmental Protection Agency warned of decreasing snowpack in California’s climate.[1] This problem is one of the endless negative impacts of climate change.

As the climate warms, less precipitation falls as snow. As a result, more snow melts during the winter, which decreases snowpack — the amount of snow that accumulates over the winter. Since the 1950s, snowpack has declined in California.[2]

However, 5 years later (December 2021), breaking news suggests a much-needed increase in snowpack for the Sierra Nevada is inbound.

A powerful storm system along the West Coast is dropping heavy snow in the mountains of the Sierra Nevada, and the Cascade Range.[3] The storm systems are excellent news for the drought-plagued region and its struggling mountain snowpack; without it, a resulting decrease in the extent of alpine tundra ecosystems could threaten some species.[4]

Mountain snow will be measured in feet with this storm, with more than five feet possible in the higher elevations of the Sierras.[5] “Total snow accumulations will be tremendous,” the National Weather Service in Sacramento wrote in a forecast discussion, calling it “easily the biggest snowstorm so far this season.” [6]

Warning

Although this storm system is great for the environment, it will be met with increased risk for property owners in California. The storm will bring positive change for California’s climate, but is simultaneously disruptive because of its potential flooding and impacts on travel.[7] Substantial wind and rain will enter lower elevations from the Pacific Northwest to Southern California.[8] The lower elevations of central California have the greatest risk of flooding, which does present unique risk to dwellings in the Sacramento and San Joaquin Valleys.[9]

Risk Management Techniques

Flood vents, floodplain management, and wind mitigation are all vital aspects of a risk control strategy for climate risk.

Flood Vents:

A flood vents are a useful guard against the buildup of excess moisture or water which are not healthy for structures to endure. They are permanent openings in walls that allow for the free passage of water. Flood Vents protect houses and buildings during floods by preventing hydrostatic pressure buildup that can destroy walls and foundations. This mitigation technique, allows floodwater to freely flow through an enclosure such as a crawlspace or garage.[10]

Characteristics of effective flood vents:

  • Free passage of water flows automatically in both directions without human intervention
  • Minimum of two openings
  • No higher than one foot above grade

Flood vents are useful for allowing for the automatic entry and exit of flood waters for an at-risk property. It is a “wet floodproofing” technique is required for residential buildings. Commercial buildings have the option to wet floodproof, which can be more cost-effective compared to dry floodproofing.[11] Dry floodproofing includes measures that make a structure watertight below the level that needs flood protection to prevent floodwaters from entering.  This type of floodproofing is often used to protect non-residential structures, water supplies, and sewage systems.[12]

Mitigation + Floodplain Management:

Further, property owners should also transfer risk to an insurer.

  • Purchase flood insurance
  • Look into Flood Hazard Areas (SFHA)
  • Look for Flood Insurance Route Maps (FIRM) near your area
Wind Mitigation:

Windstorm is normally a covered peril whether an organization purchases “named peril” or “all risks of loss” coverage.[13] Alternative options include a supplemental parametric insurance policy that pays out pre-agreed funds based on wind speeds.

Wind and water can cause damage to exterior walls, roofing as well as glass breakage and interior water damage.[14] In addition, damages to other insured property are at risk: docks, piers, landscaping, swimming pools, golf courses, tennis courts, outdoor restaurants/bars, etc. Damages to these areas drastically increased the amount of a potential claim.[15] Therefore, insurance policies that cover these exposures are important to consider. This way, indemnity is available if losses are present. If you are not certain if your assets are protected, contact Conrey.

[1-2] EPA

[3] Leonard

[4] EPA

[5-9] Leonard

[10-11] Smartvent.

[12] FEMA

[13-15] IRMI

References

EPA – What climate change means for California. (2016, August). Retrieved December 17, 2021, from <https://www.epa.gov/sites/production/files/2016-09/documents/climate-change-ca.pdf>

FAQs. SmartVent. (n.d.). Retrieved December 17, 2021, from <https://smartvent.com/resources/faq>

FEMA: Dry Floodproofing. Dry floodproofing. (n.d.). Retrieved December 17, 2021, from <https://emilms.fema.gov/IS321/HM0103040text.html>

Leonard, D. (2021, December 13). Storm blasting California with massive mountain snow and flooding rain. The Washington Post. Retrieved December 17, 2021, from <https://www.washingtonpost.com/weather/2021/12/13/california-rain-snow-atmospheric-river/>

Global Climate Change Causing Increased Fire Risk

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Published January 14th, 2022 by Kyle Langan

Recent Wildfires

Recent wildfires in Colorado and California highlight concerning macro issues regarding climate change. According to NASA, 90 percent of biomass burning is human instigated; this contradicts a common perception that most wildfires are caused by acts of nature, such as lightning. [1] According to Dr. Joel Levine, a biomass burning expert at NASA, humans are at fault for macro-level harsher weather events. [2] The devastating Colorado wildfire from December 30, 2021, may cause $1 billion in insured losses. [3] The late-season wildfire destroyed nearly 1,000 buildings and homes as it swept through Boulder County, CO. The fire was fueled by months of unusually warm, dry weather and intense winds. [4] It ranks as the most destructive wildfire in the Colorado history — it burned 6,000 acres and nearly doubled the amount of damage and insured losses caused by Colorado’s October 2020 fire. [5] In Colorado, the wildfire season does not typically extend into the winter, as snow cover and cold temperatures prevent fire spread. Fire is part of a general trend of a lengthening fire season and drier fuels in the Western US due to climate change. [6]

This video below displays historic temperature changes visually with NASA data driven heat maps.

Video: Global Warming from 1880 to 2021 (NASA)

Inadequate Coverage?

In Colorado, insurers have opened a mobile insurance village to assist affected residents. [7]

Unfortunately, rebuilding costs for many policyholders may exceed their insurance limits. Labor shortages, supply chain disruption, and inflation have pushed construction costs to the upside. [8] For example, a property owner, whose home was destroyed in Colorado’s October 2020 wildfire, told the Wall Street Journal his policy limits of $900,000 and $700,000  for the dwellings fell short of the approximately $2 million in rebuilding and required upgrade costs. [9] Homeowners should check with their risk manager to confirm their homes’ replacement cost valuation is accurate and that coverage is adequate. In order to effectively manage the exposure they face, property owners must ensure protection is as adequate as believed. To verify this, and to seek a broad range of expert risk advisory, consult with Conrey.

California: PG&E Gets Blamed

In California, the even larger ‘Dixie Fire’ stripped forests and forced thousands from their homes after it began on July 13, 2021. [10] It burned a total of nearly 1 million acres through Northern California and destroyed 1,329 structures. [11] Sadly, it also caused one fatality. The Pacific Gas and Electric (PG&E) utility company has been blamed for the fire, after a tree fell on PG&E owned electrical distribution lines. [12] The blaze was the second-largest in California’s history; 963,000 acres is an area larger than New York City, Chicago, Dallas and Los Angeles combined. [13]

Current Levels of Atmospheric Carbon Dioxide (NASA):

Fire Harm Reduction

Cal Fire urged Californians to “remain vigilant and be prepared for wildfire,” after climate change continues to “turbocharge severe storms, floods and extreme weather across the United States.” [14]

PG&E said they will continue to be tenacious in their efforts to stop fire ignitions from its equipment and to ensure safety [15] In July of 2022, “the company plans to bury 10,000 miles of California power lines in an attempt to prevent its equipment from sparking wildfires, a project that would probably cost tens of billions of dollars and take well over a decade to complete”. [16]

Indoor Fire Mitigation – Tragedies Strike in PA, NY

In contrast, the Philadelphia area has recently faced two devastating tragedies related to indoor fires. On Christmas morning, a house fire occurred in Bucks County, Pennsylvania. It claimed the lives of a father and his two children. Quakertown Police Chief Scott McElree said early indications were that the fire started in the family’s Christmas tree. [17] The fire took the lives of Eric King, 40, his sons, Liam, 11, and Patrick, 8, and their two dogs. Eric’s wife Kristin and their oldest son Brady managed to escape before the fire destroyed their entire home. [18] The blaze was deadly because the fire started within the walls of property after the family’s Christmas tree ignited and burned the home and its contents. The pine tree, wrapped with lights and electrical wires contributed to the increased fuel load inside the home. Fuel load is the expected amount of combustible material in a given area (what is inside a property that can burn). The house’s increased fuel load was the cause of this heart-wrenching tragedy.

To make matters worse for the Philadelphia community, on January 5, in Fairmount, a 5-year-old child accidentally ignited a Christmas tree while playing with a lighter. Three women – Rosalee McDonald, Virginia Thomas and Quinsha White – and nine of their children died in the fire, according to family members. [19] The blaze was the deadliest fire in Philadelphia in more than a century. [20] None of the six smoke alarms found in the unit were functional, and only one was still installed. This tragedy had been the deadliest fire in years at a U.S. residential building, but was surpassed on Jan. 9 by a fire in a high-rise in New York City’s Bronx borough that killed 17 people, including several children. [21] Support the King Family here; Fairmount families here; and New York here.

Risk management applies to any and all situations. It is a vital aspect of life. To prevent situations like this from happening, it is recommended to decorate a fake tree when Christmas rolls around next year. Reducing fuel load is the best way to minimize fire risk and prevent ignition. Further, frequently ensure that smoke detectors are fully functional. Verifying the functionality of smoke detectors can reduce loss of life from fires. During any time of year, take steps to acknowledge what contributes to your home’s fuel load, and have a construction professional inspect walls to certify they are as fire resistive as they can be; this will limit the spread of fire if a blaze does start.

Works Cited

1-2: Dunbar (NASA).

3-9: Ayers, 2022.

10-16: Washington Post, 2022.

17-18: Solis, 2021.

19-21: Staff 6abc, 2022.

References

Ayers, E. (2022, January 10). Colorado wildfire insured losses to reach $1b, Modeler says. Risk Manager FPN. Retrieved January 15, 2022, from https://www.advisen.com/tools/fpnproc/fpns/articles_new_24/P/418750667.html?rid=418750667&list_id=24

Dunbar, B. (n.d.). Wildfires: A symptom of Climate Change. NASA. Retrieved January 15, 2022, from https://www.nasa.gov/topics/earth/features/wildfires.html

NASA. (2022, January 12). Climate change evidence: How do we know? NASA. Retrieved January 15, 2022, from https://climate.nasa.gov/evidence/

NASA. (2022, January 13). Video: Global warming from 1880 to 2021 – climate change: Vital signs of the planet. NASA. Retrieved January 15, 2022, from https://climate.nasa.gov/climate_resources/139/video-global-warming-from-1880-to-2021/

Solis, G. (2021, December 27). Christmas Day house fire kills father, 2 children in Quakertown, PA.. 6abc Philadelphia. Retrieved January 15, 2022, from https://6abc.com/quakertown-house-fire-father-and-sons-killed-eric-king-christmas-pennsylvania-tragedy/11390602/

Staff, 6abc D. (2022, January 12). ‘near certainty’ Fairmount Fire ignited when Christmas tree set ablaze, Philadelphia officials say. 6abc Philadelphia. Retrieved January 15, 2022, from https://6abc.com/fairmount-fire-atf-philadelphia-firefighters-north-23rd-street-investigation-philly-blaze/11454578/

Washington Post. (2022, January 5). PG&E equipment blamed for Dixie Fire that burned nearly 1 million acres in California . Risk manager FPN. Retrieved January 15, 2022, from https://www.advisen.com/tools/fpnproc/fpns/articles_new_24/P/418388483.html?rid=418388483&list_id=24

Learning from the Surfside Condo Collapse

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Published November 29, 2021 by Kyle Langan

Cracking and crumbling

2018: Champlain Towers South had abundant cracking and crumbling on the columns, beams, walls of its parking garage. Prior to collapse in 2021, an engineer warned of major structural damage to concrete slab below the building’s pool deck. [1] So, how did this not get corrected in the 3-year window of time leading up to the tragedy that ensued? At Champlain, the condo’s association only had $706,460 in reserves, which was well short of the $10MM needed for structural repairs. [2]

Business Judgement Rule

Boards need to follow the advisory of professionals i.e., engineers, insurers, CPAs, and attorneys. Regular inspection of a building’s structural integrity and setting proper reserve levels are both vital actions. [3]

Directors can defer to judgment from qualified specialists and then follow the recommendations to prevent losses. [4] Sadly, the absent business judgement at Champlain would have provided a strong defense to litigation coming from unit owners’ families or third parties affected by the loss. [5]

D&O coverage should offer litigation protection for individuals on the board and the responsible entity for a loss of this nature. To read more about the importance of D&O risk financing, click here. With this in place, personnel on the board and the entity itself will both experience financial protection from any economic losses. Champlain Towers South only had $49 million in total coverage [6], which was not sufficient because of the litigation that followed.

Preventing Another Condo Collapse

Risk mitigation:

For commercial properties, engineers must file copies of safety inspections with local governments. It is now a requirement by Florida statute. [7] This innovation in the statute will see benefit in transparency for longevity and structural health of properties. The reaction, or perhaps overreaction to events like this is commonly when innovation is made. This follows a theme of “Overcompensation, Overreaction Everywhere,” as analyzed by Nassim Taleb in his book Antifragile.

Education:

Strategies for mitigation may include certain education requirements for board members and property managers. Increased education requirements can help achieve an essential goal for housing associations: balancing reserve funding with reasonable assessment for owners. This is significant because it introduces elements of Enterprise Risk Management, which holistically considers loss exposures and financial management.

Recommendation:

A board of directors should follow the strategies above, and purchase D&O insurance. That way, in case a catastrophic loss does occur, directors’ personal assets are not lost in defense costs during litigation.

References

[1-6] Surfside Condo Collapse Webinar – Hosted by USLI <https://www.usli-events.com>

[4-7] Various ideas coming out of the State of Florida concerning how to handle the collapse <https://www.floridabar.org/>

What is Your Strategy for this Overlooked Liability Protection?

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Published October 1st, 2021 by Kyle Langan

Negligent actions or inactions of a company’s officers or board of directors resulted in record high settlements in 2020. Private companies are at risk – not just publicly traded firms.

Example: A wrongful act results in the individuals who serve as directors and officers being sued for the breach of their corporate duties at a mid-sized company.

Privately held companies facing losses like these report an average loss of $387,000, and a maximum loss of $17 million. [1] How would your company fund a loss like this?

The only policy that would cover the exposure in the example above is directors and officers liability.

Does your current risk management strategy only account for property, auto, and general liability losses? General Liability policies do not pay for financial losses of a company, but management liability insurance can. Management liability policies include three main types: directors and officers, employment practices liability, and fiduciary liability.

There is an often-misunderstood coverage that will defend and finance this type of exposure: directors and officers. It is an available safety net that your company’s risk manager may have overlooked, or never considered.

What is D&O?

Directors and Officers (D&O) is a type of management liability insurance covering directors and officers for claims made against them while serving on a board of directors and/or as an officer of a company [2]. Policies cover managerial decisions that result in adverse consequences for both large and small companies alike [3]. This line of management liability protection is not solely applicable to publicly traded companies. Additionally, it should not be viewed as an expense, but as an asset to any company. An effective risk manager will break down the cost structure of this protection and implement a plan to prevent economic losses of this nature. Lastly, entity coverage covers claims made directly against the organization, and it can be added as an extension to a D&O policy.

Status of the D&O Market Price?

In a ‘hard market,’ insurance carriers exhibit a decrease in risk appetite. During a hard market, insureds must be presented as an attractive risk because underwriters have strict conditions for coverage. Insurers are focused on underwriting performance and the portfolio management of the businesses competing for cover. The D&O market has achieved hard-market pricing increases since Q4 of 2018 [4]. However, increases are slowing; insurers are experiencing new capacity for D&O risk in 2021. [5]

Prices continued to rise as of July 1, 2021, but at a lesser rate than in recent renewals; some experts believe rates may be flat by this time next year. [6]  2021 has seen significantly lower rate hikes than in 2020.

What’s Driving D&O Rates?

Mergers and Acquisitions (M&A) played a role in the hardening D&O insurance market. Insurers responded to this with higher retention levels and expensive rates [7]. Companies should eliminate and avoid the following D&O hazards that have been the subject of recent M&A litigation:

  • Misconduct and investigations regarding the actions of directors and officers [8]
  • Failing to disclose internal or external investigations related to a company’s actions or the broad actions of its officers and directors [9]. This causes investor retaliation, which is a D&O exposure for private and public entities.
  • Anything that can be determined as false or misleading information [10]
  • Omissions and statements like the ones causing recent SPAC lawsuits [11]
  • Overstating of financial prospects. Misrepresentation has always been an exposure to D&O Risk (either willfully or inadvertently) [12]

YOY price trend analysis:

Businesses have been competing for coverage in a difficult D&O market since 2019 (See graph below). It is clear that the hard market started in Q4 of 2018 with an 11.6% increase, leading into 2019, which saw a sharp price increase of nearly 20% on average in the D&O market. In 2020, it tightened up even further up to 41%. This is when some companies were potentially forced to self-fund for this management liability risk because purchasing D&O insurance was no longer economical. However, in 2021, the slower pace of increase proves there is new capacity from insurers within the D&O market. The 15% Q1 price increase average between public companies (21%) and private companies (10%) this year shows that if the current trend continues, the worst of the hard market is behind us.

Because of the clear trend, the worst of the hard market may be over. Experts like John M. Orr, D&O liability product leader for Willis Towers Watson, agree with this statement. [13]  However, it is still important to protect your business before a loss arises. Looking ahead, there is likely to be more flat renewals, potentially more frequent rate decreases, and increased competition among insurers. [14]

 

*Companies experienced an average settlement of $54.5 Million per claim in 2020 for D&O liability losses; Appendix [15]

 

With price increases trending downwards towards flat renewals, it is an excellent time to evaluate your current D&O risk management strategy. At Conrey, my team and I attack the root cause of what drives D&O rates with a proprietary system of data analytics and enterprise risk management proven to reduce total cost of risk. Contact me at kylel@conreyins.com to see how I can do this for your business.

 

—

[1] Privately-held companies and Directors & Officer’s Insurance: Why not? Summit. (2021, September 3). Retrieved October 5, 2021, from https://www.yoursummit.com/knowledge-center/privately-held-companies-and-directors-officers-insurance-why-not/

[2-3] IRMI – Directors and officers liability insurance. Directors and Officers (D&O) Liability Insurance | Insurance Glossary Definition | IRMI.com. (n.d.). Retrieved September 28, 2021, from https://www.irmi.com/term/insurance-definitions/directors-and-officers-liability-insurance.

[4] Greenwald, J. (2019, March 14). D&O pricing rises in fourth quarter of 2018: AON. Business Insurance. Retrieved from https://www.businessinsurance.com/article/00010101/NEWS06/912327297/D&O-pricing-rises-in-fourth-quarter-of-2018-Aon.

[5] AM best to join D&O-focused panel at the RE/Insurance Lounge. Business Wire. (2021, September 21). Retrieved September 24, 2021, from https://www.businesswire.com/news/home/20210921005776/en/AM-Best-to-Join-DO-Focused-Panel-at-the-ReInsurance-Lounge.

[6] Greenwald, J. (2021, August 2). D&O prices up 7.7% in second quarter: AON. Business Insurance. Retrieved September 29, 2021, from https://www.businessinsurance.com/article/20210802/NEWS06/912343627/D&O-prices-up-77-in-second-quarter-Aon.

[7] Moorcraft, B. (2021, September 16). How M&A has impacted the hard D&O Insurance Market. Insurance Business America. Retrieved September 24, 2021, from https://www.insurancebusinessmag.com/us/news/professional-liability/how-manda-has-impacted-the-hard-dando-insurance-market-310286.aspx.

[8] Barton, R. E. (2021, September 2). Caution ahead: Spac litigation trends provide a road map for directors and officers. Reuters. Retrieved September 24, 2021, from https://www.reuters.com/legal/legalindustry/caution-ahead-spac-litigation-trends-provide-road-map-directors-officers-2021-09-02/.

[9-11] Barton, R. E., 2021.

[12] Moorcraft, B., 2021.

[13-14] Greenwald, J. (2021, July 6). D&O rate hikes moderate as new capacity arrives. Printed from BusinessInsurance.com. Retrieved September 24, 2021, from https://www.businessinsurance.com/article/20210706/NEWS06/912342985?template=printart.

[15] Greenwald, 2019; Ross, 2021; Gallagher, 2021; Greenwald, 2021

Ross, H, Woleben J. (2021, May 5). D&O premiums rise 41% YOY in 2020; loss ratios hold steady. Accelerating Progress. Retrieved September 27, 2021, from https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/d-o-premiums-rise-41-yoy-in-2020-loss-ratios-hold-steady-63997938.

Gallagher – 2021 Spring/Summer Market Report. (n.d.). Retrieved September 27, 2021, from https://www.ajg.com/us/-/media/files/gallagher/us/news-and-insights/insurance-market-update-spring-summer-2021.pdf.

How a Proactive Risk Control Strategy Reduces Losses

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Published September 2nd by Kyle Langan

HURRICANE IDA is commanding many of the current headlines and updates in the news. Preliminary loss estimates from the storm are approaching $25 billion in New Orleans, LA.[1] Why should catastrophic events matter to you? One important reason is controlling the risk your most cherished asset faces. For most people, this is their home, while for others, it may be a valuable commercial property. Homeowners and facilities managers alike must maintain high level awareness of their property in order to mitigate risk and prevent loss.

$14.5B Network

New Orleans employed a proactive risk mitigation investment strategy by constructing a $14.5 billion network of seawalls and levees that the Army Corps of Engineers built after Katrina.[2] New Orleans’ current infrastructure system features hundreds of levees positioned in a protective ring around the city, the longest storm surge barrier in the U.S., a floodgate at Lake Ponchartrain, and the world’s largest pumping station.[3] With this proper protection in place, the city was effectively able to avoid another Katrina. This infrastructure guarded the city well against Ida and sets a model for other at-risk cities to follow. Katrina was catastrophic because very high storm surges overtopped levee systems in New Orleans and St. Bernard Parish.[4]

New Orleans’ levee system functioned as designed, according to Kelli Chandler, regional director of the New Orleans Flood Protection Authority: in the metropolitan area, “there was no breaching or overtopping of the levee system,” she said.[5] Katrina and Ida were not identical; however, the city experienced success during a storm of similar intensity to Katrina. Ida was a category 4 hurricane, with 150 mph winds. Katrina was a category 3, with 125 mph winds, but moved faster and was larger in size than Ida.[6] The magnitude of losses that were prevented can be seen in the appendix below:

Results: New Orleans’ demonstration of effective, proactive risk control

 

Inadequate Risk Control (Katrina)
Proper Risk Control in place (Ida)
* $174.7 Billion in damages
$25 Billion in damages

* Adjusted for inflation [7]

Proactive risk control is similarly necessary to prevent structural issues for commercial properties. Buildings deteriorate gradually over time, so managing the risk of this deterioration before problems arise is key. A strategy with this in mind is how New Orleans reduced a hurricane’s damages by over $100 B. The estimated ROI from the $14.5B investment was roughly $150B in prevented damages.

As buildings age, they can lose structural integrity. If simple repairs are procrastinated, they can develop into greater issues with higher loss potential. This can cause significant damage that may increase danger and interrupt operations.[8] Structural engineering and building codes have evolved the safety of commercial properties. Still, additional loss prevention is necessary for longevity and success. Facilities managers must adequately protect commercial buildings and mitigate the risk they face. Proactive risk control helps to prevent losses. Further, risk transfer increases capacity to prepare for inherent losses.

Constant maintenance and inspections are vital to mitigate property risk. This, along with the loss prevention advice below, is your solution to commercial property risk mitigation. Risk solutions are our specialty at Conrey.

 

Loss Prevention for Commercial Properties:

 

  • How effective is your facilities manager? — Hire excellent facilities managers because they act as the first line of defense. They identify repairs that need to take place, which is a crucial role. Proactive assessment will save money and ensure buildings remain safe to occupy.[9]
  • Are you planning for repairs and maintenance? — In the long run, it is favorable to financially prepare for unexpected expenses to occur. Routine maintenance should be budgeted for in advance.[10] According to the University of Michigan School for Environment and Sustainability, 72% of commercial buildings in the United States are aged 20 years or older; it’s around this milestone that facilities managers should budget significant funds in advance for upgrades.[11]
  • When are building inspections conducted? Inspections should occur:
    • Annually;
    • After any significant event, such as wind storms, earthquakes or hurricanes;
    • Before and after any major addition or renovation.[12]
  • Who is performing inspections? — Ensure inspections are performed by qualified inspectors who have location-specific expertise. Inspectors must be familiar with indicators of damage. Structural engineers must assess the major structural components of the building to identify any necessary corrective actions. They should document inspections to allow for year-to-year comparisons of issues, with photos.[13]
  • Are local building codes known? —Building codes help maintain safety and sound structure in buildings. It’s essential to know and understand local building codes; this way, requirements are met. Regulations in harsher environments may have additional requirements.[14]
  • Are issues being dealt with swiftly? —When an issue arises, they must be acted upon as early as possible. Early action lowers costs versus allowing issues to mature and become more serious or perhaps dangerous. The safety of those who live or work in the building depends on structural issues being addressed and resolved.[15]  A failure in this loss prevention technique can result in a devastating event like the one New Orleans experienced in 2005 with Katrina.

For risk management guidance on par with New Orleans’ successful risk reduction infrastructure, consult with Conrey Insurance Brokers & Risk Managers. To speak with a member of the Conrey Team, call (714) 838-5835 or contact us and experience The Conrey Difference for yourself.

— Kyle Langan, Risk Manager at Conrey

 

[1] S&P Global.

[2] Editorial Board.

[3] Castillo, A.

[4] Levenson, E.

[5] Castillo, A.

[6] Levenson, E.

[7] Staff, U. S. I. C.

[8-15] Johnson Financial Group.

 

References

Castillo, A. (2021, August 31). Battered by Hurricane Ida, New orleans’ storm protection infrastructure holds fast. American City and County. https://www.americancityandcounty.com/2021/08/31/battered-by-hurricane-ida-new-orleans-storm-risk-reduction-infrastructure-holds-fast/.

Editorial Board. (2021, August 31). Opinion | Hurricane Ida shows the huge investments to protect New Orleans after Katrina paid Off. it’s a lesson for other cities. The Washington Post. https://www.washingtonpost.com/opinions/2021/08/31/hurricane-ida-shows-huge-investments-protect-new-orleans-after-katrina-paid-off-its-lesson-other-cities/.

Johnson Financial Group. (2020, January 24). Risk insights: Structural issues and aging buildings. Johnson Financial Group. https://www.johnsonfinancialgroup.com/resources/blogs/business-guidance/risk-insights-structural-issues-and-aging-buildings/.

Levenson, E. (2021, August 30). How hurricane Ida compares to Hurricane Katrina. CNN. https://www.cnn.com/2021/08/30/us/hurricane-ida-katrina-new-orleans/index.html.

S&P Global (2021, August 31). Hurricane Ida losses likely short of Katrina totals, could hit $25B. ProgramBusiness. https://www.programbusiness.com/news/hurricane-ida-losses-likely-short-katrina-totals-could-hit-25b?utm_campaign=dnf-2021-08-31&utm_source=dnf&utm_medium=email.

Soergel, A. (2015, August 28). From resilience to resurgence after katrina. U.S. News & World Report. https://www.usnews.com/news/articles/2015/08/28/new-orleans-economic-resurgence-after-hurricane-katrina.

Staff, U. S. I. C. (2021, August 11). Inflation calculator: Find US dollar’s value from 1913-2021. US Inflation Calculator |. https://www.usinflationcalculator.com/.

Cyber Risks & Liabilities: Ransomware Considerations for Board Members

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In the Digital Age it is more important than ever to make sure that both you and your business are protected from Cyber Security threats. More and more we are seeing that businesses are falling prey to Cyber Attacks and worrying about whether or not they are covered for these attacks. This article discusses the questions that Board Members should consider to help make sure that their organization stays ahead of ransomware attacks.

At Conrey Insurance we want to ensure that you are covered in any instance, including if you have a Cyber loss. To speak with a member of the Conrey Team, call (714) 838-5835 or contact us and experience The Conrey Difference for yourself.

Kelly Moore Addresses Today’s Most Common Benefits Questions from Employees

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Kelly Moore, CEBS, is a Certified Employee Benefit Specialist with more than 20 years of experience at leading benefits firms, including OneDigital and Marsh. As a member of the Conrey Financial Services team, Kelly specializes in helping clients design and maintain employee benefits programs while navigating the risk of constant evolution.

This year’s open enrollment season is marked by even greater change than usual. As Kelly explains, “The pandemic is driving leaps in technology adoption, as well as heightened awareness among employees of the need for healthcare access.”

Drawing on her extensive knowledge of the current benefits landscape, Kelly identifies four questions that employers are hearing frequently from their employees right now. “In each case, I like to look beyond the immediate answer to also provide a way to go a step beyond in addressing the employee’s needs,” she says.

Kelly observes that one of the most common employee questions is how to find in-network providers. She notes that employers can go beyond by scheduling a provider search exercise during open enrollment, that familiarizes employees with available tools before they’re needed.

Employees also are asking how to access telemedicine. Kelly recommends encouraging them to register in advance, online, or with a mobile application, to help ensure this important benefit is ready and waiting.

Another common question is whether care can be accessed without an ID card. Kelly says the answer almost always is yes—and downloading the carrier’s app can be an excellent way to do this.

Finally, employees are asking what to consider when comparing plan options. Here, Kelly suggests challenging them to create a health budget with best- and worst-case estimates that make this comparison easier.

For more details about what’s on employees’ minds, download this article “The 4 Most Common Employee Open Enrollment Questions Right Now.” And if you have questions about enhancing your own employee benefits program, or developing a new one, Kelly and the Conrey Financial Services team are here to help. To arrange a meeting, call us at 877-450-1872 or contact us online.

Michael Robinson Advocates the Importance of Insurance and Annuity Checkups

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During more than 24 years in the insurance and financial services industry, Michael Robinson has helped many clients better prepare to meet their long-term financial goals. Key to his efforts are regular, objective assessments of life insurance and annuity products they’ve incorporated in their plans—or may benefit from adding.

Now a member of the Conrey Financial Services team, Michael has an extensive background that includes partnering with Registered Investment Advisors and comprehensive financial advisors. He has considerable experience with the use of insurance in retirement portfolios to lower the risks associated with investing. And he firmly believes in the benefits of meeting with clients on a periodic basis to ensure their objectives are being met.

Michael says, “Policies should be reviewed every year to verify they still fit your needs. This also provides an opportunity to make sure you’re not paying too much, or that the policy isn’t in danger of lapsing from being underfunded.” He adds that “In the case of annuities, recent declines in the yields on CDs and bonds now mean that some annuity products may be offering returns up to three times higher than the sub-1% yield to which 10-year Treasuries have fallen. This could make a case for including them in your financial plans.”

Conrey Insurance Brokers and Risk Managers offers you a complimentary review of your current situation. Working with a statement from your current policy, and an understanding of your goals, Michael and the Conrey team will provide you with a concise policy-review summary. You’ll quickly know where you stand, and whether any adjustments may be beneficial.

To arrange your free review, and ensure your insurance and annuity products reflect the best The Conrey Difference can offer, call 877-450-1872 or contact us online.

Financial Planners and Insurance Specialists: An Alliance of Expertise

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By Mike Lambrakis, CFP®
Conrey Financial Services

You know good finances take smart planning. But how about your insurance? Among financially aware people, property and casualty insurance is so ubiquitous that virtually everyone has policies. Yet I have become convinced that despite the billions of premiums paid per year, most policyholders don’t give their coverage a thought after they pay their bill, and rarely ever ask whether their coverage is adequate to ensure proper protection. This is true even when they’re attentive to the investment aspects of their finances.

Financial advisors—who typically are not insurance specialists—also rarely emphasize the property and casualty aspect of risk management, despite a desire for these insights from the vast majority of financially successful clients. But is it possible for a financial advisor also to be an expert in property and casualty insurance? In my opinion, there are too many moving parts, special situations, nuances, and a vast marketplace of different carriers to master.

This is why my partners at Conrey Insurance Brokers and Risk Managers and I decided to combine the benefits of financial planning with the broad, multi-carrier access and objective expertise only an independent insurance brokerage can offer.

How does an alliance between a financial planner and a team of personal and business insurance specialists add value for you? Our holistic, consultative approach recognizes that when situations change, behaviors change, and financial positions change, it can present new opportunities to maximize the value of your insurance dollars. Validating the adequacy of your coverage helps protect your assets. And even when your situation hasn’t changed, it’s important to check that you’re still receiving the proper coverage with the best value.

Could your insurance and financial plans both hold opportunities for improvement? Feel free to give us a call at 877-450-1872 or contact us – we look forward to showing you The Conrey Difference!