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?…
?