“Building Your Dream Team: The Role of Your Insurance Broker in Alberta Success”

“Building Your Dream Team: The Role of Your Insurance Broker in Alberta Success”

Farm life instilled a profound understanding  some of the keys to Alberta Entrepreneur Success. It taught me the importance of hard work, ingenuity, perseverance, and, most importantly, honesty and integrity in everything you do.  Thank you, Mom and Dad!

It’s not just about sweat and persistence but also about taking a leap of faith, months of meticulous planning, and the rollercoaster of emotions, prayer, and unwavering belief in one’s success. I’ve traversed this path, and I’m fervent about guiding others through it.

As a professional insurance broker, I’ve had the incredible opportunity to work with amazing entrepreneurs across Alberta.  To that end, I want to share two success stories of entrepreneurial Albertans who had an idea and pursued it.  May their stories inspire  you to kickstart or elevate your own entrepreneurial journey.

EJH Events and Distribution

Edward Haynes emigrated from England to Canada, spending much of his adult life in the events industry. He brought a dream: to drive change within the Canadian Events, Hospitality, and Furniture markets with exceptional European products. These products were designed to withstand the harsh environment we sometimes have in Canada: winds, hail, and snow. COVID put his plan on hold, but not his dream.Post-COVID, he swiftly resumed his operations. EJH Events and Distribution is now a leading distributor of robust tent structures across North America, a testament to their resilience and quality.

He is now a partner at Superior Tent Rentals Ltd., which serves the Hospitality and Event industry at events such as the Heritage Festival and the Big Valley Jamboree. Even in the worst weather, the Superior Tents remain standing and undamaged.

So, what’s next for Edward? You will definitely want to check out Posh Outdoors, Inc., which has luxury glamping at its finest. Their first site in our beautiful Canadian Rockies is coming soon.

Viking Wood Splitter

A hard-working farm boy, Michael Thompson took his first big step after high school by joining a large fabrication company. They enrolled him in their apprenticeship program, where he spent 31 years mastering his skills as a journeyman welder and project manager until the company shut down.

Even while working full-time, Michael’s passion for creating things never waned. About 25 years ago, he crafted a sword to decorate his garage. When he shared it with friends, one joked it looked like it could chop wood. It wasn’t until 2016, during a camping trip, that he saw people struggling with axes for chopping. He offered them his sword, and one camper—a website developer—suggested he should start a business. That camper even helped him create a website, and Viking Wood Splitters was born.

In 2019, Michael decided to make Viking Wood Splitter his full-time career. Since then, his business has thrived, with sales doubling every year.

Each Viking Wood Splitter is custom-designed and hand-crafted, nearly 4 feet long, which makes it very safe to use. The handle comes wrapped in your choice of tape or leather for an excellent grip, and you can even get it custom-engraved.

Today, Michael and his wife Kelley are excited to see their innovative wood splitters being used across North America. Their product sells out quickly, making it a favourite among campers, woodsmen, and anyone who needs to chop wood.

These are just two examples of the many outstanding entrepreneurs I’ve had the chance to work with. To make your business successful, it’s essential to have a strong team of experts by your side. This team should include your lawyer, accountant, financial institution, and insurance broker.

Your insurance broker should be your partner in protecting your business. They work with you to offer risk management advice, customize your insurance plan, and find the best mix of coverage and premiums to keep you and your business safe.

So, if you’re considering starting your own business or want to improve yours, don’t wait!  Start building your team today and set yourself up for success. Contact Heather at Thor Insurance.  You won’t be disappointed. It’s a smart move that can make a big difference!

For additional information on Business Planning you can also check out “Strategic vs. Business Planning”.

Beware the Package Policy!

Beware the Package Policy!

At first blush the package policies offered by many of the insurers in the commercial insurance market space look really attractive because of all the various extensions of coverage that are automatically included.  Its no longer just a policy that insures your building and equipment against the risk of fire or hail damage.   Some of the more common extensions are;

  • building upgrades
  • environmental upgrades
  • landscaping and growing plants shrubs or flowers
  • business contents away from premises and while at employee residences
  • valuable papers
  • accounts receivable

It looks great, but what does all this mean?  How much of the total amount of insurance would apply to any one of these extensions?  Some of it?  All of it?  Or are there specific sublimits?   Do you even need all of them?

The fact is that most of these ‘add on’s’ do have real and important value.

Another truth is that most consumers have no idea what the value or relative importance of any of these extensions are to their particular needs.   As an experienced broker, I know that these extensions are what are often referred to as ‘talking points’.  That is to say, each one of these extension of coverage needs to be addressed individually and the correct amount of insurance allocated for each.

One of the notable examples from my own experience was a small consulting firm that suffered severe damage to the contents of their rented office due to sprinkler leakage.   The stuff that comes out of a sprinkler pipe isn’t just water, and makes a real mess.  This particular client had been referred to me by another much, much larger firm that had been an important client to me for many years.   The consultant, albeit a very small one-person operation, was an important asset to the larger company who relied upon their essential services.

All they wanted was enough insurance to satisfy the provisions of their lease for the rented office space.

This is a very common scenario and one of the reasons we review lease agreements along with other contract our clients enter in to from time to time.   The review of the lease started a cascade of issues as far as risk and assumed liability were concerned.   The landlord was responsible for nothing other than providing space within four bare walls and heat.   Any risk of loss even if it was due to the negligence of the landlord was pushed back upon the tenant.

We explained this to the consultant and advised them that we recommended a full suite of coverages with specific amounts to expand on many of the ‘add on’s’ as illustrated above.  It came at a price higher than the $500.00 online quote they had received for ‘similar’ coverage.   Three times a much in fact.  They told us they wanted to do business with us but to reduce coverage to the ‘basic’ package as they felt that was all they needed.  We responded by saying we were unable to do that and warned them of the potential consequences if they opted for the other quotation.   We would close our file and wish them well.   (Failing to warn them would open us up to liability for failing to do so even though we had no formal relationship with them.  But that’s another story.)

As professionals and Trusted Advisors, we rely on referrals from our existing client base,

so, we always let out clients know what happens to their referrals.  In this particular case the response was one of surprise and dismay.   They wanted to know the whole story which we of course could not discuss in detail other than to say our advice was not accepted and the consultant was left seriously exposed.

Our client had been with us long enough to become educated on risk and contingent exposures in their supply chain and key service providers.   The result?  The consultant was asked to furnish a Business Recovery Plan with details of their risk management program and details of how they would finance their risk.   They were no longer able to qualify as a preferred vendor.

They came back to us and not only did they take up the offer we had made, but asked us to advise them on the proactive steps they needed to take to mitigate their risk.  We did so and for no additional charge, which makes no sense either, but that’s what we do.

Several years later…..

The building suffered a serious failure in the sprinkler system and the consultants’ office was deluged with the mixture of sludge and water from the piping.  Everything in the office was rendered unusable.   The consequences to our client were minimal with completely appropriate insurance and adequate coverage amounts for the so called ‘add on’s’.    The cost of reproducing the paper records alone were ten times greater than the basic amount provided by the extension.  The Extra Expense insurance made it possible for the consultant to engage the resources needed to get their physical plant up and running in a new location as well as the temporary space from which the business continued to run.  There was virtually no interruption in the business or revenue stream.

We also coached them on the term of their new lease.

This is just one area where the commercial insurance package policies fall short.  I should stress that this is not the fault of the insurance companies who offer these products.  The opposite is true in that they are striving to offer the most appropriate coverage and service that they can.   Its is up to the consumer to make sure they understand the product and how well it meets their needs and risk appetite.

Who should you go to concerning risk and risk financing?

We go to accountants for tax advice and lawyers for guidance in legal matters.   Licensed and educated Insurance Brokers should be your Trusted Advisors for mater concerning risk and risk financing.  Many people like to go to their lawyer or accountant for this kind of advice which makes about as much sense as taking your Lexus to your barber for service.

This is just one example of the pitfalls of the typical package policy, and this story is just as much for the average inexperienced broker who handles insurance transactions as a commodity instead of a matter that requires close analysis.  The reason for this is simple; there is no money in it.  On average, premiums are too low to generate enough revenue per transaction to make it worth handling this kind of business.  The downside risk for failing to do so is out of all proportion to the percentage of revenue for the average brokerage firm where 20% of the clients generate 80% of the revenue.

Let’s have a look at some of the other policy segments and the various extensions of coverage that in a perfect world would be addressed in more specific detail;

Liability.    The big question here is; ‘How much is enough?’

  • bodily or mental injury
  • property damage liability
  • personal and advertising injury liability
  • libel and slander
  • tenant’s property damage liability
  • voluntary medical payments
  • non-owned auto
  • legal liability for damage to rented automobiles
  • contractual liability
  • employers’ liability
  • employment practices
  • errors and omissions (professional liability)

Business Interruption

  • Loss of profits or gross earnings
  • Extra Expense
  • Rental Income
  • Key Payroll
  • Accountants’ fees
  • Restricted access to business
  • Key supplier
  • Mortgage rate guarantee

Equipment Breakdown

  • electrical arcing
  • mechanical breakdown
  • computers, photocopiers, production machinery,
  • heating and air conditioning,
  • point-of-sale (POS) systems and
  • refrigeration equipment
  • pressure explosions – hot water tanks, boilers
  • centrifugal force

I have decided to save the best for last.   Crime is one of the most underserved risk segments and I haven’t even begun to talk about Cyber Liability or Environmental.   The number of businesses who suffer a crime loss only to learn the basic policy sub-limit is $10,000 or less should be a wake-up call, but for some reason the average business owner does not take up the coverage, or if they have, for an inadequate amount.

Crime

  • employee dishonesty
  • money, securities and other property
  • counterfeit currency and money orders
  • forgery, alteration, credit cards and automated teller cards
  • electronic fraud and funds-transfer fraud
  • professional fees
  • incoming cheque forgery

In closing I can only repeat my opening comment;

Beware the Package Policy!   Yes, the various extensions are important and valuable, but the amounts are basic and only serve to establish a basis for further dialogue.

Thanks for reading and have a great day!

Strategic vs. Business Planning – Is there a difference?

Strategic vs. Business Planning – Is there a difference?

Ensuring that you are protected in the event of an unforeseen insurable event, is critical to the success of any business.

With the pandemic, both individuals and businesses are having to adapt and pivot to succeed. That’s where business planning and strategy come in. The following article On Strategic vs Business Plan was provided by Everett Babiuk, BSc., MBA and owner of the The Alternative Board South Edmonton.

I want to thank Everett for providing this material and remind you that proper risk management and insurance protection should be an ongoing part of your plan. Reach out to me anytime. Sooner rather than later in the process is always a “Great Plan”.

Heather Cournoyer, CCIB, CIP

heather@thinkinsure.ca

587-597-5478

The Difference Between a Strategic Plan and a Business Plan

Every business needs a strategic plan. Every business needs a business plan. It’s knowing precisely what each plan entails and when that plan can be of most use that makes the difference between these two essential documents.

Let’s start by defining the purpose behind each type of plan. This can help both budding entrepreneurs and veteran CEOs avoid the mistake of pursuing the wrong kind of plan at the wrong time in the growth cycle of their companies.

The Strategic Plan

A strategic plan “is a written document that points the way forward for your business.” The focus of a strategic plan can include (but isn’t limited to):

  • Expanding business operations
  • Reaching into new market segments
  • Solving organizational problems
  • Potential restructuring of a business

By staying focused on your original purpose, goals, and objectives, strategic planning reintroduces you to “the big picture.” Its the basis for business owners to achieve their vision, which they communicate to stakeholders in a strategic business plan and program.

A strategic plan serves as a roadmap for determining what will likely lie ahead for your business in the next 3-5 years, while also including a series of actions or activities that can turn strategy into operational reality.

The Business Plan

Generally speaking, a business plan is needed when a company is in its earliest phase of growth. This plan offers a description of how your business will operate, its objectives for growth and financial success, and how it aims to get there. Essentially, it articulates the why behind a business.

Key elements include:

  • Executive summary and mission statement
  • Projected staffing and equipment needs
  • Short- and long-term marketing strategy
  • Financial statement, including anticipated start-up expenses and capitalization
  • Outline of management structure and operational processes

A business plan “is a broader, more preliminary document that sets your course when your company may still be nothing more than a twinkle in your eye,” notes BDC of Canada. This plan “not only accurately summarizes what your business is all about, but why its a viable proposition.”

Strategic Business Planning

 To recap:

Strategic planning is the systematic process for developing an organization’s direction. This includes pinpointing objectives and actions required to achieve that future vision, and metrics to measure success.

A business plan, as described by the Center for Simplified Strategic Planning, Inc., aims to define “the initial goals and objectives of the company, its structure, and processes, products, and services, financial resources [and] all of the basics that go into forming a company” and getting it up and running.

TAB offers its members a different kind of approach—strategic business planning. It’s the basis for business owners to achieve their vision, which they will then communicate to stakeholders in a strategic business plan and program.

Action steps embodied in a strategic business plan include:

  • Understanding your business. Assess where your business is today. Review core business information and revisit your vision, mission statement, and core values.
  • Analyzing your strengths, weaknesses, and threats. Conduct a SWOT analysis to evaluate where your business is operating at peak efficiency and where organizational weaknesses (and threats from competitors) might stunt future growth.
  • Defining objectives and setting goals. Drill down into specific objectives that will help you achieve your vision—everything from developing new marketing strategies and launching a new product to re-allocating key financial resources.
  • Putting the plan in action. Take action steps to translate the plan from paper to reality. Break tasks down into small steps, assign a responsible party to be accountable for each task and establish a schedule for reviewing your overall plan on a regular basis.

As we pull out of the events of the past year, strategic business planning is more urgently needed than ever before.

……. Everett Babiuk, BSc., MBA