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April 11, 2007
Strengthening Communities Strengthening Communities ConferenceConference
Managing Your Risks
Ron DennillNorthern Communities Insurance Program
April 11, 2007
Agenda Agenda
What do you have at Risk?• Property Risks• Automobile• Crime Risks• Liability Risks• Construction Projects
April 11, 2007
Construction ProjectsConstruction Projects
Why do you need a contract?Surety Bonding & Insurance ConditionsCourse of Construction Insurance CCDC
April 11, 2007
Construction ContractsConstruction Contracts
Make sure you have a contract in place.Contract spells out who is responsible for
what and the work that is to be performedLots of different Contracts will work but
CCDC contracts are known to Owners, Contractors, Brokers and Insurance Companies
April 11, 2007
Insurance ConditionsInsurance Conditions
Often poorest written sections of most contracts
Include your insurance conditions in your tender
What is normally in the Insurance Conditions?• Bonding• Liability• Property Insurance ( COC Insurance)
April 11, 2007
Surety BondingSurety Bonding
Surety Bonding is Not InsuranceIt is the Guarantee of the Performance of a
PromiseThis will help insure that your project will
be completed as per the contract and people will be paid
It is the Contractor who bids on the projects that must obtain the bonding.
April 11, 2007
Surety Bonding Surety Bonding
Three Parts:• Bid Bond – Usually 10 % • Performance Bond – Usually 50 %• Labor and Material Payment Bond – Usually 50 %
Contractors must qualify to obtain Surety Bonding
Surety Underwriters don’t expect to have a loss
April 11, 2007
Surety BondingSurety Bonding
Surety Underwriters look for the three Cs• Cash • Capacity • Character
Not all Contractors can obtain Bonding You need to decide if you want the project bonded Spell out the requirements for bonding in your
tender
April 11, 2007
Liability Liability
Commercial General Liability• Contractors and Subcontractors
Wrap Up Liability• Owner and All Contractors
Professional Liability• Architects and Engineers
Auto Liability• Owner and Contractors
• Aviation and Watercraft Liability
April 11, 2007
Property InsuranceProperty Insurance
Construction Project itself
Contractor’s Equipment
Property in Transit
Property at an Unnamed Location
April 11, 2007
Course of Construction Course of Construction InsuranceInsurance
Course of Construction Policy covers:• Materials and labor going in to the Project for
Owner and Contractors at the site• Property In Transit• Property at unnamed locations
Can be purchased by owner or contractorInsure for the cost of the completed value Does not cover Contractors Equipment
April 11, 2007
Course of Construction Course of Construction InsuranceInsurance
Start at least 30 days before the work is to start
Will require a completed Course of Construction application
Soils reportBreak down of the valuesProject Schedule
April 11, 2007
Course of Construction Course of Construction InsuranceInsurance
Insurance very difficult to get after the project has started
Insurers may impose some warranties• Fencing of the entire project• Watchman warranty• Hot works warranty
Need advance warning of any extension requirements
April 11, 2007
Other Insurance ConditionsOther Insurance Conditions
Owner as additional insuredIndemnification clauses30 Days notice of Cancellation Match your insurance with your projectHave your insurance section reviewed by an
Insurance Broker or Risk MangerCertificates of Insurance
April 11, 2007
Canadian Construction Canadian Construction Document CommitteeDocument Committee
Who are they?
What do they do?
Why use their forms?
April 11, 2007
CCDC - Who are they?CCDC - Who are they?
National Organization responsible for the Development and review of Standard Canadian construction contracts and forms
Formed in 1974One owner representative from the public
and private sectorVolunteer Members from:
April 11, 2007
CCDC - Who are they?CCDC - Who are they?
Canadian Construction AssociationConstruction Specifications CanadaRoyal Architectural Institute of CanadaAssociation of Consulting Engineers of
CanadaLegal Council
April 11, 2007
CCDC – Why Use these CCDC – Why Use these
Documents have evolved over a long time through Input from experienced people in the industry
Familiar and Fair to all involved in the projects. Not one sided.
Insurance conditions are known by Brokers and Insurance Companies
April 11, 2007
CCDC – Where can I get them?CCDC – Where can I get them?
Forms can be purchased through the NWT Construction Association
April 11, 2007
Your Other RisksYour Other Risks
Property Vehicles and Mobile EquipmentCrimeLiability
April 11, 2007
Property RisksProperty Risks
Buildings ContentsComputersVehiclesMobile Equipment
April 11, 2007
BuildingsBuildings
Most losses to buildings are from firePoor maintenancePoor house keepingImproper storage of material Improper training or planning
April 11, 2007
Vehicles & Mobile EquipmentVehicles & Mobile Equipment
Most accidents are caused by:Driver errorLack of experienceNot familiar with the vehicleImproper maintenance
April 11, 2007
Vehicles & Mobile EquipmentVehicles & Mobile Equipment
Focus on:1. Your Drivers
• Hire good experienced drivers• Provide proper training
2. Maintenance• Daily inspection • Report problems and fix them right away• Scheduled maintenance
April 11, 2007
CrimeCrime
IncludesEmployee bonding Coverage for your money on and off
premisesCounterfeit paper currency and Money
ordersDepositors Forgery
April 11, 2007
CrimeCrime
Key to preventing losses are:• Good physical security• Proper screening of employees• Good policies and procedures
April 11, 2007
LiabilityLiability
Public Works • Roads and Side walks• Water and Sewer
RecreationBuilding MaintenanceAdministration Errors and OmissionsBylaws, Policies and Procedures
