by Dave Gurnsey, SLS, P. Surv, CLS
The news this week has the headline that insurance companies paid out approximately $3.2 billion in severe weather related losses in Canada. These claims result from flooding, ice storms etc and are largely unpreventable, although some would argue that more forethought into land use would help to mitigate future losses. Regardless of the cause, the claims payouts affect the bottom lines of insurance companies and will likely result in higher future premiums. What the insurance really does is reduce the losses of those directly affected and spread that over everyone that purchases insurance.
The same is true for the Errors and Omissions insurance held by land surveyors. Any losses paid out directly affect premiums in the long run and every policy holder ends up paying for claims through their premiums. The differences between losses under E & O insurance and the severe weather losses, is that losses under an E & O policy are largely preventable. If we could all prevent losses, we could all experience lower premiums based upon a lower loss ratio experienced by the insurance company.
While an error by a surveyor may sometimes seem to be beyond their control, a closer look will show that a little more time spent and a few more checks could eliminate almost all claims. The errors that happen are almost always “simple”. We all have checks and procedures in place to catch errors but sometimes in the rush of everyday business, we miss the extra check shot or the final review of the notes or plans. The results are sometimes catastrophic.
The costs of a claim are many and varied. While the insurance company may cover the majority of the financial part of the claim, the surveyor is still responsible for the deductible. But that is only part of the cost of a claim. There are very significant personal and professional costs to a claim. The surveyor will spend many hours investigating what went wrong, discussing how to best remedy the results of the error and dealing with adjusters, insurers and the client to finalize the claim. Added to this will be many hours of gut wrenching paralysis as the fact of the error and the consequences of the error sink in. There is also the potential for damage to the professional reputation of the surveyor. And finally, in the case of a claim that exceeds your limits, the potential for bankruptcy of your practice.
All for the lack of a bit of extra time checking and reviewing. Let’s all attempt to make our practices more fool proof and save ourselves some grief and dollars.