Contractors Equipment Boot Camp-Contractors Equipment Boot Camp

Contractors Equipment Boot Camp

Video Transcription

by Inland Marine Underwriters Association. I'm Eileen Monreale, Education Training Specialist at IMUA. Thanks for joining us today.  So on your screen, you will see the attendee control panel, which shows you who else is in the meeting, and we have a great turnout today.  If the control panel does minimize by default, simply click the orange arrow to bring it back. You can always go to the view menu on the top of the control panel  and uncheck the auto hide option if it happens to be collapsing on you. The control panel also contains the handout, which is a PDF of the slides,  where you can download that PDF of the presentation. And most importantly, it's where you can find the question box to share your questions with our presenters.  Our moderator will share their questions after each presenter, and then again at the end with a final cue.  However, feel free to enter your questions at any time, and to encourage your engagement, IMUA will award a $25 Amazon e-gift card to the most slash best engaged attendee  as a token of our appreciation.  Please be aware of the IMUA disclaimer,  and without further delay, please join me in welcoming today's moderator, the multi-talented and amazing Gabrielle McCann. Gab is a senior underwriter of builders risk at Everest,  and we're delighted to have her with us today. Take it away, Gab. Thanks so much, Eileen. I want to thank everybody for taking the time this afternoon to join us,  and obviously thank the IMUA for the opportunity to contribute to moderate today. I've been with Everest for about eight years. My first five years were in inland marine claims,  and I have since shifted to a builder's risk underwriting. And I can safely say that in my beginnings, IMUA was instrumental in helping me understand  the risks that were coming across my desk in the claim scenario each and every day. So I hope that everyone gets as much out of this as I did. And I think it's important  if we're gonna be spending this kind of time together this afternoon, that we understand who all is in the audience. So as folks continue to come in,  I am going to launch a poll to just get an idea of the composition of our attendees here.  Just give me one second.  I am going to, we first want to understand everyone's discipline within the industry.  So I'm gonna go ahead and launch that, and we'll give a few seconds for everyone to respond.  Take your time, don't be bashful. If you are another discipline, we would love to know who you are.  That best helps us sort of comment, perhaps to a broader audience, or understand if there's any sort of additional information that we can provide while we're going through here.  All right, I'm gonna go ahead and close the poll, and then share our results.  Looks like majority of us are underwriters. We've got some claims folks with us. Thank you for joining. Lost control and other.  So I will take a look and see if anybody's willing to advise what their other capacity is.  We'd be happy to know, and we're glad that you've joined us.  All right, no takers on that one, all good.  All right, so next, I know we had popped through. Would like to see sort of what everyone's experience level here is within the industry. So I'm gonna go ahead and launch that one.  And same thing, just give everybody about 20 or so seconds to respond here.  Take your time, be honest.  And we obviously look forward to hearing sort of everyone's experience as well,  sort of through how much time they've had in the industry. Obviously you see more the longer you're here.  I think we're mostly responding to here. We have an excellent spread. All right, I'm gonna close this, and share our results. Yeah, we can't vote ourselves, huh?  Well, I don't think so, but we have a really nice spread, actually. Looks like we have 24% of one to five year experience, about 18 in the six to 10,  and then close to, well, 31, obviously, in the 11 to 20 range, and 27% in the 21 plus.  So we are all in good company. I think everyone brings a unique perspective. So again, with questions or comments, certainly we'd love to collect them through the presentation,  and we'll address them at the end of each session here. So I'm gonna hide this, pop that one back, and introduce everyone. Since now we know who our audience is,  we can get into our presenters. We have John Clark with Selective here to chat with us today, as well as Dan Fromm from Liberty, and Josh Schonberger from Clark Construction.  So what's really awesome about this panel of presenters is that everyone is providing us with a different perspective. So today our agenda is to, first and foremost,  discuss sort of the underwriting of contractor's equipment.  Second, we'll talk about claims, claim scenarios, sort of emerging trends with contractor's equipment, and then understand a risk manager's perspective with Josh,  which I'm really super excited to hear. And then just for our audience, worthy of note, we are going to try in between each part to take between a five and 10 minute break,  just so you can get water, bio break, anything that you might need to carry through. We acknowledge this is a long session, so just wanna be mindful of that time.  I'll certainly announce whether it'll be a five or 10 minute and a time to come back, so that we are not a rudderless group of folks here.  And then of course, at the end, we'll do a final Q&A, and I will announce the recipient of our gift card for participation.  So without further ado, I'd like to introduce John. John, if you could just tell everybody a little bit about yourself before kicking off, that'd be great.  Sure, thanks for everyone for joining us today. My name is John Clark. I'm an Inland Marine Segment Manager for Selective Insurance.  I handle the Northeast and New Jersey territories for the company. I've been in insurance, it's kind of hard for me to say this out loud, for 30 years.  I don't feel like I've been in the industry that long, but my dad was an agent. And when I graduated from college, I said, I'm not gonna get into insurance.  And then of course, my first job out of college was with the Aetna. So I've been in insurance ever since.  So today I'm gonna be talking about underwriting of contractors' equipment, what we kind of see on a daily basis.  And then we'll go through my slides. If there's any questions, you can always just pop a question in the chat, or you can save it for the end.  Either way, we love the Q&A part of it.  All right, so I'll be talking again, why contractors' equipment, the types of equipment that we see on a daily basis that comes across our desks from our agents,  our underwriting tools, what we can use to help underwrite risks, the actual underwriting rating of contractors' equipment, and then questions as they come up.  So why contractors' equipment? So contractors' equipment in 2023, M&M Marine generated about $15 billion in premium. With contractors' equipment,  it usually is the largest line of business when you break it down on the mix. Broad scope of equipment, $25 shovel up to a $5 million crane. It's not location-specific.  Generally, the forums doesn't put a location-specific classification on there. And then for most insurance carriers, contractors' equipment is a highly desirable line  of business, and it is competitively priced.  I said earlier, for most carriers, it's extremely profitable line of business. For most, it's either their second or their first generator of premium.  For us at Selective, for example, it makes about 40% of our book is generated from contractors' equipment called by builders' risk. Other companies, it's a little bit different,  but we're all chasing the same premium. And with it being a non-filed class of business, all states, it's the discretion of the underwriter. So it's just judgment rating.  We don't have to follow cloud rates like we do for some of our lines.  Oop.  Okay, so when we are talking about risk, I think a lot of us see, probably number one is from excavation grade in water and sewer type of contractors.  This is kind of what we see on a daily basis in our submissions from our agents. These are some of the thoughts that kind of run through my mind when I get these type of risks.  First is like, is the equipment left on site at the end of the day?  Is the equipment fitted with a tracking device like a low jack? Our company uses NER, National Equipment Registry. So if it's stolen, the police can track it.  We waive the deductible. It's a nice little feature.  Do they paint the equipment a certain color? Here in the Syracuse area where I live, there's a big paving contractor and all their equipment is painted like a Carolina blue.  So it's very noticeable. So, and it also says their company name on it. So if it gets stolen, it's probably going to stick out like a sore thumb.  Do they have their company logo stenciled all over the equipment? How is the access to the site secured? What type of projects do they focus on?  Are they truly an excavation contractor? Are they scoping out and doing other things  that are kind of outside their area of expertise?  Here, you got the grader, you got the loader of various sizes, excavator, the bulldozer. These are things that when we see them on the list, on the accord,  stuff that we're all pretty used to, there's an articulated dump truck there. So these are the kinds of things that kind of get my brain going  when I see the submission come in from our agents.  I think we have a polling question coming up. We do. So I'm going to go ahead and launch this now.  How are we covering an articulated dump truck?  Got about 10, 15 seconds.  I'm seeing some doubt trickle in here.  Ooh.  I'm confident in your answers. Yes, totally. All right, I'm going to close this in four, three, two, one.  All right, let's see our results.  89% true and 11 false.  How do we do, John?  I guess it all depends on how your company looks at it. For us, I would answer true. The articulated dump truck, it's not designed for highway use.  It's generally not plated in most times that I see that. So we would put it on the inland marine schedule for physical damage, not liability, but just physical damage.  So yeah, I would do it. And I think most carriers would do it. Now, some people have, if that slide was instead of a dump truck,  if it was a concrete truck or a concrete pumping truck,  some companies say yes and some companies say no. I like those to go on the auto because those are plated, they're registered,  they're designed to be on the road and not going off-road. So I'd like those going on the auto. It tends to be a little more expensive  and that's when the agent comes back to us and says, hey, can you put these pump trucks  through physical damage on the inland marine floater? Because they know they can get a cheaper rate.  To which the standard underwriter answer applies, right? It depends. Well, it depends who's the agent, what's the account, how much premium is tied to it.  Yes, yes, we're flexible is what we'd like to say. So yes. That's it. I guess no answer is a hundred percent written in stone. Right? It all depends.  And that's the great thing about inland marine, right? It's the flexibility, especially in this line of business. So, so great. I'm glad that everyone answered that  and we'll just keep moving on.  All right.  Another thing we see, big push for street and road type of contractors. So here you have a portable asphalt plant.  Is that truly portable in that picture in the top left? Probably not, I don't think. So that maybe that goes on the property and not really in the marine.  But again, agent might call you and say, hey, I need some flexibility.  The property is pretty expensive. Can you put it on an inland marine floater? Maybe, let's talk about it. Let's see what the value is. Or if it's truly portable  and they're moving it from job site to job site, setting up a temporary yard. Okay, it's portable. We'll cover it. The milling machine, that's the big piece of expensive equipment.  Those are $850,000 or more, pretty complex piece of equipment. That concrete pair in the bottom left, I've actually never seen one of those in person,  but that is a massive piece of equipment. So the exposure here is you got to worry about a lot of this equipment's on the major highways, expressways, throughways.  So you got to worry about someone on their cell phone not paying attention, crashing into it, things that you can't really control, but things that you want to know  how the stuff moved off the road at the end of the day.  How is it secured? Do they park in a certain manner so that people can't take it? Do they have kill switches on the piece of equipment? Stuff like that. But the key thing here  when we're talking about the equipment is mobility is the difference between contractor's equipment versus business personal property, or just putting it as a property,  like the asphalt plant.  Okay, so when we talk about the next kind of thing that we see that falls under contractor's equipment, and I'm just kind of hitting things that I kind of see on a daily basis  from the agents in my territories. Recycling. So tougher glass, you got a crane here with a magnet picking up the recycled and broken down pieces of scrap metal,  throwing it into a shredder, or they're putting the compactor, they got the track loader moving stuff around. So when I take a look at the stuff, I'm thinking, boy,  this stuff gets a lot of wear and tear. It gets beat up pretty on a regular basis. I usually go with a higher deductible. I ask about maintenance of the equipment,  probably going to throw on a little bit higher rate. So these are things that,  I start thinking when I see the scope of business is recycling.  The shredder and the compactor, as are pictured here, if they're inside the building, are you going to put it on inland marine, or maybe you want to put it on contents  under the property policy? Again, I usually go for this type of stuff, higher deductible and a higher rate for this one.  Right, quarry operations. Now, I personally, I've never written,  a dredge, but these are, I would assume very large and very high value piece of equipment. Shown here, the dredge, I'm going to guess it's a couple of million dollars,  that huge power shovel, and then you've got the crushing plant. So big ticket items. I would say, when I'm looking at this, I'm going to run a risk meter to rule out flood.  I think most forms, flood is not excluded, at least our format we use, it's not excluded. So what we generally do when we have a large amount of equipment,  we're going to run a risk meter to make sure that flood is not an issue at these locations. Obviously that dredge is on water. So, if you have a waterborne exclusion  that you have to remove from your form. So these are the things that are kind of churning in my brain when I see these types of operations. And if flood is an issue at,  where this power shovel is being used, we usually have the ability to put on an endorsement to exclude flood at that name location. Do they have an emergency evacuation plan  in case the location does flood, they're going to move it to higher grounds. So these are the things that we want to be asking from an underwriting standpoint  when we see these types of risks come in.  We see a lot of rigging, material handling, metal erection type of accounts.  Every company's got a little bit of a different appetite. Generally truck cranes are okay. Like for us, we'll do pieces of equipment up to a million dollars.  So most of these would fall into that, the truck crane, the crawler crane.  We'll ask additional questions. Are they wide loads? They need an escort to and from the sites. Hydraulic fork would be used in a rigging operation.  And if they are a true rigging operation, are you going to have to provide them with rigging liability? That's another exposure. And then upper right-hand corner is a tower crane.  Now that's something that we don't do. I would be interested though, anyone out there writing a tower crane of that size, and I don't even know what that would be  in terms of value, but I'd be interested to see if anyone does that. I think it'll let us know in the chat maybe, and like what other underwriting questions  would you be asking on a tower crane?  I would assume you'd be worried about the setup and the takedown, stuff like that, and then probably wind, maybe run a risk meter to see if it's a wind is an issue in that area.  So if anyone writes those, love to hear your input either now or at the end, but those are the things- Friendly reminder, we are offering a $25 gift card for engagement, folks.  Right, right, that's right. Good incentive there to participate, right? So again, that's what is kind of churning in my mind when I see this type of exposure.  And a lot of times you find that agents don't even think about the rigors liability. So someone has a truck crane, they're going to move a piece of equipment  from the parking lot to the roof, like an HVAC contractor, and it's on the hook, and it gets damaged, they're legally liable for it, but you need to have that endorsement  for rigors liability in most cases to cover that type of exposure. Otherwise, there could be a loophole in the coverage. So always things to ask  when you see it from across your desk.  Next slide.  Okay, logging and forestry. So, again, this is kind of another tough class to the wear and tear of the equipment, and a lot of times it's used in rural areas.  So upper left-hand corner, Delavanture used to cut down the trees, it's got a big saw blade at the bottom, it's on track, so you got to worry about overturn, upset.  They bring it back to the main yard for processing. That excess waste gets made into mulch generally,  so they have that tub grinder there that's portable, or they use a chipper that's throwing the chips into the back of an 18-wheel that had been moved off,  and they're cleaning up the site with a skidster. So a lot of moving parts for these type of operations, a lot of concerns, because a tub grinder, for example,  big piece of equipment, pretty expensive, definitely over a half million for one of those. We're going to want to ask, hey, are they following a cool-down procedure?  Is it equipped with automated fire suppression system? If it's not, do they have portable fire extinguishers around that piece of equipment? Because my expertise, not my expertise,  but in my involvement with these type of equipment, the tub grinder in particular, or that big chipper, they do have a tendency of catching fire. So we definitely want to make sure  they have a cool-down procedure, they're sticking around for 30 minutes, they're getting rid of all the wood, dust, and debris on top of the machine,  and that they are following that procedure. If not, then we're probably going to maybe pass on it. And obviously you want to see the loss runs to see how it performs.  But again, a tough class.  I actually have an agency that does log in. We go much higher rate, bigger deductibles.  So it can be done, but it just needs to be done. We'll look a little more questions, especially we're worried about these things out in the middle of the forest.  So if they catch fire, no fire department's going to get out there in time to save it. So you really want to make sure they either have an automated fire suppression system  built into it, or they have large portable fire extinguishers on site to put the fire out.  This equipment also is not used solely in the logging forestry industry. A lot of large site contractors are now using this type of equipment. They'll go into a 50 acre area,  they'll clear it, they'll do a development, or something like that. So it's not just strictly logging, but the same caution should be used when underwriting this type of equipment.  Okay.  Okay.  Energy.  My company doesn't do this, but these drilling rigs and the work over rig, these are very large, expensive, complicated pieces of equipment. So your company might rate them,  your company might not rate them. So if you do, what's the capacity? Can you do 5 million? Can you do 10 million? Do you max out a million? Or are you just covering the things  that are associated with the businesses down the road? Maybe you cover someone that's doing some of the work around the site. So tough class.  I think it's more of a kind of a specialty line. I personally don't have a lot of experience in it. If anyone knows about this stuff and their company does it,  love to hear some, maybe some input at the end on what you do in terms of pricing  and what you look to underwrite those locations. I mean, that drill rig obviously is out in the middle of nowhere. So I'm sure there's a lot of questions  that you would ask from an underwriting standpoint about how do they fight a fire there if something breaks? Is it equipped with some type of fire suppression system?  So that'd be interesting to get some feedback at the end on that type of equipment. But it's out there. It's becoming more prominent and maybe my company,  maybe we'll dabble into it at some point, but I don't have all the answers on that one, but it's definitely out there.  Okay.  And then a lot of times you get submissions from the agent and your property not covered kind of comes up. We're not going to cover the autos. We're not going to cover the trucks,  things that are designed for principally highway use. Obviously aircraft, watercraft is excluded. Property while waterborne, that's usually an automatic exclusion,  but are you going to remove it? Do you have the use? Like our company, we use special provisions or you can use a manuscript to remove that and then you can cover it.  Property while located underground, that's a pretty much a standard exclusion. Obviously contraband and drones. We don't do drones on our contractor's equipment form.  We actually have it on our miscellaneous property in a drone form specifically for drones. So we don't like to cover on our contractor's equipment.  I know a lot of agents just like to send in stuff, just throw it on a contractor's equipment form, but there's other places for this type of equipment.  And maybe you make a concession to the agent, to the accountant. Maybe you write a $5,000 pontoon boat that they use for,  maybe it's a contractor that has some on a landscape and you've got to take a small piece of equipment out to an island that they're working on or something like that.  So, but generally the stuff is not covered.  But again, if you have to make concessions, you can use special provisions or manuscript or however your company does it to match what is needed.  And I was talking earlier about the concrete pump truck.  So you can see that bottom picture. There's one right there. I just had a submission the other day.  They wanted to cover six of those various values from 450 to about 850. And they didn't have any other contractor's equipment. So I just said, nope, those are going on the auto.  And then the agent said, well, we're not going to be competitive, but sorry. That's the right place for those is the auto in my mind.  And obviously, when we get a submission in,  small tools, compressors, generators, hammer, that you can just do under a miscellaneous property or put in a small tool floater to cover those types of things.  But so that's the thing with contractor's equipment. You're covering large stuff, you're covering small stuff and everything in between.  So when we actually get the underwriting submission in,  we really strive and tell our folks, we really want a completed accord application.  If you have a supplemental application that goes with it, that's great. I think I'm going to maybe provide you with an Excel spreadsheet that shows all the equipment,  loss runs, what are those loss runs?  What do they show? Are we going to go to Google, check out the website, go to YouTube, maybe to check out a piece of equipment that we're not familiar with or we don't recognize?  We really push back on our agents  and try to have them not submit an accord that just says scheduled to follow. Because what happens is it usually doesn't follow and then they bind it and then we're chasing it  down the road. Had one recently that sent in $13.5 million scheduled to follow. It got found somehow and now we're chasing the agent  and the insurer to provide us with what we're writing for 13.5 million items. Do we have four items that make up that 13.5 or do we have 400 items?  So that's probably on my to-do list tomorrow to track that down and see what we're actually writing. So the more information they give us, the better it is for us to do our job.  And again, I use the internet. I use Google all the time. What's a webpage show? Any press stories, good or bad? Facebook, are they showing stuff that they shouldn't be showing?  Are they boasting about stuff that they might not be wanting to share? Did they have an excavator on a barge up in a lake? Something that you want to be worried about.  And again, if you're unsure about a piece of equipment, YouTube, put in the name of the piece of equipment and it's going to show you what it is. I do that a lot.  All right, so then once we get all that information in,  now we're going to sit down and we're going to review it. So what's the type of contractor? What's the scope of the work that they are performing?  Do they offer various services? Are they a concrete contractor that's now also doing builder's risks or something like that  that just doesn't make sense? Does the equipment on the court match their operation? Again, are they entering a new area of service? Now, how many years in business?  If a new venture, what is your company's stance on that? Is it an automatic decline or do you allow them, if they have experience in it,  they've been working for somebody for 20 years and now they're going to start their own free or site development and they have the experience. Okay, I'm okay with that.  But if it's me, 30 years of insurance and I want to be a site contractor, I'm probably not going to write myself. So that's what we're looking for.  Does the risk operate outside the footprint of our company? So our company, we're not in all 50 states yet. We're in about 38, 40 states.  So are they out in California or are they out in that area where we don't have any staff, any claims to handle that?  That would pose a problem. You have to get a third-party vendor to handle the claims.  So what's your company's stance on out of footprint?  Again, loss experience, what do the loss ones show? Is there a story behind the losses? Are losses an automatic decline? For me, they're not, unless it's something being submitted  for a 2024 piece of business and they had a huge loss two months ago, probably not going to write that. But if there's a story, it had some frequency, it took steps to correct it.  Maybe they're having some stuff stolen from their job sites and they've taken steps to put kill switches on the equipment or they park in a certain way  where it's very hard to steal it. Or they put up fencing and security lights and stuff like that and they haven't had any losses in a couple of years. Okay, I'll write it.  But, or it's a big shock loss. What happened? Give me the details. So it's not an automatic decline in my book. The more that we can get from the agent,  the better it is so we can make a decision.  And I mean, I wrote a large account a couple of years ago.  It hadn't had any losses in 10 years. We wrote it and they had a $350,000 loss three weeks into writing it. So, you know, stuff looks great on paper and then things happen.  You know, you can only ask questions and then go where you got, if it feels good or not.  So we'll talk, you know, about rating.  I mentioned it earlier. Most carriers, contract equipment is a non-filed rate. So therefore it's judgment rating. You know, when I first started doing inland marine  and way back when, 2008 is when I got into inland marine, a dollar was a good rate, you know, and then 75 cents was a good rate.  And now it seems, you know, 50, 35 cents is a good rate. So it all depends, you know, on, again, the risk, the limit, the agent, stuff like that.  Is it high hazard equipment versus low hazard? Is it, you know, is it logging equipment? Is it cranes? Is it those tub grinders that I showed earlier?  You know, does it warrant higher rate? Or does your company just say, we just do everything at one rate?  We tend to do like a blended rate. If it's a higher hazard, we could give that a little bit higher rate. And the stuff that's a little bit more vanilla, we give that a lower rate.  You know, again, area of operation, you know, is it in the Northeast where it's going to sit for the winter and not be used? And it's in one location, you got to worry about that  in terms of like a fire, or is it down in the Southern area, for example, where it's used all year long, you know, like a play into your rating.  In my mind, it's not being used like the Northeast, it's getting put away for the winter. I'll probably go with, you know, maybe a little bit easier rate  because it's not being used all year long. You know, what's the valuation? You know, are they asking, you know, for $800,000 on a 2005 cat builder? That doesn't really make sense.  You know, how has that valuation arrived at?  Lease and rent and exposure, that lately seems to be kind of a hot topic in terms of seeing a lot of accounts out there renting very high limits for a very short time.  So what's your company's standpoint on that? Do you have a way to flat charge for that short time, or do you have to handle it a different way?  Does a rental limit far exceed their own equipment?  You know, do they have the dreaded $1 of owned equipment in order to get the lease and rented equipment endorsement? I mean, that's how our company does it. It's an endorsement.  So you have to have some schedule of equipment in order to get that. So I had an account the other day, you know, they only had $200,000 worth of equipment,  but they're going to rent a million five on an annual basis. So, you know, to kind of get my radar up, like what are they renting?  Why don't they have their own equipment to do the jobs? So just things to think about when you're trying to price an account. And I mean, if the agent can give you,  hey, this is the expiring, super easy, right? You come in a little less maybe,  but that's what is kind of going through my mind when I'm working my desk and I'm getting submissions when I'm rating, I'm kind of factoring in all these things.  And then I talked about a little bit in a previous slide,  kind of find this to be a hot topic lately is valuation, is, you know, how are the agent and insurer coming up with the prices on the submission for their equipment?  And here's kind of a good example, you know, 20, 24 cap, the model is this loader here that's putting in the aggregate at a quarry,  new, I had this submission a couple of months ago, it's about a million two for the new piece of equipment. So it kind of got my brain going, I kind of did a little internet search,  just hop on Google, put in the model in different years. And it's just, I was surprised at the valuation, how much it fluctuates based primarily on hours used,  not so much on the year. So, you know, 2019, a lot of hours, 12,000 hours, you know, just under half a million. Well, 2014 with only 4,700 hours was almost 800,000.  You know, 2015, 32,000 hours, yeah, 275. So, you know, how is it being arrived at? Are they, you know, are they just making the number up or do they have a formal appraisal?  Maybe they went to a third-party vendor, did they go online and get that? Nothing worse, but I think when they send it in and say, can you help us arrive at the valuation?  That's not our job to do that, that's what the agent has to do. So that's kind of a hot topic lately, at least in the areas that I handle,  is trying to come up with an accurate valuation for these big pieces of equipment. Because just like the used car market, it's so, there's not much out there and everyone wants it.  And so the prices have just gone, you know, through the roof on this type of equipment. So that was kind of my dog and pony show for this part of it.  Hopefully you guys will have some questions at the end and I appreciate everyone's time today. I'm going to throw it back to Gabrielle. Thanks, John.  So I actually, when I first started underwriting, I think I spent three months looking at equipment accounts and the valuation portion was such a hot topic for us.  I was wondering if, and I recognize that, especially when you are working as an underwriter and there's volume, right? That you have to, you got to go through  a lot of accounts, right? And like you're saying, there's really not a ton out there that will help you do like an ensure to value type documentation for your file, right?  To justify what kind of limits you're putting up on certain items. If there's any type of like shortcut or like rule of thumb that maybe you use  that, you know, folks who are perhaps on, let's say like the 10 year and under side of their experience in this industry might just sort of keep in their pocket  in case they need it. And I'm actually, I'm seeing some questions roll in. So I'll let you answer that one and I'll start parsing through these. Yeah, I mean, for myself,  when I see the core and I start kind of going down and I see the equipment and I see the year and then I look at the values and sometimes the stuff jumps out and I'm like,  oh, that seems awful high, or that seems really low, you know, depending on what it is. So I'll just go to Google and I'll just literally put in your make model  and see, and then, you know,  all these, you know, heavyequipmenttrader.com and all these websites pop up. I just go to those and I'll go to a couple of different ones to get kind of an average value.  That's how I kind of double check it. But that's what I would use. Google is my best friend for  builder's risks. It's for contracts and equipment. I use it all the time just to help cover myself.  And kind of in the same vein, we're talking about high values. I talked a little bit earlier about  the lease and rented. We find, or I find, it's very difficult when you get a submission in  and they're like, hey, we want to add this $1.5 million piece of equipment. And then you look at  their schedule and they don't have anything close to it. So then I'm thinking, all right, this is not a purchase. This is a rental. So then you go back to the agent. Hey,  is this a purchase or a rental? It's a rental. How long are they having it for? Oh, they're going to have it for three days. So then the quandary is, what premium do you charge for  three days for $1.5 million? You can't charge them $10,000. You would love to charge them $10,000,  but you can't charge them $250 either, because if they had a total loss, you're probably going  to get a pink slip and say, why did you cover that? So that's what kind of keeps me up at night and gives me gray hair and makes my hairline recede. It's just-  Great. We have some comments from the audience and a couple of questions. Catherine Riddell,  thank you. She's mentioning machinerytrader.com as well as forestrytrader.com. I can offer,  from my experience, cranetrader.com. The tricky part about that stuff though is a lot of the high  ticket items will say, call for price. And then you're like, come on, I don't have all day to  chase this data down. But yeah, I definitely agree on doing a general survey and obviously leverage  the interwebs. There's always, I guess, you always push back to the agent and say, hey,  how did you or the insured arrive at this value? I mean, you could always put it back in their lap,  but we're here to kind of help them as well. But sometimes we don't have all the answers, but if they say, hey, we took it to the John Deere dealer that lives down the street,  stop by and give me appraisal. Okay. I mean, that's one way to do it.  Right. Right. Okay. So we have a few questions. Let's see. First, as underwriters, what can we  look for to protect our carriers from contractor's equipment losses? And are there a couple of best  practices? Well, that's tough because I had mentioned earlier, I had this really large account. They have got like 35, $40 million of equipment. Again, I had 10 years loss runs,  no losses whatsoever. Right in January, about three weeks later, total loss fire. Like you can't underwrite and prevent that. So it's just really asking,  you know, what's their maintenance program? Do they have their own maintenance department or do they have Caterpillar or John Deere or whoever come out and do maintenance? Because  in tough economic times, what's the insurer going to do? They're going to cut back on maintenance, right? They're going to maybe skip an oil change, maybe not change out that hose  is cracked. And then next thing you know, it splits, it ruptures, it gets hot, it causes a  fire and then you have a loss. So just, you know, questions, you know, I get sometimes agents go,  you ask too many questions. But that's what we're here for. We got to ask questions so that we can  feel comfortable about it. So I would say, you know, the details, if you can get a good submission,  do a little background on it, loss runs, if it's clean, you know, and if they have loss, we said after that large loss that we would write that account. If it came in the next day,  we would write it. So we did everything right. You know, sometimes you just can't prevent  it from happening. It's the truth. And actually you so brilliantly segued into this next question.  That is, do you always get a condition report for each piece of equipment before writing it?  I do not. Basically, one of my main questions to an agent is, hey, does the insurer have a maintenance staff? And did they follow the manufacturer recommendations for maintenance?  Are they getting oil changes? Are they changing all tires? You know, if it's a big operation  and they've got $10 million worth of equipment, I'm pretty sure that they have a maintenance.  And the great thing about with Google, you can go to Google their address. And if there's a street  view, go down the street view and you can see, oh, hey, their shop looks pretty clean from this  view. Or you go to the aerial view and you can take a look at it and you can go, oh my God,  they have all this junk around and the place looks like it's going to burn down. You know,  maybe I'm going to walk away from that one. So I don't make it a condition, but I do like to  know that they're taking care of it because this equipment is their livelihood. So they better  take care of it. Yes. And so interestingly in, you know, hearkening back to claim days,  I can think of plenty of times where, and I believe that when we were in this inland marine space, we used an ISO form and there are requirements right for maintenance. So that's  sort of another layer of protection, I guess you could think of as an underwriter is like,  if push comes to shove and something isn't quite as I thought it was going to be or, you know,  whatever it is, you can always, of course, rely on, on that form to as a, as a condition,  right? Saying, well, the form here says they're supposed to be regular maintenance records. So where are those? Right. So we're actually getting a couple more rolling in. One is,  okay, here's the, here's the good one. What is your stance on inspections for contractors equipment policies? If slash when they are typically carried out, are they all conducted  on site or do you also do telephone inspections? What things are considered when determining, determining what is necessary? Excuse me. Yeah, really good question. For, for,  for my company, we don't require inspections. We do have a very capable risk management department. So if we have a really large sophisticated account, we're going to send  out and we have enough lead time. We'll send out our risk management folks. I'll go with them. If  I can, we'll go out, meet the insured, walk their property, go into their maintenance shop, take a  look at it. You know, some of these places are immaculate, you know, they're, they're beautiful.  They've got state-of-the-art equipment. They've got a staff of, you know, eight, nine, nine people.  They go to, they go to training offsite. On that large one that I mentioned earlier, that's what we did. We went and we viewed their grounds and it was, you know, it was beautiful.  So if it's a large account, we might get risk management to take a look at this, just the operation in general. But generally for my company, we're not, we're not asking for like  photos of the equipment or anything like that. Just because of the nature of the,  of the line of business, we don't have time to sit there and require all that information. You're, you're hoping really that your agent knows their account and then they can kind of  verify and, and, you know, vouch for the account that, hey, these, these folks are good.  You know, everyone's top, you know, top of class, right? Or whatever the saying is.  Of course. Yes. So you, you are doing such a good job at doing my job for me.  The next question is how often are you requesting number of hours on a piece of equipment and are  there special circumstances that trigger you to do so? I don't see it regularly in submissions,  but obviously it has a huge impact on valuation. Yeah, I, I don't ask for the number of hours.  And I only kind of came across this, that last slide that I have up here was that I did a,  we call it like a coffee table talk, like a year or so ago. And I had this mission in where, you know, I'm like, I'm like no Caterpillar bulldozer costs, you know, it was like a  million four or a million two in this situation. I'm like, that seems so high. And then I went in and  put in the, you know, the making the model and sure enough, it was a million two. So I,  that's kind of got the ball rolling. So then I started putting in other years and going to like  the equipment trader and heavy equipment trader.com and be like, wow, these prices are all over the  place based on the hours. So, but no, I don't, I don't make it a requirement that, hey, they provide  the number of hours because I'm sure most insurers probably know it. Maybe they don't want to disclose  on some of us. Right. Of course. Well, I mean, and that obviously goes, you know, further into  what would happen in a claim scenario, right. What's your, what valuation did you actually agree upon and, you know, all that. Actually, interestingly in this sort of age of AI,  right. We have a comment from someone in the audience that said that they actually asked Copilot in their browser, find the prices for used Caterpillar loader by age and hours. And  apparently it's giving a listing of various items. So if you actually, you know, obviously companies that use Microsoft, that kind of comes baked in now. So if you do have, that's,  that's actually a great recommendation, Andy. Thank you. If you do have that capability, that might be another sort of new avenue that we could use to help that.  Definitely. I think there's a meme about this. Now, you know, I'll have to go back and update  my slide and say, you know, AI Copilot or whatever brand name that is out there, because that's  actually an excellent idea. Like just, you know, we don't need real underwriters, you know, we'll  just need AI to do everything for us. Use AI to scrape the internet for the information.  That is a great, great suggestion, Andy. And I'm going to use that and say that I came up  with it next time I do a presentation. But yeah, yeah. I mean, use technology to our advantage. I  mean, you know, I, you know, I just turned 53, so I'm not the most high tech person, but you know,  I stick to Google and the, the easy things that were, you know, the thing a couple of years ago,  but now AI is, is, is here and it's going to, you know, hopefully make our jobs easier. So  yeah, that's another great, great tool to use to underwrite something.  A couple of more questions, and we're actually coming up on a break. So I want to be,  I want to be respectful, obviously, of everyone's time, but also try to get as many questions in as we can. So how about a little bit of rapid fire response for you, John?  Yep. Yep. All right. How do you handle unscheduled equipment requests? What is red? What is a red flag with those for you?  Great question. I kind of like miscellaneous tools and equipment, like a hundred thousand, maybe 200,000 max, anyone item, you know, 1,500, 2,500. When I see like  unscheduled limit a million bucks, no max item, I'm like, what's going on here? Like, are they just that lazy? They can't fill out the accord or they just don't know what they have.  I mean, you're going to run into that with like, if you do a blanket annual reporting,  they're going to send you a list at the beginning of the year and a list at the end. But if it's  miscellaneous tools and equipment, 100, 200,000 is kind of my comfort zone. Great question.  Besides carrier appetite, are there any indicators on a file that are an automatic decline for you?  Automatic decline. I mean, it used to be like, all right, losses and, you know, the new venture,  but I guess you can't have losses if you have a new venture. But it seems a couple of years ago,  new venture was an automatic decline. You know, you need to see three years loss runs in order  to verify. And then also in the same topic, if they've been in business and they have losses, it was like, oh, can't touch it, they have losses. Well, maybe they don't have losses,  can't touch it, they have losses. Well, maybe this is me. If there's a story behind the losses,  you know, like I had one where they had a big loss, but they would take aggregate from broken  up concrete projects and they would break it down, spit it back out and put it back out there.  And they were getting a lot of claims where the rebar that was in the concrete was damaging the piece of equipment. So then they bought this x-ray machine that x-rays it beforehand,  and then it goes into the machine and then problem solved. So big loss. I'm like, okay, it's not gonna happen again because they have this x-ray machine. So it's really  kind of case by case scenario. I know that's kind of a lame answer, but it's really, you know,  what's the story tell? What does the agent have to provide the details? But if they have 10 years  loss runs, they have theft losses two or three times a year. Bye-bye, you know. They're just  not doing anything to prevent it from happening. Right on. All right. I've got three more questions. Hoping we can take our break by like 1.55. Okay. I'll be fast.  You're excellent. So on batch plants, what is a typical rate? Do those usually call for a higher  rate similar to cranes? And I just want to make sure that everybody is aware per the IMUA mission  statement, we're not sharing about how we're rating, et cetera. It's more of an assessment of  the risk. Yeah. I would say a batch plant, you know, along with the higher rate, I would do,  I would be definitely north, depending on the value and where it is located,  definitely north of like 75 cents, maybe between 75 and a dollar, throw on like a 10,000,  $25,000 deductible. That's what I would do. Cause it's, you know, it's not mobile. It's stationary.  It's really more of kind of a property. I mean, yes, they break it down and they move it from  site to site, but I would throw on a higher rate and a higher deductible for that type of exposure.  All right, cool. Two left. One, what type of equipment do you find is most impact, is impacted the most by the number of hours with respect to valuation?  I would say kind of what you see in that, in that photo is, you know,  stuff around quarries, the logging equipment, stuff, right. Yeah. It's just stuff that sees  a lot, like, you know, they started off at seven o'clock in the morning and they turn it off at,  you know, four in the afternoon. And it's just used all day long, just a lot of hours, you know, stuff is going to start breaking down the, you know, the transmission, the motors,  stuff like that. So that stuff is hard, you know, stuff that sits around, like if you write  a municipality and they've got a ton of equipment, some of that stuff sits there and they don't,  they only use it at wintertime and they only use it in the spring. So it really depends on what are they doing. That's, that's kind of the key for me. You cross your fingers,  they actually turn it off. I've had claims where they thought they did, they didn't. And then the  grass got hot underneath it. Right. And then all of a sudden, you know, half a million dollars later,  everybody's wondering what happened. Yeah. The operator got out of it. It's running over to the  coffee truck and then checks his phone and gets, you know, gets sucked down into YouTube and,  you know, Instagram and forgets it's running. Right. Exactly. All right. Last question. And  then we'll go to a break. Has the supply chain improved on replacement parts slash units from  non-U.S. domiciled manufacturers? Are we similar to pre-COVID delays and have you found any  solutions to help expedite replacing the equipment when supply chain issues are slowing down at the  claim resolution process? Yeah. Great, great question. I think my untrained professional opinion, I think it's getting a little bit better. I mean, boy, around COVID, you can,  you can find anything, right? Nothing could be found, right? Whether it's builder's risk materials or this type of stuff, used car, whatever, right? Everyone's out buying,  you know, extra refrigerators and stuff like that. I think it's trending back  in a positive way, but there still seems to be a little bit of a lag, I would say, on some of  this stuff because, you know, it is a lot of the stuff is made overseas. But I think it's trending  in the right direction. I unfortunately don't get involved on the claim aspect of it. So I don't  know, like when they're, when they're adjusting, these are like, okay, you know, you got to wait six months for the piece of equipment. Sometimes, yeah, there might be a huge  waiting time because of the sophistication of the equipment as well. So if it's a standard part,  yeah, it should be easy. But if it's something that's made in Germany, and it's got to be shipped over and, you know, you're, you know, there's a lot of moving parts there.  Definitely. And I would add that with, you know, especially your Liebherr, your link belts,  particularly with cranes, they don't even stock parts the way, for example, Caterpillar would, because their equipment is so much more specialized. I've actually dealt with  delays, because they had to get the casting mold and actually recast the part. So I would just  offer from a, you know, pivoting from a claims perspective into an underwriter perspective,  really think hard about how much you're willing to put up as a sublimit for rental reimbursement.  And if there is an opportunity to cap perhaps a time or a, you know, I don't know, a monthly limit  or something, those are levers that are available to us, right, as underwriters within the form that we can hit. So we are exactly at 155. John, thanks so much. And to the audience,  thank you so much for your engagement on this one. This was great. Let's take about a five  minute break. Let's say we'll kick back off with Dan talking about the claims aspect at 201. All  right. Sounds good. And if there's any questions at the end of presentations, we can address those  as well. But thanks everyone for the time. And again, great questions. All right. We'll see  everybody back here in six minutes. All right, everyone coming up on 201. Welcome back. Hope you  took advantage of your break. We're going to dive right into part two claims brought to us by Dan  Fromm with Liberty. And I think we are going to start this section off with a poll as well.  I'm going to go ahead and launch this one. All right, folks, let's see. What does fraud include?  Wow, the numbers are moving and grooving. This is excellent and exciting. All right, give everybody, it's like leveling off, give us about five seconds and then I'll close it  and share the responses.  All right, closing the poll and let's share our results.  All right, we've got more than half theft and an intentional act, shortly behind fire and vandalism.  Dan, what do you say? Well, it's a trick question because it's all of the above, but no, I'm glad we jumped on the intentional act.  Excellent, all right, turning it over to you to drive the bus. Okay, I see we can go back a slide here to the first one.  If not, Gab, I may have to have you push me back one. I will happily support in whatever capacity needed. Yeah, let's go back to one screen, I think, before.  Okay, hey everyone, my name is Daniel Fromm. I'm a Senior Special Investigator with Liberty Mutual. I've been for just over six years now and looking at the attendees,  I see plenty of familiar names. Some folks from my company, which are great to see and they'll tell you it's probably a good thing my webcam won't work today  so you don't have to look at my face and suffer with the face of an SIU investigator. So I am based in Tampa, Florida, but I investigate claims in all 50 states for Liberty.  I handle both personal and commercial lines for Liberty and Liberty and their member companies, including Safeco. I've spent almost 20 years strictly in SIU.  I formally completed SIU vendor operations for USAA for three years, completing their vendor ops both domestically and internationally.  And prior to that, I was with AIG for 10 years handling commercial claims, workers comp, personal lines, a little bit of everything for AIG when they were that big company  they were several years ago.  I often tell everyone in my career, I have investigated everything or been involved in the investigation of everything from a $1.9 billion construction loss to $1.99 value meal.  And that's not an exaggeration, but my job and my involvement is primarily focused around fraud. And it's really key that we have an understanding of insurance fraud and what it is.  And here's the easy answer. It's a material false statement made to woefully with the intent to receive for financial gain. Obviously the underlined points are key here,  material false statement, intent and financial gain. And we'll get into those later, but you'll probably see based on venue and state location case law,  some of them will include intent. Some of them will include false statement and how they can be impacted in that manner.  So there was our poll.  So it's interesting when you look at the stats. Now these are from a combination of different entities. Mostly it's the coalition against insurance fraud  that pulls in all this data. And they estimate that 10% of insurance claims have fraud in them. I'm sure if we ask people on the phone and some of our attendees,  they're all probably shaking their head saying it's significantly higher. And you would find myself agreeing with you. You can see the costs here. This was in 2022.  So still in COVID, $308 billion. Their recent estimate, they're crunching the numbers. They think it's over 400 billion. With inflation, it might be 500 billion.  So almost a half trillion dollar a year problem. You can see the property and casualty numbers. And 16% of US citizens said, yeah, it's okay to defraud an insurance company.  I don't have a problem with that. You can see the costs that comes to each family. $970 in increased premiums per year. So almost $1,000 that comes out of  everyone on this call's pocket.  35% of consumers say it's okay to exaggerate or inflate an insurance claim. And most consumers believe that they've got a 50-50 chance of getting away with insurance fraud.  So when we look at these numbers, you can see why thankfully I have a job, but thankfully why it makes your job as underwriters or claims professionals so much harder  and it hurts the industry trying to calculate this because there's such a great opportunity to make money. There's so much money present in the industry as a whole and wide.  So what is SIU or Special Investigator? And I thank Eileen so much for the picture. I am not the person who hides in the camera with the woods, in the woods, taking photo.  I don't hide in bushes. I don't sit in a car. That is surveillance. So this is from the International Association of Special Investigation Units, which I am a member of.  This is their definition and I won't read it to you, but you can see many insurance companies have to have an SIU on staff or have some form of an SIU.  And when I first got into SIU quite as many years ago, if you've done the math on how long I've been doing this, most of my colleagues were from law enforcement,  military intelligence, things of that nature. But now, I think John had mentioned it in his presentation, with the growth of AI and technology,  we're really seeing a shift on the type of people we're hiring so they can understand how fraud is being conducted in that environment. We'll touch on some AI fraud later.  You can see there's really two general types of SIU, property casualty, which is what we fall under on this call, and then life and health.  And there is significant fraud in health insurance and life insurance. It's actually the two biggest contributors that what I think is almost a $450 billion problem, excuse me.  But again, Eileen, I love the picture, I'm not the guy in the woods. Our next slide. So here's how we work right now with our claim partners. I'm very blessed at Liberty  to have some great claim partners who I work with. Some of them handle specifically heavy equipment, some handle inland marine, some handle builder's risks,  so all different walks here.  And they kind of discover concerns that may come up, they refer it through our protocols to SIU, and then we work together as a group. And this is pretty common  across most of your other major insurance carriers. They'll have some form of a process that the frontline claim service or the adjusters  or claim specialists will refer a claim over to SIU for additional investigation, and then the claim moves forward. Where we see the future going is with AI  and modeling, that may not even be the case anymore. A claim will come in, it will hit certain red flags or measurables, and it will go straight to SIU  before it even touches the adjusters desk or the claim specialist desk.  Right now, I would say most of your major carriers have a combination of both of these, depending on their cost and outlay, because the AI, as you can imagine, is not cheap.  So that's where we kind of see things going eventually.  So when we talk about the fraud indicators, remember, these were the four things we touched on at the start, the financial gain intent, false statement, and materiality.  So I'll start with the financial gain. Obviously, from a fraud perspective, unless there's a financial gain, there's not fraud. So this probably doesn't come into play  with the type of claims that we're talking about here with the heavy equipment, but it comes into play maybe on some of your smaller in-the-marine tool claims.  If it's not above the deductible,  they're not making a profit. An insured has a $5,000 deductible and they're claiming $2,000 in tools. Well, they're not making a gain because they're gonna lose on the deductible.  Even though it may be blatantly obvious they're committing fraud, SIU wouldn't get involved because ultimately there's no financial gain to prove the fraud element.  The false statement, this is always a struggle as well, is lying fraud. And this is where I think we struggle a lot from a claims perspective of separating a lie  to the material portion, which moves us into the other bottom part of that circle, is does the lie matter of the claim?  And an example of that may be, you might have an insured that says, well, I was out working on this job site and my skid steer was stolen and it was a Tuesday.  We find out later it was actually stolen on a Wednesday. Is that material? Maybe, maybe not, depending on the timeline of the theft.  If it's a job site that they weren't on for a week, does it matter if it was stolen on Tuesday or Wednesday? I would probably say that's not material.  What would be material is obviously if they said it was stolen and we know it's not. Well, there's some claim story later I'll share with you similar to this. And again, intent.  Now this is the big challenge. Some states have case law that says you have to have intent for fraud. Some insurance policies have very clear language  that say there has to be intent. So this continues to vary. Now, how do you prove intent? That is the hardest part of my job. So we have to prove that they wanted a financial gain,  there was a false statement, it was material to the claim, and then we have to prove they intended to do it. So it is very, very challenging  to get all four of those into that circle to prove that fraud. And sometimes they work with each other and sometimes they work against one another.  So I know there are times when a claim ends up with SIU and we think we've got a great claim and we get three of the four and it's really hard to get the fourth part  of that circle together. I can tell you I've been doing this quite a while and we get lucky quite often. Sometimes we're more lucky than skillful and get all four.  So we talked about AI earlier and I'm gonna spend a little bit of time talking about AI now. So for the good guys, that's us, folks on the call, we're using that predictive modeling  and that's not just claims. I think there are underwriters, there are risk advisors that are starting to use the predictive modeling to begin to identify  the fraud trends, the concerns, the issues, using interactive technology to verify identities of parties. Identity theft is very, very prevalent,  happens a lot. I'll share a bad guy story on that. That's actually not up here. And partnering with onsite data, quick response robotics.  So again, I know John had mentioned his presentation about drones, but we're starting to see drones responding to some of our catastrophic losses, fires, floods,  especially the cat losses, a lot of claims in SIU where someone says, oh yeah, my car was flooded. It got destroyed in the recent hurricane.  And you say, well, we flew our drone over that location or we used geospatial satellites that we were granted from NOAA and your car is not parked at your house, where's your car?  If it's flooded, it's not there. And it's photos of another car that's flooded. So we are using AI. I hate to admit it to this group, but the bad guys are ahead of us on AI  and we're catching up. And I think that would probably be fair for all of us to say that the bad guys are ahead of us on AI. So what they're doing with AI, dark web,  things of that nature, they're setting up fake policies, filing false claims.  You'll see them, for an example, to go into some of the heavy machinery, they'll set up a false business, set up a false identity, buy a piece of heavy machinery with a fake check  from a fake bank account, take out a policy. The piece of machinery catches fire, it's stolen very quickly. They file a claim, the insurance company thinks it's legitimate.  They get paid, they cash the check. And then everything, when we start to run everything down, it's all false.  An example of how good AI is now, this was at a major insurance carrier and a claim specialist adjuster was out on an extended leave and their voicemail was pretty lengthy.  They said, you know, I'm gonna be out for this time, I'll be gone, this is my backup, please call this person. Someone using AI called in, recorded that person's voice,  the claim specialist adjuster's voice, then called their backup, cloning the voice and saying, hey, I forgot to tell you, I'm out on leave, but I meant to cut a check for that claim  for the $250,000 policy limits. Can you just cut the check today? I need to get that out because I'm gonna get in trouble when I get back from vacation if it's not issued.  The backup, hearing the voice, thinking it was their teammate, their colleague, issued the check. And when the claim specialist came back from vacation,  they looked in their file and said, why was this check issued? And that's how good AI is, it's pretty scary. There's a link, if you'd like to click on it at your time,  it's a video, it may open for us or may not, Gab, can you see if it opens?  That's open and I can't see it, let's see if it does. If not, I can just talk us through it. Yeah, I need to click, so. It's okay, I can talk us through it.  The presentation will be pushed out, I definitely recommend keep it, because our other two presenters have some great stuff in here. So this is an app called Dude Your Car.  It was created a few years ago by a gentleman who thought this was a good idea to prank people. And it's an app, if anyone has children on this call,  grab their phone and look for it, because they're doing stuff they shouldn't be doing. It's an app that you can easily download, it's free, you get it on the App Store or whatever,  if you have a Galaxy, easy to get it that way. You can take a photo of a car, you can show that it's dented or damaged and it looks legitimate,  you can make your vehicles look like they're on fire. And in his video, he puts a actual boot on a police car as it's like parked illegally and shows it to the police  and the police walk out and of course the boot's not there. So the point with that is this app's been out for a couple of years, and if it's that easy to take a photo  and create fake damage, can you imagine what you would have on some of our heavy equipment and heavy machinery and the better photo editing features we have now with AI, chat GPT,  hey, take this photo and make it look like it's more on fire. We recently did a seminar where we were learning how chat GPT can alter images and there was a gentleman presenting  and he got up chat GPT, he uploaded the image that he was using, the images of our presenters, and said, make me a female, make me blonde,  make me six feet, make me look like a supermodel, slim my nose. And they did all of those things within about a second. So can you imagine someone being able to get that photo  and then say, I've got this front end loader, please add some fire to the back of it, make it look like it's burned, let's send it to the insurance company  and try to get them to pay. So AI is really, it's great for a lot of things, but from a claims investigation and fraud standpoint, it is causing massive headaches.  All right. Oh. Dan, just to interject really quickly, one of our participants advised that just clicking the link within the presentation probably won't work.  So as you mentioned, once we, excuse me, push out the presentation, everyone can either copy it or whatever to take a look, all right?  Thank you for bringing that up. So let's try to move on to the next one. And Gab, I may be frozen from trying to click on the link, so I might have to rely on you.  Okay. Let's see here.  Thank you. All right, we're in. No problem. Thank you. Hopefully it will come back to me here in a second. I'll be able to click again. So our trends with heavy equipment.  You know, we're seeing obviously a lot of removal of the GPS tracking devices at the time of the theft or immediately thereafter. I know a lot of our heavy equipment,  especially a lot of the Caterpillar equipment is GPS enabled. The folks stealing this are very, very good and very clever and know what they're doing.  So they will often disable it or remove it at the time of the theft, or they will move the piece of machinery on a trailer to another location,  take it off, attach it to another empty trailer sitting in this lot and drive away. And as we ping it, we think, oh, it's just been moved down the road. Well, no, it's not.  It's the GPS.  A big trend we see is the prior and preexisting damage being claimed as new or using the prior damage to create a total loss for equipment on a new policy.  Very common now, I would say my number one driver for the third point is skid steers being sold on Facebook Marketplace.  You know, they will be stolen from one state, driven across state lines into another, posted on a Facebook Marketplace. And, you know, we know with the economy,  it's very expensive to buy equipment. And if you're a contractor and you see someone willing to sell you a skid steer for 20% of the value and cash, no questions asked,  they're often selling that way. If we have folks in states that are close together, I think of the Northeast, where you could hit a nine iron and maybe hit four states.  That's a good example. They will drive across state lines. It'll, you know, the GPS on your Facebook puts you in a different area  from Facebook Marketplace searches and easy to find it. And this kind of goes into the next point of the black market resale. There are a lot of sites  that people are going to legitimately where they know things are being stolen and resold. And there's no questions asked. It's all cash, all easily created.  This next one does happen more than we think. You know, competitor-involved theft  to create negative impacts on our insureds or fires. And quite often, again, in this market, job bids are very valuable. There's not many of them around.  And our insured may seem guilty of a fire.  But, you know, that's why we want to use our experts, our origin and cause experts, and go out and do some analysis and investigating. And, you know, even, you know,  our job is to make sure we pay on claims we should pay on, you know, pay our insured, and then, you know, pursue against that third party.  I would say most of your high-end heavy equipment, in my experience, this isn't a generalized blanket statement, is through organized crime.  And the reason I say that is you have to think, if you're gonna steal a, as John was showing us earlier, the value of some of the equipment,  if you're gonna steal a $1.2 million piece of equipment, you can't park that in your driveway and put a tarp over it. You're gonna have to move it somewhere secure  to hide it for a little while. You're gonna have to find someone to bid on it and buy it. And quite often, what we find is that the multiple parts of the organized crime  is someone stealing it, someone else is storing it, someone is moving it to another location, someone is conducting the transaction to sell a piece of machinery to someone else,  and then that money is all being laundered back through businesses owned by the organized crime, usually cash businesses, where they can launder the money back through that way.  So it's quite common. We see this a great deal in cargo theft, but we're seeing a lot of heavy equipment, excavators just moving very quickly. And this isn't a,  without being rude to some of our more simple criminals, this isn't smashing in a car window and grabbing a computer. This is moving a big piece of equipment  and you have to have the ability to do that and stay off the radar. And then, the items being resold at both legitimate and illegitimate equipment auctions.  Again, in Florida, I can probably drive 30 miles and there's some large heavy equipment auctioneer. Some of them seem to be organized and legitimate.  And some of them seem to be a person with, 10, 20 pieces of equipment in a field with a for sale sign stuck in the ground. And do we know if they are legitimate or illegitimate?  And we all know the challenges in tracking some of this equipment. Some of it does have identification numbers on it, quite often it doesn't. So a lot of this is being resold  and sometimes people are buying it from what they think is a legitimate source and not knowing the property is stolen or the equipment is stolen.  Gab, my, there it is. We moved on to the next one. As we mentioned earlier, these links aren't gonna click for you now, which is fine. But when you get the presentation,  these are examples of this. People are stealing items. The last one is actually up in Canada. It's about stolen farm equipment that were recently resold.  But these are news alerts that were pretty recent of heavy equipment being sold, resold by companies. Most of it knowingly was stolen.  And again, you don't wanna hurt people's feelings but some people are in a tough financial bind in this economy and they'll go to these auctioneers  or these companies that are selling their stolen equipment because it's a great deal. To John's point, you can get a front end loader  with hardly any hours on it for 20% of the cost. I don't agree with it but I can see why people would purchase that. So just a few news articles that may come into play.  I believe the middle one is in Virginia. So if we have any folks from Virginia that would like to look at that article, that's pretty interesting.  Again, the bottom one's from Canada and the top one is just a Better Business Bureau, kind of a nationwide company that was moving,  starting auction businesses or taking over car lots and selling heavy equipment and commercial equipment that was all stolen.  So some red flags and what I would be concerned about from a claims perspective. And again, I'm very lucky with my folks at Liberty. They often send these as their red flags  but loss on a policy that's less than a month old, that's pretty quick to have a loss that way. And again, we're dealing with heavy equipment.  It's gonna get damaged, we understand that. No specific details. We often call up the insureds and, well, I don't remember where I parked that back loader.  I'm not sure where it was last. Yeah, I don't know who last operated. No prior business insurance. Why would our insured suddenly start business insurance in this manner?  Prior loss claims history and ISO policy doesn't align with the business. We run into this quite often where someone is,  said they are a gardener and they're doing heavy excavation equipment because it saves them on the underwriting perspective. I know we've got a lot of underwriters here  who probably feel that pain and they're doing full excavation.  We had talked about some of the tools. I know this is more heavy equipment driven, but excessive tools.  Do they have the documentation to support the purchases? Even the purchase of the heavy machinery, do they have anything to back it up? When was it last serviced?  Where was it serviced? And then of course, always a red flag is the delay in reporting. I often assume that most job sites are active  and even though that people might be off for a day or two, to wait weeks, sometimes months to report a claim and not have a police report, to me, that would be a red flag.  So again, I have the easy job of when the claim comes to me and it's a mess. And I know we have some underwriters who start at the front end, which is the real challenge.  And these are some of the pitfalls I see from my end. So please understand, I know your job is extremely hard,  but what we talk about sometimes is by the time we get the file is these are some of the pitfalls we see when the policy was first underwritten  or the agent was first involved as well is the speed. I know in today's climate, it's all about customer service, how quickly can we turn things around?  We all live in the world now of let's get it done faster. I can go on my phone. I want a policy. Why is this taking two minutes? I need it now, now, now, now, now.  So I know different companies have different guidelines.  We've talked with underwriters before and have said, well, once I get a call, I'm on the clock to either write or not write, and I have to make a decision.  And ultimately, from my SIU perspective, sometimes is meeting that goal worth the risk? And I would say, as you're going through that process  as an underwriter, if things start to pop up, we always say, right, there's no better feeling than your gut. Doesn't feel that good. You know, that's a problem.  You know, are we accurately describing the risk? You know, are we mislabeling the equipment? We run into this a lot in SIU. You know, we're putting things on the policy.  It's listed as a simple skid steer, and we're getting out, and it's a half million dollar road grader.  Why was it listed that way? Is the correct policy being applied? We talked about this earlier. This came into play on an Inland Marine claim I'm familiar with where the insured said  they were a pressure washing company, and they had almost $100,000 in different tools, and none of them were related to pressure washing. And I thought, at what point  were we not classified correctly? And, you know, this goes into that third point. Are they being coded, classified correctly for what they're completing?  The loss history, the loss runs, I know we see those sometimes on the front end. You know, do we have those repeated offenders?  Do we have any knowledge if they were in SIU previously? And again, sometimes we can use, you know, our intelligence, our computers to our advantage.  Google Maps, can we peek at sites? Again, I know this is challenging if we're looking at equipment, but maybe if the insured says, oh, hey, I'm doing the job at 123 Main Street,  and we bring up 123 Main Street, and it's not a job site, or, you know, are there public and state databases we can search to verify, is our insured a legitimate business?  Most states have a, you know, a business entity search you can go through. And I'm sure there is the big challenge.  I've talked to our underwriters about this before of, you know, wanting to keep a happy customer, wanting to keep a happy agency, happy broker,  and, you know, quite often we said, well, we kind of had that feeling we shouldn't have written this risk, but, you know, we did it just because we wanted to keep someone happy.  And I often say, I get it, I understand it, but now we're writing a check for hundreds of thousands or millions, and if we had that feeling,  could we have pumped the brakes and avoided that? So again, very easy for me to say this. I'm Monday morning quarterbacking, so I'm not taking a shot at any of our underwriters.  I know your job is very hard, but this is, again, just from my perspective downstream, when we look back of how the policy originated and was underwritten, you know,  did we miss some opportunities at that time to maybe catch some concerns or maybe some things that may have popped up, some of the red flags we talked about a slide ago.  So I'm gonna move into some war stories now, but before I do, I just wanted to stop and see, you know, Gab, if you had any questions or if anyone had a couple of quick questions  before we move into the war stories.  Yep, so we have a couple. I wanna be mindful of time and say that I think we're targeting a break at like 2.57-ish. So let's, I think, you know,  the questions that we actually have in, I think would, you know, fit here now, so we can do that. Let me just grab them.  There is a question about whether intent is determined by a jury. So I think this is going back to sort of our initial discussion about the elements of fraud, right? Yeah.  Yeah, and quite often that is gonna be in the state guidelines, so more likely would not reach a jury. It would probably be decided long before  and, you know, I'm sure it would be something that would come up. For example, if a claim was denied for fraud with intent and there was a suit filed against it,  the plaintiff would probably file a motion for summary judgment saying they correctly, incorrectly denied this for intent. You can clearly see, you know,  in their policy language or state value, intent is not a measurable means of fraud in this venue or this state. So to kind of answer the question,  but not answer it, I don't think it would get to a jury. I think it would be a non-factor in that case. Good one. I would tend to agree with you.  Yeah, and I would tend to agree with you that there's almost the universe in which any type of insurance dispute actually gets to a jury, let's call it in property, right?  I'm sure casualty is different,  but in property, there are a lot of steps and a lot of opportunities to settle and to resolve outside of that process.  So there is, you know, it's good to ask, but definitely it's a far off, like you're saying, sort of a far off probability, right?  The next question is whether you have any experience with Verisk National Equipment Registry, and if so, have you had any success from their service? Yeah, they are outstanding.  Great group of people use those quite often. It's more with the intelligence, discovering trends, and then partnering with Verisk and our other entities,  the National Insurance Crime Bureau, to spread the intelligence. Usually we're noticing the same equipment being stolen or removed in the same way, partnering with them.  It's a great, great resource through Verisk. And yeah, I've used them quite often, and we've been able to identify, you know, eventually criminals are easy to catch,  but they're kind of crafty at first, and they may start in Florida, then move up to New York, and then go to Ohio, and then California. And as you can imagine,  my scope is limited on how far I can track them, but NER has been great on that, and they've been fantastic to work with. So thank you for whoever called that out. Great company.  Excellent, and as I see, you have one of my dream cars stuck in the mud over there, a Toyota Land Cruiser. Oh.  So I'll leave it to you to carry this one on. Yeah, and everyone, you'll have to forgive me. I'm a sucker for a dad joke, so I, you know, stuck in the muddle with you.  You'll have to, every one of my war stories has a dad joke kind of tied into it. So our insured reported their excavator was stuck in the mud. This is an excavator,  but I like the Toyota being stuck in the mud to mess with Gab. And they said a weather event came through the area, causing it to sink, and our excavator now is completely destroyed  because water and mud has come up above the tracks into the machine, and shorted out all the mechanical and operational components.  And one of those first red flags that popped up, right?  The policy was accepted six days prior to the loss. The insured was alone in a remote area. Again, if we think back to those red flags a few slides ago,  and no other witnesses to this, which again, if you're working on an excavator, you might be by yourself, you might be land clearing an area where there's no one else around.  It's not suspicious, but it's hard to verify when the loss happened. And we looked at weather reports and weather analysis, and we found that, yes,  there was a significant weather event. However, it was like a two week, really torrential amount of rain that happened in the area. The other big thing that stuck out  to the claim specialist or adjuster was that the damage for the estimate was provided two weeks later, past the date of the loss. Just a little odd,  and again, I know that sometimes it's hard to find specialists to look at your vehicle, but why wasn't the vehicle taken out to be seen a lot earlier?  Kind of some strange components to this one. So the claim was referred over to SIU for additional investigation. We got the statement from the insured who said,  I can't remember when the loss happened. Couldn't really validate what was being done. We asked these questions, try to really get into the who, when, how, what, why, right?  The devil is always in the details, which is one of Sherlock Holmes' favorite statements. And, okay, so you're not out there with anyone. You don't have any other employees on site.  So who were you working for?  Who paid you to do this? What kind of job were you doing?  And there was always, I don't know. It's very, very evasive. And we eventually drilled down and the insured said, well, I was being paid in cash. You know, my client's out of town.  I don't really want you to bother them. I don't know when they're gonna be back. I don't feel comfortable giving them the phone number. I don't really wanna drag them into this,  which for me, again, is we're trying to verify your loss. You have a significant piece of machinery that you're claiming is completely a total loss. We would like to verify this.  The insured then said,  well, I do remember I called my buddy up. He had a bigger excavator and he helped drag out my excavator. And then I tried to work on it and repair it myself  and clear out some of the mud and I couldn't fix it. And then we towed it to the repair shop about a week later.  And then we got the estimate.  So we had these factors. And again, you can imagine the challenge is there's no one to verify any of these details.  So clear as mud, right? So we asked the insured to say, we'd like your cell phone records to show when you called your friend. And he said, well, I've got one of these  non-standard cell carriers. I can't get cell phone records. We called the company up and they said, well, we're not gonna give you anything without a subpoena.  So then we called the repair shop to verify the timeline it was dropped off. And the repair shop said, wait a minute, I know the friend he was with.  He was with him when he dropped it off.  And SIU said, well, do you happen to have this person's name or contact information? And they said, yeah, he has a heavy machinery. I can give it to you.  So we called the friend up, talked to them. They verified what happened. And also, and I said, I said, SIU said, how do you know so much about this?  And he said, well, I went out there, I pulled it out and I took some photos. And we said, oh, do you still have the photos  from the day you were out there that you were taking photos? He said, yeah, he sent the photos over and we were able to pull out metadata from those photos.  Now, this used to be a goldmine years ago, metadata. Now, unfortunately, because of AI and the internet, bad people know what metadata is. And for the purposes of the call,  what metadata is, I'm sure most people know, but it is encrypted information on every picture you take. It will give you the coordinates,  the longitude and latitude of when the photo was taken, what device took it, what camera took it, the front camera, back camera, et cetera, what model of camera it took.  And thankfully, this person had not altered the metadata, which you can now do on an Apple device. Thank you, Apple.  And we noted that they were all done, this was all done prior to the policy inception, all of these photos of our excavator being stuck in the mud.  So SIU presented these findings to claims, the insured's claim was denied and appropriate referrals were made to the state agencies  and the National Insurance Crime Bureau for the lossiness. Because in this matter, again, we had obviously the financial gain, the intent,  because we knew we could prove with the photos that the insured was aware that it didn't happen on this date and the financial gain and the other factors.  So that was that claim, again, came from our claim specialists really finding a very good claim that met those red flags.  All right, our next claim involves a skid steer. And again, forgive me for my dad joke, steering away from the truth. So I know we're all familiar with skid steers.  They, again, strictly my opinion, but in my experience, the most commonly stolen piece of heavy equipment out there, very easy to sell. When I talked about those black market,  sales or side of the road auctions, it's the most common item that we see and very hard to track down, very easy to transport a skid steer, but not so easy to,  John showed us a photo of some of those huge pieces of machinery, not fun to transport a skid steer. If you have a truck and a trailer,  a decent enough trailer and a truck with a big enough motor, you probably can pull a skid steer.  So the claim was reported about a week later, no witnesses, the insured said, ah, you know, we're at a job site, came back out, my skid steer was missing.  Didn't file a police report, which sometimes is a concern, sometimes it isn't. And again, some policies will require insureds to file them, some won't.  And the insured was towards the end of the job that they were working on. Again, couldn't give us any of the details from anyone else working on the site,  any employees, any other contractors, any other companies, couldn't give us any details of who the GC for the site was. And we looked more into the insured  and discovered in the insured's background,  that there were two prior similar claims of thefts involving heavy equipment or machinery.  So again, the claim was referred to SIU for additional investigations as we move around the facts here. The background was done on the insured, which revealed they were involved  in those two prior losses.  What we discovered was those two prior losses were with different companies. So he might have been, I'm not sure it was a he in this case,  it might've been like John Smith Construction, where previously it might've been J. Smith LLC.  Or John Smith Heavy Equipment, LTD or Inc.  People have a habit of changing their company names after a loss to stay off loss reports and run reports.  So the statement of the insured was obtained, there was no new information being presented. And during the statement, the insured was asked,  have you ever had a prior theft of a skid steer or any heavy equipment?  And the insured said, no. He said, have you ever been involved in filing a claim with a piece of heavy equipment stolen or a skid steer? No, there was nine or 10 different ways  this question was asked. The answer was always no.  So there is a relationship between insurance carriers, especially with SIU, where we can contact each other to discuss other claims, as long as it's within an immunity statute  that if the claim does turn out poorly, the insured, if they do file litigation, can't go against the other carrier that we got the information for.  And we discovered that these prior losses was our insured, and it was the insured's brother. So background was done on the insured brother and discovered that they owned a business  across the other side of the country. So our loss was on the East Coast and the brother was operating a business on the West Coast. So we are fortunate at times that we can use,  oops, I'm sorry, jumped there, gab, my fault. We, skidding into family trouble again, my terrible joke. So we had someone conduct a site inspection  of the insured brother, where the business was, and lo and behold, there's our skid steer on the property. It was very identifiable, had the same,  they actually had three or four stickers that our insured had put on there, personal stickers that matched exactly that. So we asked our partners that went out there  to go on site on the West Coast. We said, can you interview the brother? And he said, yeah, my brother owns his skid steer over on the East Coast. He said his job was wrapping up.  He said he was gonna let me borrow it because he didn't have anything to do. And I got a trailer, I drove across country to where the state was, it was actually North Carolina.  And this, I think it was North Carolina to Nevada. So I drove to North Carolina, I picked it up, came back, and yeah, I don't know anything about this being stolen. Nobody told me.  So immediately after that on-site investigation was done, contacted the insured, and lo and behold, our insured forgot that he loaned the skid steer out.  After repeatedly in his statement saying he doesn't know where it is, doesn't know who would take it, denied anyone borrowing it,  and again, presented those findings to our claim partners, claim was denied, and those appropriate referrals to the North Carolina Department of Insurance,  Nevada Department of Insurance, and National Insurance Crime Bureau were made in this matter.  And our last one, last case story here, this was my first claim I knew of with a mulch blowing truck.  I didn't realize how valuable they are. I'm sure John or Josh may know about them, but I hadn't heard a lot about this before, but policy was enforced  for at least three years at the time. So the insured purchased a brand new mulch blowing truck, and it was very heavily modified, and it was insured for about $500,000,  which was the actual cost of it. And the insured had an offsite fenced-in large dirt lot where they kept a lot of their equipment. They were a landscaping company,  and they showed up one day, they had two mulch trucks. This was a brand new one. That older one wasn't as nice, and the gate wasn't broken. No signs of forced entry.  Had no idea how the truck was stolen. They were in possession of both sets of the keys. They called the police. The police came out, and in their report,  they noted no signs of drag marks, no signs of the vehicle being moved.  They checked with a couple of businesses along the road turning into this lot, and nobody saw anything. No one saw the truck move. So again, it was an odd claim to come in.  So we're gonna ground down to the facts. I'm sorry, I couldn't think of a joke with mulch. So the claim was referred out to SIU. It was a pretty significant loss,  no signs of forced entry. We discussed the police.  They said, look, this is odd. There doesn't seem to be any evidence that the truck was driven out of the lot. We believe that we've interviewed several people with your insured,  and we believe it was parked there on the night. We don't have any reason not to believe it. We talked to the insured, and their timeline and their employees' timeline  matched what they told the police. We looked into the background of insured, no current financial stressors, nothing to worry about. Their ISO history was very clean.  They didn't even have a personal stolen loss, no burglary theft. Contacted the finance company, and they said, no, no issues with the insured. Payments were great.  They were on time. It was a new vehicle, but we ran their credit. Their credit was great.  And in talking to the insured, we learned that they'd recently purchased this because they had won several contracts in a bidding process for HOA communities  and golf courses to spray this mulch. And our insured had told us, well, I wanted this nice truck. The insured had said, I wanted this nice truck. It looks great.  I had those modifications because I'm going into these higher-end golf courses and communities, and the truck looks nice. It's got chrome and diamond plate on it,  and it looks great. We spray the mulch, and everyone loves us, and we keep winning these contracts because we do great work, and our truck looks nice, and everyone's happy.  And we asked the insured. We said, well, could you give us these contracts that you bid on? We'd like to look at them to verify what you're telling us  because, again, the motto most of us have in SIU is trust, but verify. We trust what you're telling us, but let's verify what you're telling us.  So where's the truth hiding? So we contacted the respective clients and said, did our insured bid? And they said, yeah, made the bid. We liked their bid. We went with this.  And some of the bid sheets we noticed over time, and there were several of these contracts, that nearly on every single bid, there was a competitor on the bids that our insured won.  So we started to look at this same competitor and noticed that they had prior criminal history, financial concerns, and then went back out and did a canvas.  Now, we didn't just canvas the road in front of this dirt lot. There were some homes behind the dirt lot. So we canvassed along that area and thankfully found a neighbor who said,  it was the weirdest thing that at three o'clock the other, a couple of weeks ago when this theft happened, I saw this large flatbed truck with a crane on it  driving down my street and they turned up a dirt road, which leads to the back of this lot near where the mulch truck was parked. And what we discovered was the competitor  drove this heavy crane back through this wooded area, unloaded the crane, used the crane to lift the mulch blowing truck, the brand new one  from his competitor, the insureds over the fence, loaded it onto the trailer, drove it away, came back, picked up the crane. Of course, this is making some noise,  but only bothering the residents in this immediate area  and took it away. So we called the police and said, hey, we may have a lead for you.  We've got a statement from this neighbor. What do you think? And they said, well, we're gonna go to the competitor's, he had a dirt lot as well.  We're gonna go to the dirt lot and see what they have. We're gonna show up and get a search warrant, get probable cause to enter, which they did.  And I had the search warrant as well. And lo and behold, in the back corner of the competitor's lot, there was a tarp  that was partially covering our insured's mulch blower. So I guess the key to this is, is that even though something may seem clear,  and I get the facts of this loss and I'm thinking, this insured, there's no way.  This clearly didn't just drive off by himself. This isn't Optimus Prime, this isn't Transformers. This never happened. This is definitely our insured not coming up,  but that's where the trust but verify comes into play. And yeah, we got the truck back, no damage to it. There were a few scratches from where the competitor  didn't really carefully chain, cover the chains to lift the truck out, this heavy truck. Our insured was fine with that, didn't really mind that there were scratches on it.  And we ended up having to cooperate and turn over our investigation with local law enforcement for the prosecution of the competitor for grand theft.  And we, I think he ended up filing a vandalism claim against him for the damage to the truck and repairing it. So it's not always the, I know the first two stories,  I don't like everyone to think SIU just chases bad insureds. There's plenty of good insureds out there. And quite often my goal is as long as we're paying  the correct party and the correct amount, I'm happy with the investigation.  That kind of wraps up my portion of it. I hope I've given you a kind of a walk through a day in the life of SIU. If there's any other questions,  I just wanted to pause before the war stories. If you have any questions, I'm happy to answer them.  Thanks so much, Dan. We actually have a question regarding the stuck in the mud war story that we had. It is if the excavator was stuck in the mud  and the insured was revving the engine to get it unstuck, ultimately resulting in the engine of the excavator over revving and blowing up, would that be considered a covered loss  or would you debate it that it was an initial or even equipment breakdown?  I would say if the insured revved the engine, blew it out and still stayed to the same facts of loss and said, oh, this loss. Again, the key for us is that the loss never happened.  The loss didn't happen before the policy. So even if they would have revved the engine and blown it, our argument would have been, well, even if the engine overloaded and blew  and there's no coverage for you because your policy wasn't incepted at the time. What we discovered was through the metadata, the loss happened and then we were able  to find the sales call much later through contacting the agent and underwriting that in fact the loss happened. The insured called in, I think the next day  or two days later to add, to start the policy. Never had business insurance before too. That was another red flag. So we would have denied it regardless  because there was no coverage at the time of the loss. So it would have been the same denial. It would have been a denial for fraud, for material misrepresentation of facts  in that he claimed the loss happened prior to the policy inception, but it didn't happen. Excellent. Thank you. And we have gotten some compliments rolling through. So thank you.  Everyone has been wonderfully engaged so far. So much appreciated. Catherine said she loves the Optimist Prime comment.  All right, everyone, we're coming up just straight on three o'clock.  So thanks to everyone for hanging in. We are going to kick off part three with Josh from the risk management perspective.  My friend, the floor is yours.  Thank you very much. I appreciate the opportunity. Good afternoon to everyone. My name's Josh Schaumburger. I'm a senior director of risk management with Clark Construction.  And I'm here to kind of give you a little bit of a perspective from my seat, which is as a risk manager for a large construction company.  And I thought, well, so back to our agenda here, just kind of give you a sense for what I'll kind of touch on today.  You know, just our company in general, my role supporting the organization, some claims experience that we've had in the equipment space, touch on use of technology.  And then also I thought it would be helpful to kind of give a specific example of how we kind of approach joint ventures, which is a thing that we find ourselves dealing with  in our world.  So moving into just kind of an overview of our company, I thought it would just be helpful to provide some context of the operation, the organization that I support  and how we use equipment to provide some context as I talk about what I do a little bit more. So you can kind of see the divisions here on the screen. These are the divisions  of our building and infrastructure group.  The majority of our revenue comes from delivery as a design builder or a general contractor or a CMAR type delivery. On those types of projects  where there's not a self-performed component or a limited self-performed component, we may have incidental equipment needs like scissor lifts or heaters  if we're doing some winter work or need heat for drywall operations and that sort of thing.  Material and personnel hoists are something that we need on many of our projects, particularly with high-rise type projects. That's generally a scope that we'd subcontract  and obtain from a lower tier equipment vendor.  But many of our divisions do self-perform work, significant work, and those are all listed here and obviously have a need for and a large fleet of equipment  that we are responsible for insuring. So Atkinson Construction,  headquartered in the Pacific Northwest and in Southern California, does roads, bridges.  They have an underground division that does tunnel work. So that is something that we have to be mindful of and make sure that, as John alluded to earlier,  many policies contain underground equipment exclusions. We obviously need to make sure that we don't have those exclusions.  Shirley is a heavy civil road bridge contractor based in Northern Virginia.  C3M is a division of ours that focuses on electrical, transit electrical. So traction power systems for commuter rail,  overhead catenary systems, that type of kind of specialized electrical work is something that they are responsible for. Within the Mid-Atlantic, so out of our DC office,  we have self-performed divisions for Clark Concrete and Clark Foundations. So Clark Concrete, obviously exactly what it sounds like, performs self-performed formwork,  placing, finishing concrete operations on all kinds of projects.  Clark Foundations handles complicated support of excavation systems, foundation systems,  even facade preservation for building within an existing building and reusing the facade, a very specialized group. And then Clark Water and the water treatment,  wastewater treatment space, they self-perform some elements of their work, like process piping and that sort of thing. So all these divisions definitely have the need  for different types of equipment to support their operations.  You can kind of just see just our footprint a little bit, where we're, what we call our home bases, the blue being the Clark Group offices, Orange, Atkinson, C3M and Shirley,  just kind of gives you a sense of where our offices are.  But this map kind of gives you probably a better sense for where we operate. Heavily in the Mid-Atlantic, Maryland, DC, Virginia, the Central Northern region, like Illinois,  Tennessee, California, Pacific Northwest, definitely a national footprint. And we have equipment kind of supporting these operations located strategically throughout the US.  And in terms of the types of markets that we serve and the types of focus on self-perform work that we do within those markets,  I mentioned the C3M group, rail and mass transit. We also have a civil group that is kind of based out of our corporate headquarters that handles heavy maintenance,  mass transit, intermodal facilities. So they definitely have a self-perform aspect to their work. Roads and bridges, as I mentioned, Atkinson and Shirley,  that's pretty much strictly what they do. Again, Atkinson does have a underground division. So we've got tunnels and mines kind of there in the bottom right.  Another kind of interesting scope of work that we have to be understanding of and understanding what types of equipment gets used  on those types of projects and what the unique risks are. And then, I mentioned the water, waste water, water treatment on the Clark water side.  That's another market that we do self-perform work in.  So just kind of highlighting some of the equipment that you may find on our projects. John did an overview of all the types of equipment that may be underwritten.  Most of that you'll find within our fleet of equipment, not so much, actually not at all on logging. We don't do any logging operations,  the exploratory drilling, that type of thing, no. But most of the other types of work that were highlighted there, you'll find within our fleet.  So tower crane came up with John, that they don't write the tower cranes. Clark Concrete does have at least a couple tower cranes that they own and utilize on our projects  where obviously the need calls for it. You can see the middle picture there. You've got a complicated supportive excavation system.  And that's really, you can kind of see like it's a Clark Foundations and Concrete project where you've got a tower crane in the middle.  You've got the rakers, the supportive excavation equipment, I'll call it, the things that support that operation. Bottom middle, an Atkinson job in Pacific Northwest.  You can see some of the, not great, but there's some equipment there, I promise. And then in the right side there, it's a Shirley job. So, and you can see on its up top,  there's a paver that's sitting on the bridge there. Another piece of equipment down below that's hoisting. So there's kind of four examples of what you might see  out on our job sites across the country.  And then just a few more, just cause I think these are fun. C3M on the left side there, there's a high rail truck with a bucket attachment.  I don't know if that truck there is tagged. It may not fall under the equipment policy. It may fall under an auto policy if it is driven on the streets.  That's generally how we would set up our coverages. If it's got a license, if it's driven on the streets, it's going to fall under the auto policy as opposed to equipment.  But in the center there, you've got another Atkinson job. You can see the scale of some of those projects. That right there is a snowshed that was built up in the Pacific Northwest.  For roads passing by the side of mountains where you've got the potential for avalanche, snowfall, or landslide, whatever, that's actually a snowshed.  It's meant to avoid the road from getting covered with debris and snow and shutting down traffic. Bottom left, Clark Water, constructing a tank, a tilt-up type situation.  Then bottom right, Atkinson underground. As I mentioned, we've got the underground scope that we do work on throughout the country where the work time takes us.  In terms of where do we keep our equipment, as you saw from the footprint, from the map that shows where we do, where we work, where we have active projects or recent projects,  we're all over the place. Different projects will have different needs and lay down yards and or places to keep equipment temporarily while that project is ongoing.  Although many of them are particularly highway projects, obviously may span many years, miles and miles of new highway or interchange, which takes several years to complete.  There may be a more semi-permanent yard, lay down area that's utilized for those operations. But in terms of the permanent yards where the bulk of the equipment comes back to,  you've got Atkinson up in the Seattle area and in the Southern California area.  Shirley in Northern Virginia, which is pretty much exclusively where they operate. Clark has a yard in the DC area where the tower cranes  or supportive excavation parts and pieces may live when they're not being used. Then C3M also has a DC area yard where they're keeping, whatever, cable and that sort of thing.  I would say that the main three divisions that have the bulk of the equipment are definitely Atkinson, Shirley, and then Clark, particularly the Clark Civil,  Clark Concrete, Clark Foundations groups. Within each of those divisions, there's an equipment group that spans the organization,  but within each division has someone who's the lead,  is the person who's primarily responsible for leading that group and understanding the fleet, understanding what types of equipment need to be purchased,  what types of equipments will be better rented or leased, and serve as a centralized group that evaluates the equipment needs across the company.  What's required to maintain a fleet of that size. We do have a group that's really, the point is we're dedicated really to equipment and what the company needs,  and how it gets maintained, and when it's time to retire, and when it's time to buy something new. With all that being said,  and you have a sense for the organization and the scale and the types of projects we do, what is the role of me, what is my role and the role of risk management in general?  Obviously, we need to ensure all of that equipment. We place coverage, place and renew coverage annually. It's primarily, I would say,  an annual effort to get a hold of the values of our equipment, share that with the broker, and identify what might be new, how the values have changed year over year.  There's not a whole lot of change year over year. The annual renewal of the block policy, as we call it, which is equipment and property, there's not a whole lot,  I would say, that goes into that piece of it. But we do occasionally, somewhat infrequently, but every now and then,  we've got a specific need where we've got coverage that we may need to, maybe we're renting a piece of equipment for some operation that exceeds  our lease-rented borrowed sublimit, or maybe Atkinson has a tunnel job where we're actually going to be utilizing a TBM. Whether generally in those scenarios,  at least in recent history where I've been involved, it's been where we've leased it, we've rented a tunnel boring machine,  but then responsible for that machine while it's in our possession, and we've had to purchase coverage for that piece of equipment through our policy. Placing renewing coverage,  that's obviously falls within the scope of our responsibilities in risk management. Communication is another thing that's really important.  I mentioned the lease-rented borrowed sublimit. On the screen, you can see the idea of the unscheduled equipment sublimit. Going along with placing renewing coverage,  which I'll step back for a minute, is getting the best terms, obviously. We want to get the largest unscheduled limit that we can get,  the largest lease-rented borrowed equipment limit that we can get. Because while we try to communicate, and we do communicate to our teams and to  those individuals who will head up the equipment group, we need to make sure they understand, look, if you're going to go out and buy a piece of equipment that exceeds X dollars,  which is either the newly acquired limit or the unscheduled equipment limit, you need to tell us because we need to be able to go back to the carrier and say,  hey, we've got this piece of equipment that falls outside the scope of the coverage that we've purchased or it wasn't reported,  and we need to be able to make sure that we're protected. Or I would say a large piece of equipment like a TBM or some specialty crane that becomes necessary for an operation.  Again, same idea. It's important for us to communicate to the group that would get pulled into a decision like that to say, hey, have we talked to risk management?  We need to make sure that we've got insurance for this thing. So that's obviously something that we need to make sure of to protect the enterprise.  Deductibles also just managing expectations. We'll talk claims a little bit later, but just the idea of making sure people understand  that there's not a get out of jail free card every time there's a loss. Anytime it has property damage or equipment damage, there is a deductible and the job does have to,  in some cases, be responsible for that. Setting those expectations is important.  Then more on the paperwork side, owner contracts, I would say we do review owner contracts. They're not as heavy on property equipment type language and requirements.  They're mostly just say, you're responsible for your own stuff. Don't come talk to us about it if it gets damaged. So there's not a whole lot there.  But equipment lease agreements is something that we get asked to review from time to time and those are important to make sure that we can comply with  the requirements or it's another insight into are we buying or renting? Are we renting something that we need to report to the carrier? We need to make sure we have coverage for.  We operate also in an advisory capacity upwards to senior leadership. It's important for us to make sure that we're just keeping them apprised on year over year. What's the premium?  Are we paying more for insurance for this, for equipment insurance than we did the year before and why? Is it because the values have gone up or is it because we're having losses?  If we're having losses, well, why are we having losses? Those are the types of conversations that we need to have and make sure that we get  a buy-in on how we handle the answers to those questions and what we do about them. Again, what's driving cost? Then also big picture initiatives like technology.  How is technology used with equipment? Autofleet also, this is focused on equipment. What is out there that we should be thinking about or using or  considering in an effort to prevent losses or minimize losses or react to whatever is happening in that renewal process year to year?  We're the front lines of the insurance world for leadership and we need to make sure that we're communicating to them and giving their input and  making ideas available to them to make decisions on.  Then day-to-day, obviously, if claims happen, losses happen, we're supporting our organization, supporting the jobs on those. The really, really mundane stuff of,  I got an equipment, I've got a rental and our insurance expired, can you send me a new cert? We do that too.  We have a poll. We do. I am going to launch it soon. The question is, which category of equipment accounts for the majority of Clark claims?  Is it roadside temporary impact attenuators or all of their other equipment combined? I'm going to go ahead and launch that and give everyone about 15, 20 seconds to respond.  Sort of a leading question. I mean, it's fine.  All right, we're at 42 percent voted. Let's go guys.  All right, a little bit more time. Only 54 percent of you have voted. I'm watching. There we go.  Come on, come on. This is a tricky one. Look at the results are like neck and neck here. All right, I'm going to close the poll.  We're at about 70 percent voted. I've now gone double the time I said I was going to allow. Let's close it and see the results here. This is with 72 percent voted. We are 50-50.  What is the answer, Josh? Well, I mean, it was meant to be a little just to get people thinking. It is attenuators, at least when I last checked.  It's probably evened out maybe a little bit as we've made some efforts to try and stop that from happening. But yeah, I mean,  I'm going to go to the next slide just because it helps to articulate a little bit. But I mentioned our Atkinson group that operates in Pacific Northwest,  the Seattle area and Southern California, does street and road and bridge and our Shirley group as well. But really, I mean,  anyway, the biggest challenge we have is with this third-party motorists that enter into a work zone, lose control of the car for whatever reason.  It doesn't matter what the reason is, could be anything. But just striking attenuators, which are those trucks you see sitting on the side of the road that are there to  protect particularly workers who are up ahead working on the roadside. I've been out on a highway job in California along a major interstate,  and standing on the side of the road as cars whizz by, with your back to the traffic. I mean, it's difficult to appreciate until you've done it.  But I mean, the attenuators are there to protect our people, but unfortunately, they are the thing that gets run into the most, which is a good thing.  I'd rather, obviously, those be run into than anything else. But attenuators, the aero boards, the light plants, the things that are intended to tell people,  tell motorists to move over, slow down. Those are the things that get hit all the time. They're not super high dollar claims. I mean, maybe that's a relative term.  I don't know what this group thinks is a big claim, but they add up over time with frequency. They are something that we definitely had to focus on in recent years.  Theft is another thing. In terms of frequency, I think it's really, if you scan through a loss run, it's primarily things that have been run into on street and road projects,  or theft, and that can be from anywhere, whether sometimes on the street and road, just because it's stuff out in the open, as opposed to in a yard locked down.  But definitely, if you have a project in maybe a rough part of town, or a remote part of town, or whatever, with a Connex, or a trailer, or some other thing that has a lock on it,  it obviously doesn't mean that there's not some C3M deals with that, with their cable, getting stolen, not equipment, but nonetheless.  What is the role of risk management as it relates to claims? Obviously, coordinate with adjusters. We're the ones that are generally receiving an incident report from our field.  We're reporting it to the carrier. The adjuster who is assigned is making contact with whoever it was in risk management that reported the claim initially.  Then generally, we're getting them set up with whoever is boosted on the ground that knows the most about the loss, that can answer the questions, and hopefully get to resolution.  Then along those same lines, just communicating to project teams, back to the earlier slide in terms of managing expectations, is this covered?  Just because it's damaged doesn't mean it's covered. Or there's different circumstances or things that people need to be aware of. Idle equipment is not damaged equipment.  Things that just break, sometimes things just break. But also, the fact that you can't use something and your job is delayed because you can't use it, there's an exclusion for that.  It's important, again, for us to manage expectations, communicate to project teams, and make sure that they're not entering into a long process of a claims adjustment  with an unrealistic expectation of how it's going to go. There's a deductible, whatever that might be, tiered usually on the value of the equipment.  Small stuff has a small deductible, the bigger stuff or the underground stuff is going to have a larger deductible. So, you know what, be aware that this may be a significant claim,  but you may not get any money. So, it's important to, again, set those expectations. And I wrote tough decisions, and there's a couple kind of nuances to that.  One is, you know, I mentioned the attenuators. So, you know, we start seeing, I mean, really this could go for any kind of frequency of loss that's happening,  but, okay, what can we do about that? You know, we can do our best to avoid the situation altogether, but guess what, we're doing street and road work,  there's going to be attenuators, and unfortunately, you know, they're going to get hit. And there's much, you know, there's larger initiatives,  and, you know, that are underway to unwork some safety, you know, from an employee safety perspective, but, you know, the sort of offshoot of that is also the other things  that get damaged and broken when you have incidents like that. But so, you know, we said, well, let's just take a higher deductible  on these things that keep getting run into, right? And that's a way to say to a carrier, look, you know, we get it, we're doing what we can, it's going to happen,  but we'll take a little bit more, you know, risk a little, we'll have a little more skin in the game on these pieces of equipment.  I'm sure that's music to a lot of people's ears on this webinar. But another thing is, you know, okay, well, what divisions are having the losses, right? So every year we,  for the annual policy, we report the values, we get charged a premium, and we allocate that  to our different divisions, right? Well, who's, if premium, let's just say, I'm not saying this  is the case, but let's just say year over year, you see an increase in premium because you have  some losses. Well, who should bear the brunt of those losses? You know, that's a decision that  could be made where you say, well, you know what? Sorry, sorry, street and road team. All the losses  are coming from you all. And so we're going to have you pay a little, you know, we're going to  kind of hold you a little bit more accountable, you know, for this premium increase, because  why should this other group that's not having the losses be exposed to that? And then there's,  then there's the decisions that can get made on, you know, the types of losses that you really are  just, I'll use the word ashamed, not ashamed, but you know, you report, it's like somebody left their  keys in the truck or the piece of equipment because they went in to go get a snack at 7-Eleven  in the middle of the night, and when they came back, it was gone. You know, well, you know what?  Maybe we're not reporting that one. You know, maybe that's, that's a, that's a decision that  can be made, you know, with obviously the right people making that decision. Maybe there are  some claims that it's only going to hurt us in the long run, and maybe it's better we just  stick it, I don't want to say stick it to the project, but you know what? This is your issue.  Sorry, but you know, there's ways that, there's a bigger picture that we need to be aware of.  For sure. So Josh, actually interesting that you said that. We have a question, and I just  want to be sort of respectful of time and leave a little bit of time for us to have a sort of  broad Q&A afterwards, but we are being asked if there are disciplinary or training procedures in place for employees that generate losses specifically with respect to like operator  error on these pieces of equipment. I would say no. I mean, I think not at this time. Where that comes into play more is, is on the vehicle side. If you're, if you're given a pickup  truck or some sort of, you know, vehicle, a company vehicle, you know, obviously like those driving  privileges could be revoked if you're having, you know, following the policies or having repeat  issues. I mean, certainly if there's an incident, there's an incident review. There's a, you know,  there's steps that we go through to understand what happened, and you know, why it happened,  and how can we do better, and was there anything that's, you know, a serious lack of judgment, and you know, what is the outcome of that? I mean, there's a process that is followed.  I wouldn't say there's anything, you know, concrete in terms of like, if this happens,  then this is the consequence. There's, it would need to be an evaluation of the overall incident.  And certainly, I mean, within our, within our judgment to say, you know, for any, any,  anybody within the company who's got responsibility for managing people to say, well, this person's  not going to carry equipment anymore. That certainly is something that could happen.  I probably wouldn't necessarily be involved in those decisions. Great. Thanks so much. I think if you can roll through your JV and claim  section, then we can sort of open it up to some last minute Q&A.  Yeah, I'll go roll through this one. So, just a unique claim I wanted to bring up. I mentioned  Atkinson, who kind of has a, kind of goes where the work is. They were a job a couple years ago  up in Alaska. It was actually a gold mine. So, they excavated a new drift into the mine,  which is, you know, drill and blast. And they had some equipment up there that they mobilized to the site, you know, in advance of them getting started with this work. And then a  significant snowstorm rolled through. And then this is probably one of the most unique claims that we have seen. Just, we don't, there's one job every however many years in Alaska.  Anyway, so, heavy snow resulted in an avalanche, knocked a bunch of equipment down the side of a mountain, or buried it in snow such that it was inaccessible. So, you know,  what were the challenges with that claim? Obviously, access, you know, was 60 miles north of Anchorage. There was a bunch of snow. So, it would have been difficult to get there,  no matter what, for anybody to get there, for an adjuster to get there. But obviously,  the heavy snow made it even harder to get there and delayed the time, you know, delayed the  ability to get out there and evaluate. And then there was also just another kind of interesting  thing, just specialized equipment. So, you know, a connex or a sea container that had been fitted  out with electrical infrastructure and variable frequency drives to run the exhaust fans that  will go into the mine to help ventilate it. So, you know, you've got this piece of equipment that's worth $100,000 of, you know, it's got $100,000 worth of stuff in it, in this box,  that top, you know, topples down a mountain. And when you get the valuation back from the  adjuster, it's $2,500 because it's a sea container. So, just, you know, kind of working through that,  you don't necessarily have, like, I don't buy this thing. I don't have a piece of, I don't have an invoice I can hand you to show you what it costs. I could show you the invoice  for all the parts and pieces. And then I can estimate what the labor was to build this thing.  But that's just a challenge that we had. So, lessons learned. I mentioned this earlier, but just for our project teams, you know, the equipment that just can't get used,  that you're paying rental on to a rental company, that doesn't mean that's not equipment coverage.  You don't have coverage for equipment you can't use. And then just, you know, again, the lease order terms. I mentioned now our role in reviewing lease orders or equipment lease  agreements and what our obligations are for paying rental even if we're not able to use the equipment in those kind of catastrophic scenarios. So, joint ventures, you know,  joint ventures are something that we find ourselves in from time to time. And there's, you know, a couple of few reasons why you may utilize a joint venture. One is resources or  personnel. Maybe it's a large project and, you know, you've just, you know, you need 100 person  staff and we have 50 and somebody else has 50 and let's get together and pursue a job.  It could be bonding capacity. That's another driver of, you know, a large project that, you know, where you, where it's, you know, a large project, which requires, it's a large  contract value, significant bonding capacity. You may want to help, you know, split that up and partner with another general contractor of similar size and pursuing a job like that.  And then in some cases, it may be a local presence. If we're pursuing a project for a strategic  region and a strategic reason in a, you know, maybe a new region or a less familiar region, it may make sense to kind of partner with a local GC just to kind of establish that  relationship with the community and, or who may know the subcontractor community better than us.  So, you know, equipment considerations in a JV and how do we ensure them, you know, who's the lead? Is it Clark or is it the other partner? And I'd say the biggest two things  really is, is there any work being self-performed? Are we operating as a GC, a design builder,  a CMR where we're not performing, self-performing any work? We're not going to have any real need  to rent or use our own equipment on the performance of the work. Or are we self-performing  and there will be a need for the partners to utilize their own equipment or to rent equipment.  And if they are renting equipment, is it, are you renting equipment directly as a JV entity?  Are you renting it individually or are you purchasing equipment as part of the JV? Because  it's a long job and it may make sense, you know, in the long run to buy a piece of equipment than  to pay rent on it for X amount of years. So depending on those questions or the answers  to those questions, what are your options? So if you come together as a joint venture and each partner has their own, you know, equipment insurance policy, you could just have each  partner bring their own and partner A says, I'm going to, I'm going to use my equipment and partner  B is going to use their equipment and you just separately ensure your own stuff. That's obviously  the easiest way to do it. But if you have those circumstances I mentioned where maybe you're  buying equipment as a JV, you're going to buy a crane, you're going to buy a skid steer, you're  going to buy a loader, or you're going to be renting significant pieces of equipment, large pieces of equipment frequently or routinely throughout the project, you know, maybe you  would rather just have a JV policy in place to avoid, you know, the losses sticking to one  partner's program or the other. So those are all things that kind of go into the consideration of  how to handle joint venture exposures. And so just lastly, just, you know, an example of a joint venture, a large project that we are involved with in the mid-Atlantic, it's a  it's a tunnel project in the overall, the Frederick Douglass tunnel project, but our scope is the south approach. So the basically the railway leading up to the south entrance of  the tunnel. You can kind of see like, you know, just generally what the scope of that project is.  But, you know, all of the things I just mentioned were considerations as we evaluate, you know, how  do we deal with the equipment that is going to be on this job? It's a probably 10-year plus,  10-year job. It's large. There's going to be a lot of equipment used over the course of the  project. There's going to be equipment. We'll have short-term rentals of high dollars for, you know, specialty equipment, maybe large cranes that may need, you know, that the JV may  rent directly, long-term rentals for, you know, selected equipment. We're performing buy-sell  analyses of, okay, we need this piece of equipment. We're going to have it for, we're going to need it  for, you know, X amount of hours or for this long, this period of time. Does it make more sense for  us to pay a monthly rate for it, you know, over the course of however many years or does it just  make sense to buy it? And, you know, again, is it each individual partner that's making that  purchase or renting that piece of equipment or is it the JV itself? And so really what we end up  with is a mix of all of those things. We've got equipment we're going to buy directly by the JV.  We have equipment we're going to rent by the JV. We're going to have, each partner's going to have  equipment that they own that is going to be used in the performance of the work. And, you know,  we've got even a 20,000 square foot office that we've leased to kind of serve as like a maintenance  sort of headquarters for the job. So with that all in mind, you know, in this particular very large,  long project, we're going to end up with kind of a mix of all of both scenarios where we've got  each partner's going to be responsible for their own equipment and their own insurance for that  equipment and their own deductibles that they choose for that equipment. Whereas the JV is  going to be, we're going to purchase a standalone policy for the JV for the equipment that they will  be renting and buying over the course of the project where you kind of are able to then  sort of contain the exposure for that, the risk for those pieces of equipment, you know, to the JV entity and not with each individual partner.  It's really great to get this perspective, Josh, because I, as a builder's risk underwriter,  I feel like I see joint ventures a lot. And you're like, great, there's all of these names  that are together and they have a great reputation. But what does that mean for me? Right. So it's  really nice to get that context. And thank you so much. I want to just have our audience take the opportunity now. And, you know, I think we're going to open this up for questions.  I think we're going to open this up for sort of general like concluding Q&A. So if you have any  burning questions that you held on to until the end of the presentation, the time to ask them of  our panelists is now. And I also would like to just ask everyone to keep an eye out in the chat.  There is going to be a survey link placed in there. Please, please provide your feedback.  This is how we determine IMUA determines how to continue developing educational presentations, etc. So your feedback and your participation are welcome and are needed for us to keep  doing what we're doing here. So I'm actually, wow, we must have done so well. We have no questions. Unbelievable, if everyone in the audience is willing to accept my tally  and my vote for most most engaged participant willing to do that. Although I would like to  just give anybody who's, you know, trying to claw back a couple extra participation points.  An opportunity to take the lead here. We have compliments. Thank you. Let's see anyone else.  Don't see anything rolling in. All right. Okay, let's see. Jason is asking,  what is your perception of underwriters? I'm guessing this is directed to Josh.  I mean, we, I would say that we just, we have.  We buy a lot of insurance, right? A little bit of insurance, builders risk insurance, equipment insurance, and we kind of have a diverse group of insurers that we utilize  for those reasons. Equipment specific. It's been pretty stable, I guess. And I feel like  we've, so my perception is just that if you're willing to, you just need to provide information,  explain why it is you need something. Provide them with information. Be up front and,  I don't want to say truthful, that's obvious. But just, you know, just communicate your needs.  And I don't know, my overall, I guess, experience has been favorable. I don't have any major  I don't have any stories or anything to fall back on that would cause me to say I have any  problems. It's been good for us. Awesome. We have another comment basically saying, it was really, really nice to hear a risk manager's perspective and point of view.  As an underwriter, I do not speak with the risk manager, only the agent or the broker. So, I echo that. Yes, thank you. We also have. If I could just say, that's probably why my,  it's hard for me to answer that first question. I don't really speak to underwriters that frequently. It's really through the agent. So, in my experience, I've generally, you know,  if we've asked for things and, you know, we say we get what we want. But, you know, we're able to  say, look, this is a need we have. Like, let's work together and come up with language that  makes us happy or a sublimit that makes us happy. Or, you know, how can we address this need that  we have? And I just feel like we've been fortunate. And obviously, I think that comes with,  you know, maybe good loss history is, you know, to have a good relationship with underwriters and  be able to really have a good kind of working relationship and understanding of what each person's trying to accomplish. And, you know, so, you know, nothing but good things for me.  Awesome. We have another compliment. Great presentation and informative, not just from an underwriting standpoint. Thank you. John, question for you. This participant  mentions that they missed the first 20 minutes of the presentation. So, they might have missed if  you had mentioned this. But the question is whether or why underwriters write contractors equipment on stated value? Well, that's one condition. You can do  replacement columns. You can do actual cash value or you can do stated value. Sometimes,  it's easier to do stated value. If it's a little bit closer to being new, you can just do a stated  value. I mean, I see stated value used more with like builder's risks conditions. You get some  bank or consultant or a lawyer involved and they want it on stated value as opposed to  replacement costs or ACB. But stated value can be used with that type of situation. You got to do,  you know, you got to do your homework and make sure you're doing it. It's an accurate value  because you don't want to do a stated value of half a million and you find out the piece is  really worth like $250, you know, and then they're going to maybe pocket some extra money.  But yeah, great question. Excellent. Well, nothing else rolling through. I am happy to announce that Catherine Reddell is our winner. So, Catherine, Eileen will be  in contact with you via email for your Amazon gift card. Don't spend it all in one place.  A huge thank you to everybody for making this possible. If anyone has questions or concerns  after the fact, obviously, you can feel free to either reach out to IMUA or I'm sure you can find  Josh, John, Dan, and I on LinkedIn. We'd be happy to, you know, sort of carry on the conversation.  But again, thanks for your attentiveness. Thanks for attending. And I hope everybody has a great evening. Thanks. And you are an excellent hostess, moderator,  whatever the term is. I appreciate it. Whatever. Thanks to Eileen.

Video Summary

The Inland Marine Underwriters Association held an educational session featuring Eileen Monreale, Gabrielle McCann, John Clark, Dan Fromm, and Josh Shaumburger. Eileen introduced the event, explaining the attendee control panel features and encouraging engagement, with a $25 Amazon gift card as a prize for the most engaged participant.<br /><br />Gabrielle McCann, a senior underwriter at Everest, served as the moderator, expressing gratitude for the opportunity and sharing her background in Inland Marine claims and builder's risk underwriting. Gabrielle emphasized engaging with the audience to understand their background in the insurance industry via polls and encouraged questions throughout the presentations.<br /><br />John Clark from Selective Insurance discussed underwriting contractor's equipment, including the types of equipment, underwriting tools, and rating methods. He shared insights on the profitability of contractors' equipment and the importance of maintaining accurate valuations.<br /><br />Dan Fromm, a senior special investigator with Liberty Mutual, discussed fraudulent activities commonly encountered in insurance claims. He explained the critical aspects of fraud, including intention and false statements, and shared different types of fraud within the industry, along with investigation strategies.<br /><br />Josh Shaumburger from Clark Construction talked about risk management from a contractor's perspective, providing insights into placing coverage and managing claims, particularly focusing on the importance of communication and strategic decision-making in joint ventures.<br /><br />Throughout the event, polls were conducted, and questions from the audience were addressed, exuding an informative and interactive session on underwriting practices, investigation insights, and risk management strategies.

Asset Caption

This class explores risks and trends in contractors equipment insurance. The class is broken down into three topics covered by speakers with diverse expertise.

Topic 1: Underwriting Trends in Contractors Equipment

This session provides a view from the underwriter’s desk on a contractors equipment account and includes the steps that an underwriter undertakes when an account is first submitted. This portion includes details on valuation, loss of use, rental expense, supply chain issues, labor shortage, battery energy storage, market trends, and key exposures.

Presented by: John Clarke, Inland Marine Segment Manager, Selective Insurance Co. of America, Northeast Region & NJ

Topic 2: Claims & Fraud

This session addresses the role and involvement of the Special Investigation Unit (SIU) with inland marine claims/losses including:
- The relationship between SIU, claims, and underwriting,
- The elements of the investigation related to these losses
- The outcome and impact of the SIU investigation on the claims and underwriting

Presented by: Daniel Frome, SIU Investigator, Liberty Mutual Insurance

Topic 3: A Day in the Life of a Construction Risk Manager

This session covers risk management reviews, controls, policy placement, rental procedures, tracking, maintenance, valuation, and operations facing project support, placing insurance, and acquiring finance. This session also discusses highlights and challenges including the new $1B+ Amtrak Frederick Douglass Tunnel (South Approach).

Presented by: Josh Schonberger, Senior Director, Risk Management, Clark Construction Group, LLC

This class is moderated by Gabrielle L. McCann, Senior Underwriter II, Builder’s Risk, Everest

Keywords

Inland Marine Underwriters Association

Eileen Monreale

Gabrielle McCann

John Clark

Dan Fromm

Josh Shaumburger

education session

contractor's equipment

fraud investigation

risk management

insurance claims

underwriting tools

builder's risk

audience engagement

polls