In The Public Eye: Dissecting Complex Claims with Imperium

Intro (00:00):
Welcome to the Alliant In The Public Eye Podcast, a show dedicated to exploring risk management topics and challenges faced by today's public sector leaders. Here are your host Carleen Patterson and Justin Swarbrick

Carleen Patterson (00:18):
Welcome back everyone. To another episode out of In The Public Eye, today's insurance and claims environment is very complex. In some of our past episodes, we have talked about catastrophe claims and whether they're occurring more frequently, or whether this size of our claims is an occurrence of the way we are growing and the urban sprawl in developing there's a lot of different moving parts to a complex claim. And so, to talk a little bit more about it, we have invited Colin Daigle and Hunter Williams with Imperium Consulting to the podcast today.

Hunter Williams (00:54):
Thanks for having us.

Colin Daigle (00:55):
Thank you, Carleen.

Carleen Patterson (00:57):
Before we get started, Colin, do you want to talk a little bit about a background in your expertise and then introduce Hunter?

Colin Daigle (01:05):
All right. Well, thank you, Carleen. This is Colin Daigle and I'm with Imperial consulting and I've been involved in measuring economic loss, in claims, primarily insurance claims and contract claims as well as government contract claims, with a focus certainly on public entities and have dealt with a number of issues in there that we'll touch on briefly here today. But my formal background is in accounting and finance, a CPA among other accreditations.

Hunter Williams (01:38):
Hi Carleen, I'm and Hunter Williams. I've been working in insurance claims for the last 30 years. I started my career as an auditor with one of the big four accounting firms moved over to one of the large adjusting firms, independent adjusting firms, and have been now for the last 15 or 20 years, working directly for policy holders and helping them prepare their losses. I'm also a CPA and a forensic accountant.

Carleen Patterson (02:04):
So why don't you tell us a little bit about Imperium Consulting?

Colin Daigle (02:09):
Sure. Just briefly. Imperium is primarily forensic accountants, engineers, construction professionals and we measure economic loss for purposes. Again, as we've talked about insurance claims, contract claims and litigation. So, we do this for a variety of clients across multiple industries, and we've worked extensively throughout the US and outside of the US.

Carleen Patterson (02:33):
So how do you usually get involved in a claim?

Colin Daigle (02:37):
Well, as we start talking about claims, certainly the insurance claim side, we'll get a call from a risk manager, a CFO, potentially a general counsel. It depends on the nature of the claim and the complexity of it, but typically when a loss first occurs and there's some complexity to it, we'll hear from clients. And we also have ongoing clients that we work with and certainly reach out to them when we know that they may have been in an impacted or affected area, if there's a larger catastrophic event. Outside of that, we also get calls from lawyers who are looking for forensic accountants and claim prep experts to come in and help begin documenting claims. Measuring can the other way, I think with public entities that we tend to get involved is through an RFP process. Some sometimes we will see public entities putting out as part of their procurement process RFPs so that they have consultants among other vendors and service providers pre-qualified. So, we do that as well.

Hunter Williams (03:37):
Yeah. Colin, that's important because it's sometimes nice to go ahead and have an MSA in place before an event happens so that you could hit the ground running and I've seen that you get bogged down and trying to get engaged and it's just delayed starting to work. So, it’s always good, if you have an opportunity to get a new place, a master service agreement, so we could hit the ground running, should something happen.

Carleen Patterson (04:05):
It sounds like your involvement is very critical to the claim process, but how, and who engages your services? Are you contacted by a broker? Do you have a contract with the risk manager, or do you have contracts with insurance carriers? Can you elaborate a little bit more on that?

Hunter Williams (04:23):
Yeah, I would say it's mostly the risk manager. It can be the broker. We work for the policy holder, so it wouldn't be the carrier that would engage us. Although we've been neutrals in cases, sometimes the carrier will bring us in as a neutral because recognize our capability in a particular area.

Carleen Patterson (04:46):
So how soon once a claim occurs, should you be brought in, should you be brought in right away? Would you rather meet with your potential clients and have a little bit more of an understanding of their operations before a claim occurs from your perspective? When is the best time?

Hunter Williams (05:05):
If we're not already on an approved vendor list with a master service agreement, as soon as possible. We can come in and help you get the claims set up the claims process, help you vet some of the questions from the carrier and they typically would have a forensic accountant. So, we could walk the site with you as you're going through the process and understand how you were impacted. So, it's the sooner, the better is in my mind.

Colin Daigle (05:36):
Yeah. I think one of the key things too is we'll be brought in when there's a dispute in a claim sometimes after the claim might have been in progress from months or more. And there are elements of that loss measurement where there are questions or failure to agree with adjusters and carriers consultants. So, we'll be brought in at that point, but as Hunter pointed out, certainly consulting with us at the time of the loss. So, we can at least offer some guidance on how to get things set up as part of a loss recovery team. And then whether we need take a larger role or not can be determined as the claim progresses, but the sooner the better is, is the short answer.

Carleen Patterson (06:13):
So, talk a little bit more about some of the types of things that you get involved in. I mean, we've talked a little bit about claims preparation, but do you do forensic accounting? What are some of the engagements that you've been involved with?

Hunter Williams(06:30):
Well, typically when an event happens, clients are looking to recover loss revenue, via the business interruption. We can also assist the client in managing the documents in terms of the property damage. And that's a really big area where there's typically a large volume of information. My experience is public entities. Don't have a lot of people sitting around with time on their hand, so we can come in and be that external resource for them, with the expertise and knowing how to put the claim together and how it's going to need to be presented to the carrier. Typically, in a business interruption loss, it's going to be revenue, less saved expenses. And so, we can help them identify areas of loss revenue and also help them identify these saved expenses or potential saved expenses as we go through the process and make sure that we're capturing that data appropriately.

Colin Daigle (07:34):
Yeah. One of the things I would add to that when you think of an insurance claim and recovering that loss, it's the carrier it's consultants that determine coverage and, and then they evaluate the loss measurement we're on that claim preparation side. And so, what we're doing, we're not actually determining coverage. We're not in a position to do that, but we understand how that process works. And as you get through everything from business interruption, extra expenses and certainly property damage. Imperium, we've set up so that we have that expertise, understanding how different costs might fall in different buckets like labor costs. But the premium time portion might go into an expediting or extra expense category versus direct. Our engineers and construction professionals help with those rebuild costs and certainly looking at how those costs can be different at the time of a loss and making sure that we're able to document and present those. So, we think about it from that holistic perspective, but also understanding our role and we're trying to develop documentation and a loss measurement that the carrier is going to be comfortable with so that the insured can recover its financial loss.

Hunter Williams (08:48):
Right? The more fully documented the loss is, the quicker the claim and insurer will get their money.

Colin Daigle (08:56):
One additional area that we specialize in certainly is in the construction claim space. And that can be, under the insurance umbrella. The builder's risk claims are the most typical, but you're getting into some different capabilities measuring that loss largely around how construction costs and schedule. So, the performance of a project is documented and that measurement being at the time of the loss, the status of a project and the cost that it takes basically to get it back to how it was prior to that loss. We also, in addition to that, certainly with public entities, we will help them with, project audits and project review use, where we do see RFPs put out for this where different municipalities, different states, different divisions within these states, such as departments of transportation, they'll put out requests for construction consultants to come in and help monitor and audit the costs that are being billed against different contracts they have, for capital improvements, capital projects. And so, we've got a history of doing that over the past 25-30 years as well. And those capabilities quiet, frankly, are very consistent with the capabilities of documenting insurance claims, contracts claims as well in terms of understanding what a cost is and how it complies with a contract or a policy.

Carleen Patterson (10:18):
And the question that every public entity and every risk manager wants to know is how are you paid for your services? So could you elaborate a little bit on that as far as who pays and when,

Colin Daigle (10:31):
So, our services are, most often fee by the hour. And if you think of what is the cost of what we do, we're typically dealing with an unknown scope of work when a claim happens because the, the phases of a claim are very much after a loss occurs, somewhat of an investigative phase of: Hey, what happened here? What's the scope of the damage. And then there's a phase of really planning, okay, what do we need to do to repair it and get back as was, and ultimately get back up and running. And so, as we understand those phases and the role of a claim prep consultant our scope becomes better understood. So, we go by fee by the hour and, we're typically directly engaged by insured. So, the clients, and again, within the public space, you know, ranging across, everything, healthcare, municipalities, different local state governments, things of that nature. And then we also certainly look at the actual policies where there may be coverage for professional fees or claim prep expenses that can be reimbursed as part of the claim. And so, any of the instructions or descriptions within that claim prep language will certainly evaluate and talk to our clients about so they can be positioned to recover the full cost of our work as part of the claim.

Carleen Patterson (11:55):
So, public entities usually purchase goods and services through a procurement process. Is this necessary in order to use claims preparation services, or how have you worked with public entity clients in the past?

Colin Daigle (12:08):
Again, this is going to be more, something more prevalent within public entities where they may have this procurement process when they do have a loss, they sometimes will work quickly through that or waive it. So, it really depends on our clients. And again, this is really for anybody within the public entity sphere, listening to this is understanding if you have responsibility to put an insurance claim to other or any claim, and you think that a consultant will need to go through that procurement process and it could be involved, which they can be then it makes sense to, to kind of look out, ahead prior to any events so that you can have at least one consultant, if not more on call or having gone to through that process. So, they're ready.

Carleen Patterson (12:56):
I think of the, one of the best ways for our audience to understand your role in the claims process would be perhaps to give a few examples of some of the claims that you've worked with and where your services have benefited public entity clients, whether it's from a property claim. We talk about catastrophic claims, but where would, and what kind of entities would really benefit from your services?

Hunter Williams (13:23):
I've worked on some losses associated with some of the wildfires that happened out west, and there was a loss of tax revenue to the municipality. And I'm one of these strange guys that I actually look at his hotel bill and looks at his auto rental bill. And if you look in enough detail, you'll see taxes there such as occupancy tax or stadium recovery fee. You look at the auto rental charges, usually have some sort of airport tax associated there. So, if, when there's a fire, you may not have people flying in. If the city is evacuated, you're losing the hotel revenue, but not just the hotel revenue of the hotels, the municipality itself is losing that tax revenue, that tax base. So, it's a different revenue stream, but like most business interruption cases, it's lost revenue, less saved expense. It's just, how were you impacted by the event? And that's what we try to quantify. I've had the same thing with an extra expense case where a municipality provided their own electrical services to the community. They had an issue with the facility. They couldn't provide those electrical services, but in order to keep the city running, they had to purchase the electricity from an outside vendor, which cost more money to produce so they had an extra expense claim. So are just sort examples of how municipalities and public entities can affected.

Colin Daigle (14:52):
Yeah. And I would add to that, certainly in some of the larger catastrophic events that occur, there may be a FEMA aspect to claims. And so, we work really hand in hand with our clients to set up a loss recovery strategy and where there is insurance available in place. That's typically, what is first exhausted or used, and then amounts that aren't covered. There's a number of different situations, but there may be an opportunity to recover some dollars through FEMA. What's important is understanding from the beginning, how a loss is likely to develop and then where those costs are likely to be recovered and then what needs to be done in order to document that. So, as we talk about examples, if there is a FEMA opportunity for recovery and it's certainly necessary for the public enemy, we're going to look at that early on and make sure that that's part of the process.

Colin Daigle (15:47):
The other aspect, when we get away from the insurance claims a little bit, but some examples on the public entity side. We've worked, most recently with different hospital systems, different departments of transportation on these construction audits and construction claims, where again, there are many public entities, those that are building out infrastructure and capital projects that will have this requirement to have consultants. Either provide some monitor monitoring or audits of the work or be prequalified or on call to help with any potential contractual claims or change order issues that come up. And so, we've done that across a variety of different types of public entities.

Carleen Patterson (16:30):
Quite often, I spend some time with clients and prospects talking about the difference between an agent and a broker, and that I am representing my client to the insurance company. And I think there's a little bit of confusion when you come in. And so, could you clarify who it is that you're representing? Are you working for the insured or my client or are you working for the insurance company? And I think it will be helped to clarify so that public entities, aren't afraid to engage your services, thinking that you're going to be working for the carrier. So, could you elaborate a little bit on that?

Colin Daigle (17:08):
So, most frequently we are working for the insured. That's certainly this base that we're in and it's not impossible for us to advise an insurer or insurance company. We've certainly worked with them in a variety of capacities, but we typically work for the insured. And I do find that there is a group of consultants that work for insureds and then there are those consultants that work for the carriers. So, it's not a hard and fast rule, but we typically work for the insured.

Carleen Patterson (17:43):
Well, thank you very much to both Colin and Hunter for joining us today. We recognize this as a challenging time to be in public entity risk management. And we continue to focus on providing continued information and resources as we finish navigating 2021 and look to 2022 and beyond.