Talking P&C exposures

By Brent Gilbert and Enging Chan | October 1, 2011 | Last updated on October 1, 2011
4 min read

  • Your client inherits valuable jewelry or heirlooms from family members.

    Inherited valuables should usually be specifically scheduled on a floater form of coverage to ensure they are adequately protected. But are your clients aware of the exact value of these heirlooms? Receiving an inheritance is a good time to appraise both new and existing valuables. An experienced insurance advisor will ensure a good strategy is in place to properly appraise and protect the client’s valuables.

    Alarmed safes or bank safe deposit boxes are a good alternative to protect items that are not used often. Items worn frequently should be scheduled on the home policy for convenience. Also, an insurance advisor can look to markets that specialize in insuring HNW individuals, offering claims settlement options such as 150% of replacement cost or cash settlements.

  • Your client regularly hires domestic staff but doesn’t realize the liability risks.

    These risks include staff being injured on the job—while driving children to school or working in the home, for example—or valuables going missing while staff members are employed at the home. What is the financial risk to your client should a valuable heirloom or piece of jewelry suddenly go missing while domestic staff is employed? Furthermore, should a domestic employee be injured on the job, your client could be faced with the financial impact of medical bills or payment of lost earnings. A specialized insurance advisor can help ensure all potential exposures are covered.

  • Your client recently transferred ownership of property into a trust

    This is one area of concern that should be addressed by the financial advisor and the insurance advisor together. If the property is transferred to a trust for your client’s children in the future, it is important that the insurance coverage recognizes the insurable interest of the trust.

  • Your client has a seasonal residence that may not be insured up to its reconstruction value.

    This can be a major concern in the event of a catastrophic loss, as it leaves your client exposed and responsible for paying the difference in value. Furthermore, the chances of such a loss are often greater for seasonal residences or vacation homes, as they tend to be located in more remote areas, and response time for fire departments can often be slower, resulting in less timely damage control and other preventive services.

  • Your client travels frequently and often drives outside the country.

    Driving outside the province or country exposes your client and his or her family to various types of liability risks and financial risk. For example, is your HNW client properly covered in the event that he or she travels frequently to countries with substandard health care systems, and prefers to be evacuated to receive proper medical attention? Not only can accidents result in major financial loss, but frequent travel outside the country can expose your client’s family to potential liability risks, such as getting into an accident with an underinsured or uninsured driver. This may expose your client to significant potential financial loss involving both legal and healthcare fees, as the person responsible for the damage is unable to pay the fees personally, and is without insurance coverage.

    Specific examples paint a clearer picture of reality than general information. By being aware of specific scenarios that can pose financial risk to your HNW clients, you can take the first steps to arm them with the information they need to reduce exposures to financial loss in the future.

    • Brent Gilbert, BEd, CCIB, CSP, is Chief Operating Officer for Horizon Insurance and Leipsic Private Risk Management (BGilbert@horizoninsurance.ca). ENGING CHAN, B.Comm (Hons), Msc Innovation & International Business Strategy, is manager of operations of Leipsic Private Risk Management (echan@leipsic.ca).

    Brent Gilbert and Enging Chan

    • Your client inherits valuable jewelry or heirlooms from family members.

      Inherited valuables should usually be specifically scheduled on a floater form of coverage to ensure they are adequately protected. But are your clients aware of the exact value of these heirlooms? Receiving an inheritance is a good time to appraise both new and existing valuables. An experienced insurance advisor will ensure a good strategy is in place to properly appraise and protect the client’s valuables.

      Alarmed safes or bank safe deposit boxes are a good alternative to protect items that are not used often. Items worn frequently should be scheduled on the home policy for convenience. Also, an insurance advisor can look to markets that specialize in insuring HNW individuals, offering claims settlement options such as 150% of replacement cost or cash settlements.

    • Your client regularly hires domestic staff but doesn’t realize the liability risks.

      These risks include staff being injured on the job—while driving children to school or working in the home, for example—or valuables going missing while staff members are employed at the home. What is the financial risk to your client should a valuable heirloom or piece of jewelry suddenly go missing while domestic staff is employed? Furthermore, should a domestic employee be injured on the job, your client could be faced with the financial impact of medical bills or payment of lost earnings. A specialized insurance advisor can help ensure all potential exposures are covered.

    • Your client recently transferred ownership of property into a trust

      This is one area of concern that should be addressed by the financial advisor and the insurance advisor together. If the property is transferred to a trust for your client’s children in the future, it is important that the insurance coverage recognizes the insurable interest of the trust.

    • Your client has a seasonal residence that may not be insured up to its reconstruction value.

      This can be a major concern in the event of a catastrophic loss, as it leaves your client exposed and responsible for paying the difference in value. Furthermore, the chances of such a loss are often greater for seasonal residences or vacation homes, as they tend to be located in more remote areas, and response time for fire departments can often be slower, resulting in less timely damage control and other preventive services.

    • Your client travels frequently and often drives outside the country.

      Driving outside the province or country exposes your client and his or her family to various types of liability risks and financial risk. For example, is your HNW client properly covered in the event that he or she travels frequently to countries with substandard health care systems, and prefers to be evacuated to receive proper medical attention? Not only can accidents result in major financial loss, but frequent travel outside the country can expose your client’s family to potential liability risks, such as getting into an accident with an underinsured or uninsured driver. This may expose your client to significant potential financial loss involving both legal and healthcare fees, as the person responsible for the damage is unable to pay the fees personally, and is without insurance coverage.

      Specific examples paint a clearer picture of reality than general information. By being aware of specific scenarios that can pose financial risk to your HNW clients, you can take the first steps to arm them with the information they need to reduce exposures to financial loss in the future.

    Brent Gilbert, BEd, CCIB, CSP, is Chief Operating Officer for Horizon Insurance and Leipsic Private Risk Management (BGilbert@horizoninsurance.ca). ENGING CHAN, B.Comm (Hons), Msc Innovation & International Business Strategy, is manager of operations of Leipsic Private Risk Management (echan@leipsic.ca).