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Column: Roger's Soapbox

Empty Promises, Broken Trust

By: | March 5, 2018 • 2 min read
Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

The facts of the matter are simple enough. Friends — I’ll call them Jack and Jill — decided to sell the small local hotel they had run for years, found a buyer and set a sale date. In the period between the agreement and completion, the couple’s liability insurance had to be renewed. Jill explained to the broker about the sale and asked that the insurance be cancelled the day after the sale.

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A few days before the sale, their attached living quarters accidentally caught fire. Jack had to jump through a closed window to survive and spent time in the hospital.

With calm restored, Jill called the broker to ask how to proceed. She was advised the insurance had been cancelled, per her wishes, the day before the fire, a few days ahead of the sale. Jill explained those had never been her wishes.

The broker has not produced evidence, written or recorded, of his position.

The sale completed a month late, the fire damage having been repaired at Jack and Jill’s cost. They also footed the bill for potential profits lost during the month of repairs. They coped well, but the unilateral cancellation of the insurance coverage rankled.

My friends asked me for help with their attempts to claim. It’s been an education for all of us.

Their brokerage washed its hands of the whole affair. One cannot take action against a broker for claims denial. Jack and Jill therefore wrote to the company with whom we believed they had a policy. The letter went unanswered.

That the insurer and broker have to this day not issued a cancellation notice is surely suggestive. That the “little man” stands at a grave disadvantage is self-evident.

Later, realizing that the carrier had changed, they wrote to the correct insurance company, asking for claims forms. No reply still.

One avenue remained: In the UK, a Financial Ombudsman has been set up to resolve complaints between financial service providers and their customers.

The Ombudsman’s forms were duly completed and sent away. Jack and Jill now await a ruling. They don’t expect to win, because they see themselves as the “little people” fighting a faceless bureaucracy. If the Ombudsman rules in favor of the insurer, they would have to sue to keep their claim alive.

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That Jill would have cancelled the insurance in advance of the proposed sale makes no sense.

That the insurer and broker have to this day not issued a cancellation notice is surely suggestive.

That the “little man” stands at a grave disadvantage is self-evident.

Insurers generally have a bad reputation because they insist on sticking to the contracts signed by insureds.

In this case, if the insurer has done that, so be it. If the truth is otherwise, you might read about it in your newspaper one day. Either way, a lack of communication has occurred that boggles the mind.

People’s livelihoods and economic well-being depend on knowing where they stand. Jack and Jill didn’t, and they still don’t. How can that be the right way to do things? &

More from Risk & Insurance

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The Profession

Curt Gross

This director of risk management sees cyber, IP and reputation risks as evolving threats, but more formal education may make emerging risk professionals better prepared.
By: | June 1, 2018 • 4 min read

R&I: What was your first job?

My first non-professional job was working at Burger King in high school. I learned some valuable life lessons there.

R&I: How did you come to work in risk management?

After taking some accounting classes in high school, I originally thought I wanted to be an accountant. After working on a few Widgets Inc. projects in college, I figured out that wasn’t what I really wanted to do. Risk management found me. The rest is history. Looking back, I am pleased with how things worked out.

R&I: What is the risk management community doing right?

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I think we do a nice job on post graduate education. I think the ARM and CPCU designations give credibility to the profession. Plus, formal college risk management degrees are becoming more popular these days. I know The University of Akron just launched a new risk management bachelor’s program in the fall of 2017 within the business school.

R&I: What could the risk management community be doing a better job of?

I think we could do a better job with streamlining certificates of insurance or, better yet, evaluating if they are even necessary. It just seems to me that there is a significant amount of time and expense around generating certificates. There has to be a more efficient way.

R&I: What was the best location and year for the RIMS conference and why?

Selfishly, I prefer a destination with a direct flight when possible. RIMS does a nice job of selecting various locations throughout the country. It is a big job to successfully pull off a conference of that size.

Curt Gross, Director of Risk Management, Parker Hannifin Corp.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Definitely the change in nontraditional property & casualty exposures such as intellectual property and reputational risk. Those exposures existed way back when but in different ways. As computer networks become more and more connected and news travels at a more rapid pace, it just amplifies these types of exposures. Sometimes we have to think like the perpetrator, which can be difficult to do.

R&I: What emerging commercial risk most concerns you?

I hate to sound cliché — it’s quite the buzz these days — but I would have to say cyber. It’s such a complex risk involving nontraditional players and motives. Definitely a challenging exposure to get your arms around. Unfortunately, I don’t think we’ll really know the true exposure until there is more claim development.

R&I: What insurance carrier do you have the highest opinion of?

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Our captive insurance company. I’ve been fortunate to work for several companies with a captive, each one with a different operating objective. I view a captive as an essential tool for a successful risk management program.

R&I: Who is your mentor and why?

I can’t point to just one. I have and continue to be lucky to work for really good managers throughout my career. Each one has taken the time and interest to develop me as a professional. I certainly haven’t arrived yet and welcome feedback to continue to try to be the best I can be every day.

R&I: What have you accomplished that you are proudest of?

I would like to think I have and continue to bring meaningful value to my company. However, I would have to say my family is my proudest accomplishment.

R&I: What is your favorite book or movie?

Favorite movie is definitely “Good Will Hunting.”

R&I: What’s the best restaurant you’ve ever eaten at?

Tough question to narrow down. If my wife ran a restaurant, it would be hers. We try to have dinner as a family as much as possible. If I had to pick one restaurant though, I would say Fire Food & Drink in Cleveland, Ohio. Chef Katz is a culinary genius.

R&I: What is the most unusual/interesting place you have ever visited?

The Grand Canyon. It is just so vast. A close second is Stonehenge.

R&I: What is the riskiest activity you ever engaged in?

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A few, actually. Up until a few years ago, I owned a sport bike (motorcycle). Of course, I wore the proper gear, took a safety course and read a motorcycle safety book. Also, I have taken a few laps in a NASCAR [race car] around Daytona International Speedway at 180 mph. Most recently, trying to ride my daughter’s skateboard.

R&I: If the world has a modern hero, who is it and why?

The Dalai Lama. A world full of compassion, tolerance and patience and free of discrimination, racism and violence, while perhaps idealistic, sounds like a wonderful place to me.

R&I: What about this work do you find the most fulfilling or rewarding?

I really enjoy the company I work for and my role, because I get the opportunity to work with various functions. For example, while mostly finance, I get to interact with legal, human resources, employee health and safety, to name a few.

R&I: What do your friends and family think you do?

I asked my son. He said, “Risk management and insurance.” (He’s had the benefit of bring-your-kid-to-work day.)

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]