cdn.ymaws.com · sport, “I don’t care if it’s your kid’s team, whatever. If you need the time, you’ve got it,” says Jim. Amongst the staff of five, Jim and Caleb coach

6 The Alberta Broker, February - March 2011

by Annette Hubick

When brokers and their representa-tives meet with government, one ofthe key arguments for safeguarding alevel competitive playing field is thedifference brokers make to their localcommunities. Brokerages not onlyemploy thousands of Albertans in hun-dreds of communities but also spend asignificant amount of time and moneysupporting causes big and small. Theseactivities seem not only born out of asense of gratitude, of “giving back,” butalso from the very essence that definesthe role of the insurance broker: help-ing people.

We had an idea. Let’s create a plat-form for celebrating the communityinvolvement aspect of the insuranceb rokerage – the proof being in thepudding, so to speak. And so, the firstI B A A /A l b e r ta Bro k e r Making aDifference contest was born.

In the fall of 2010, members wereinvited to submit their entries in oneof five categories: youth, sport, social,

health, and the power of one.Although the last category was meantto showcase initiatives that were pri-marily undertaken by one individualbroker, and the rest were focusing onb roader brokerage involvement, wefound that line between the two wasoften blurred. Even when the initiativewas undertaken company-wide, theretended to be one or two championswho led the charge. Conversely, it wasoften the case that the passion andenthusiasm of an individual was conta-gious, thereby gaining the support ofcolleagues and the brokerage (i.e.cash).

T h e re were some other commoncharacteristics. Like many volunteerand charitable activities, involvementstemmed from a personal connection(e.g., relationship with people affected,c h i l d re n ’s a ctivit ies , a t alent ori n t e rest, a local community need,etc.). Another common statementwas although some activities were per-formed by a few individuals, their abil-ity to do so was because of the supportof their employers and their “non-

involved” colleagues, i.e., somebod yhas to pick up the slack when peopleare out making a difference.

The entries were reviewed by fivejudges with all identifying informationdeleted to ensure impartiality, and thewinners were selected in earlyDecember. The individuals serving onthe judging panel were:

Mardene Watson, IBAA presidentKaren Dyberg, IBAA past presidentRalph Zutter, member-at-largeColin Babiuk, chair, Public Relations &Executive Leadership in the Non-ProfitSector, Grant MacEwan UniversityAnnette Hubick (yours truly) publish-er/editor of The Alberta Broker andpresident/marketing consultant, Link PRIncorporated

The five winners received a $500donation to their charities of choiceand the opportunity to be profiled inthis issue of The Alberta Broker. Hereare their stories.

Continued on Page 8...

Making a DifferenceThe five brokers who won the IBAA/Alberta Broker contest

C h i l d ’s playRavenill Agencies Ltd.Edmonton

Jim Harris, principal of RavenhillAgencies, is an ex-cop surrounded byteachers: his wife, daughter and son-in-law, Caleb, who now works at thebrokerage. He has seen first hand theimpact that can be made when adultstake an active interest in the lives ofkids and the benefits to youth and soci-ety when kids are involved in sport.And so, Ravenhill has a philosophy ofsupporting its staff ’s efforts in youthsport, “I don’t care if it’s your kid’steam, whatever. If you need the time,you’ve got it,” says Jim.

Amongst the staff of five, Jim andCaleb coach volleyball, and Davecoaches hockey and soccer year-round.“The staff who are not coaching helpby taking on the extra workload,”Caleb points out, “and they share inour success stories of the kids.”

When Jim’s daughter Jen, a teacherat an Edmonton inner-city school,decided to take on the challenge ofcoaching the boys’ volleyball team, Jimoffered to help. He admits that his ini-tial involvement stemmed from hisc o n c e rn for his daughter’s safety –these were troubled kids from a roughpart of town – but he quickly saw howthe boys responded positively to beingon the team.

He developed special relationshipswith many of the kids. He made a dealwith one that, if he attended and triedhis best at school, he would earn a

reward. The prize? Jim wouldtake him out for lunch once amonth. Something so simplethat made such a difference.The young man (no parents,bad home life, etc.) is now inhigh school, playing on thesenior volleyball team. Whenhe graduates, he has an appren-ticeship job waiting for himthat Jim lined up with a friend.

His relationship with thekids expanded into teachingthem all how to play hockeyand a year-end camping/hikingtrip up to Nordegg for those whoachieved the “show up/try hard ”school challenge.

“It was more than volleyball, hockeyor hiking. It was about life. It taughtme that, if you spend a little bit of timewith somebody, you can make a hugedifference.”

The school was closed down and lastyear, Jim’s daughter began a teachingjob at a brand new school inE d m o n t o n ’s southwest, a decidedlymore affluent area. Although some ofthe challenges are diff e rent, Calebcontends that the benefits of educa-tion through sport hold true. “Theysound cliché but are a proven fact:teamwork, commitment, achievinggoals, working through adversity, etc.,”he lists. For Jim, it boils down to:“When you give 100% to sport and100% to school, you’ll give 100% tothe rest of your life.”

$500 donation prize to: S p ru c eAvenue School (for sports programsand equipment)


Far left: Co-coaches Jim Harris and daughter,Jen

Celebrating a medal-winning performance

Difference Maker: Yo u t h

“”

It was more thanvolleyball, hockey

or hiking.It was about life.

Gold Key Insurance Ltd.Strathmore

Gold Key Insurance has been sup-porting Strathmore Minor Hockey formany years including providing teamjerseys, sponsoring advertising anddonations for tournaments. JuliaBiletsky has two boys re g i s t e red inhockey, “and we believe that support-ing this association, as well as manyothers, creates a relationship with ourcommunity and allows us a way to giveback.”

In many communities acro s sCanada, especially smaller ones, hock-ey is part of the fabric that envelopslocal life. It provides opportunities foryouth to pursue active lifestyles, it canfoster leadership and character inyoung people and it is the centre of thesocial scene. Participants and support-ers become part of a larger, hockeyfamily.

In June 2010, tragedy struck when amotor vehicle accident resulted in thedeath of a father of a young teenageboy who played hockey with Julia’sson. The hockey family rallied. “Weknew that this boy would no longerhave access to participate in sports,and all the positive things that comewith that,” she says. Julia and her hus-band joined a dedicated group of peo-ple to come to the boy’s aid. They

decided to establish an education and sports trust fund for him and to stage afundraising event. Faced with theimpending summer break, the groupdecided to hold the event before many“family members” left on vacation, etc.

In less than two weeks, the organiz-ing committee planned and staged adinner and silent auction. “It was alldone by volunteers and donations.Nothing was hired out or bought,” saysJulia. This meant that all the fundsraised would go directly to the trustfund. For its part, Gold Key donatedJulia’s time devoted to organizing theevent (with the support of her staffwho never hesitated to take on extrawork), the liquor liability policy andstationery supplies. Several employeesattended the event and bid on auctionitems.

The event was an overw h e l m i n gsuccess, raising over $30,000. Tw oweeks of effort that will benefit theyoung boy for his lifetime. As Juliasums up, “It is times like this when peo-ple really pull together to make a dif-ference. It is amazing what people cando together when we have a goal andare passionate and caring towards eachother.”

$500 donation prize to:Strathmore RegionalVictims Services Society

Difference Maker: SportIt takes a village


Julia Biletsky (in red) and the Gold Key Insurance team

Aurora Underwriting Services Inc.

570, 10310 Jasper Avenue,Edmonton AB T5J 2W4

Telephone: (780) 442-2240Toll Free Telephone: 1-866-328-1314

Fax: (780) 428-8143Toll Free Fax: 1-866-428-8143

CommercialWholesale

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Auto Physical Damage (Incl. Logging)Special Events • CEF • Aviation

High Value Homes

Please visit our website atauroraunderwriting.com


Darson Insurance ServicesStony Plain

It is a story of turning heartbreakinto inspiration. Yvonne Cadwell’sson, Derek, was just 31 years old whenon July 1, 2007, he lost his four-yearbattle to ALS (Amyotrophic LateralSclerosis, more commonly known asLou Gehrig’s disease). From the onsetof Dere k ’s devastating diagnosis,Yvonne had participated in the ALSSociety’s annual fundraising walk inEdmonton. It gave her a sense of“doing something” to help her sonwhose dream was to help find a cure forthe disease, or as he once said, “at leastto find the cause.”

After her son’s death, Yvonne took ayear off of work, eventually resumingher insurance career with a newemployer, Darson Insurance Services, asmall brokerage that is “very family ori-ented,” according to its principal,Audrey Anderson. “I let my staff havetime to do what’s important to them. Ithink that’s how you keep good staff.”

In the spring of 2010, Yvonne wasready to resume her commitment torealizing Dere k ’s dream and soAnderson’s “family-first” adage was putto the test. Yvonne had decided thatStony Plain and its surrounding com-munities needed its own “walk forALS” (there are nine across Alberta)to reach more participants and donorsfrom the area. In a few short, intensiveweeks, the event was organized, spon-sors lined up (including Darson) and

participants and donors tapped. OnJune 5th, the inaugural Derek’s Dream– Walk for ALS was held and raised$14,500, a feat that Yvonne says

wouldn’t have been possible withoutthe support of Darson. If there was evera scheduling conflict between her workand the walk, “Audrey would alwayssay, ‘You look after the walk first,’”Yvonne recalls, support that is all themore significant considering Darson isa three-person operation. Further sup-port came from her co-worker Tish,who helped with fundraising and spon-

sorship, and from many of the broker-age’s clients.

Planning is already underway for the2011 walk and Yvonne has her sightsset on increasing numbers and gettingmore young people involved in theevent, “So that when I can’t do it, itwill go on and Derek’s dream will oneday become a reality.”

$500 donation prize to:ALS Society of Alberta


Difference Maker: HealthAchieving Derek’s dream

L to R: Yvonne Caldwell, Audrey Andersonand Tish Doyle of Darson Insurance Services

“”

I let my staff havetime to do what’s

i m p o rtant to them. Ithink that’s how you

keep good staff .


Yvonne Caldwell and her son, Derek


Shane Byciuk, BrokerlinkCalgary

In November 2009, wanting to makea diff e rence to needy kids, ShaneByciuk began volunteering Mondaym o rnings at Brown Bagging forCalgary’s Kids (BB4CK), an organiza-tion dedicated to providing nutritiouslunches for hungry kids at schools andon the street.

Fueled by the desire to do more,Shane, a commercial account executivewith Brokerlink, turned to his colleagues.He was successful in channelling thep roceeds from the off i c e ’s monthly50/50 fundraisers to BB4CK. He thenorganized a charity bowling event toraise even more money and awarenessfor the charity. Over 100 people fromthe business, insurance and politicalcommunities participated, and localTV stations and the Calgary Heraldcovered the event. The sold-out eventraised close to $2,800, which translatesinto lunches for 2,800 kids.

B rokerlink sponsored two laneswhile staff members entered a teamand made donations. “It was fantasticto have the company’s support and thesupport of my co-workers,” says Shane.“My co-workers and employer arealways willing to support local charitiesand have always donated to the differ-

ent events that I get involved with.”(Last year, Shane also participated inthe YWCA Walk a Mile in Her Shoesevent.)

“You can’t overestimate the effect onthe office environment of havingsomeone like Shane,” says his manager,Jim Stone. “He has an unbelievablypositive attitude; it’s infectious.” Jimconcedes that supporting Shane andother staff members’ involvement incharitable pursuits comes with a pricetag, “but when you look at the benefits,they far outweigh the costs.” Heexplains that fostering a charitableatmosphere, and supporting its cru-saders, creates employee engagement.“No salary looks after that and Shane’sefforts contribute to that.”

$500 donation prize to:Brown Bagging for Calgary’s Kids

Difference Maker: Power of OneThe resident crusader

L to R: Bob McInnis - Executive Director,Brown Bagging for Calgary Kids; ShaneByciuk, Brokerlink

The Alberta Broker, February - March 2011 15

Sovereign congratulatesrecent CIP graduates

The Sovereign General Insur-ance C o m p a n y w i s h e s toc o n g r a t u l a t e the fo l l ow i n gCommercial Underwriters in ourCalgary office on receiving theirCIP designations at the annu a lc o nvocation ceremony heldWednesday, November 24th, 2010:Julie Evans, Kent Haley and WilsonWong.

At Sovereign, our people are ourmost important resource. We valuethe dedication and effort that Julie,Kent, and Wilson have made toobtain their CIP designation andc o n gratulate them on this mile-stone achievement.

Swiss Re launchesdeduction reductionendorsement

Swiss Re recently launched aD e d u c t i ble Reduction Endorse-ment for all IBAA memberswho participate in the associationE&O progr a m . The new, nocost enhancement, offered bySwiss Re’s We s t p o rt Insura n c eCorpora-tion, is designed to reduceo u t - o f - p o cket claims costs, pro-mote complete and thorough filedocumentation and facilitate earlyresolution of claims.To find out howit works and which claims are eligi-ble, or for information about SwissRe’s Broker E&O Program, pleasevisi t www. sw i s s r e.com/eo orcontact the IBAA.

The Dangersof Dabbling

by Nathaniel Bunck, J.D.,Vice President, Claims & Liabilities,Swiss Re

The errors & omissions battlefield islittered with confused claims. Whenbrokers write coverage they’ve neverwritten before for risks they don’t fullyunderstand or on unfamiliar policy

forms, they can wind up in hot water.No brokerage is immune from this pos-sibility.

For the personal lines broker, it maysimply begin with a client calling tosay she’s striking out on her own andleaving her engineering firm, and sheneeds “whatever coverage” engineersbuy. She’s been a good personal linesclient. How hard could it be to obtainthe coverage she needs? You’ve beenthinking about expanding your bro-kerage, and there’s no time like thepresent, right?

Or, for the commercial lines broker,it could begin with a large specialtyretail client that generates a sizeableamount of income for the brokerage.This client has just acquired a newsubsidiary company that presses metalto sell at its retail chain stores, some-thing completely different from therest of the insured’s operations. Youknow the company needs new cover-age, but you’ve never written a manu-facturing plant or operations. Do youdare tell your client that and let him

shop for the coverage elsewhere, ordo you branch out into an unfamiliarcoverage?

In both cases the brokerage can cer-tainly write the new business. Afterall, this is how brokerages expand, orat the least, this presents an opportu-nity to provide a valuable service to anexisting client. The important thing,however, is to do it right.

Here are some suggestions:1. Take your time. The timeline forwriting coverages in new areas can’t be“ y e s t e rd a y.” Yo u ’ re about to spendhours, if not days, researching andreading industry and policy literature.It may feel like a lot of work for thatcommission cheque ... and it probablywill be. It will feel satisfying to retainthe business you’re working on, butconsider that the real payoff can bethat next client for your new “niche.”

2. Know where to start. Assumingyou’ve identified a market already, theunderwriter can be a good resource.Ask for a copy of the coverage form

E&OIn the know


The Alberta Broker, February - March 2011 1 9

and become familiar with it ... and theexclusions. Develop a relationship andask a lot of questions.

3. Acquire the expertise. If you reallybelieve this new line of insurance isgoing to be the future of your broker-age, think about hiring a broker whospecializes in these risks. It may soundhard to justify at first, but the movecould very well pay for itself with newbusiness opportunities and the abilityfor the brokerage to service its existingcustomers more broadly.

4. Know when to quit. Be realisticabout whether your brokerage canservice this client’s new opportunity.Certain lines of business require anadditional commitment of supports t a ff that, along with larger off i c espace, can be a significant investment.If it’s not meant to be, refer it to a col-league, preferably someone you knowwho has this expertise and that youtrust. As hard as it is to refer business,you may be surprised to find that refer-rals of good quality customers general-

ly come back to you from those samecolleagues.

Brokerages grow by expanding intonew lines of business. If you’re movinginto unfamiliar territory, do so withyour eyes open ... and carefully. Getthe right information and use the rightresources where it makes sense. It isimportant to make sure all agency staffmembers, especially producers, under-stand the need to be cautious whenwriting an unfamiliar risk. Theyshould feel comfortable and beencouraged to come to managers forassistance in writing new accounts.You may not become an expert withthe first new policy you write, but atleast you can become qualified towrite it correctly. The real dangeris in the dabbling.

Swiss Re is proud to be the endorsedp rofessional liability provider for theInsurance Brokers Association of Alberta(IBAA). Insurance products underwrit-ten by Westport Insurance Corporation amember of the Swiss Re Gro u p .www.swissre.com/insurance

This article is intended only for educa-tional or illustrative purposes and shouldnot be construed to communicate legal orprofessional advice. You should consultlegal or other professionals with respect toany specific questions you may have.Further, the statements and/or opinionscontained are those only of the author anddo not constitute and should not be con-strued to constitute any statement, opin-ion or position of Swiss Re.

– how many were on your list and howmany have you kept?

10. Get organized – Resolve this yearto plan your days, reduce interrup-tions, clean off your desk, say “No”and make detailed lists.9. Volunteer and help others – Apopular, non-selfish New Year's resolu-tion, volunteerism can take manyforms such as spending time helpingout at your local library, mentoring achild or building a house to name afew.8. Learn something new – Peoplet h roughout the world are re a l i z i n gthat a strong resolve to lifelong learn-ing is more than just education andtraining beyond formal schooling.7. Find a better job – Many peopleresolve to find better jobs or to take anew approach to the jobs they'vealready got.6. Quit smoking – Becoming a non-smoker is probably one of the bestdecisions you can ever make, and is alife changing as well as a life savingdecision.5. Find my soul mate – Romance isalive and well as more and more peo-ple are looking for that special some-one.4. Enjoy more quality time withfamily and friends – More and morepeople are resolving to spend morequality time with family and friendsthis year.3. Debt reduction – One of the firstthings you have to do before any debtcan be eliminated is to stop usingcharge accounts.2. Stick to a budget –Developing andsticking to a realistic budget is a bril-liant offensive move as it preventsoverspending and ensures peace ofmind.1. Lose weight and get into betterphysical shape – With every year ofyour life, you have more to gain frombeing physically active; as your age-related risks of chronic diseasei n c rease, regular exercise generallyslows or reverses that trend.

Please continue to send me anyi n t e re s t ing news and no te s .([email protected])


by Steve Evanson, CAIBPYIB vice president

Much is expected

My wife and I just recently wel-comed our third child into our family.Recently, there have been many timeswhen I have been up with my newestdaughter in the middle of the night.When one goes through a life chang-ing event such as having a baby, youoften take stock of your life. This isalso more easily done at 3:00 a.m. ast h e re are no distractions. I havereflected on where I have been, whereI currently am and where I am going.

It is said that from those who havemuch, much is expected. I feelextremely lucky to be where I am andto be in the career that I have chosen.I have never had to worry about put-ting a roof over my head, food on thetable for my family. Unfort u n a t e l y,there are many people whose mainworries are providing the necessities oflife. Much is expected from those of uswho have much to help fill the need ofthose who don’t.

Lessons learned

A couple of years ago, I was drivingaround Lethbridge with my father-in-l a w, S tua rt . He is what I wou ldconsider the epitome of selflessness. Itwas early November, and a few daysprior we were hit with a snowstorm.Those of you who know what theweather is like in Lethbridge inNovember know that a snowstorm isusually shortly followed by a warmChinook wind, as was the case in thisinstance.

We were on one of the busiests t reets in Lethbridge when Stuartabruptly told me to stop and turnaround into a parking lot. He actuallyseemed quite startled by something.When we parked, Stuart jumped outof the car and ran to the intersection.When I finally got close enough to see

him, he was there helping an elderlylady who had fallen out of her wheel-chair trying to cross the street where abunch of half melted snow had accu-mulated over the past few days.

When we got back into the vehicleafter helping the lady, Stuart told methat she mentioned that she was strug-gling on her own for at least five min-utes before he had shown up to help

her. In that amount of time, it is safeto say upon quick calculation, thath u n d reds of vehicles would havepassed her.

The lesson that I learned that daywas that it is not our position to judgepeople who are in need in order to jus-tify not helping them. The only ques-tion that we should be asking our-selves is why we are unwilling to help


Young Broker’s Perspective Going theExtra Mile

(if that is the case). It is simple: ifthere is a need and we can help, weshould!

Going the extra mile

I recently read an article entitled,“The Habits of Going the ExtraMile.” Included within the art i c l ewere several accounts of people whowere habituated in doing more thanwhat was expected of them. Some ofthese people were Andrew Carnegie,Charl es M. Schwab, Frank W.Wo o l w o r th and Ralph Wa l d oEmerson, to name a few. The articlewas geared towards doing more inyour chosen field, which would int u rn speed you up the corporatel a d d e r. However this principle ofhabitually going the extra mile canmost definitely be used in pure service– an act which neither requires norexpects anything in return.

Over the years, I have been blessedto be involved with many associationswhose basis for existence is to provides e rvice to others. An associationwhich I am currently involved with,the PYIB, consistently volunteerstime to help out with local causes.Our reason for giving shouldn’t be toobtain rewards, however it has alwaysproven to be fulfilling.

I have noticed amongst my PYIBpeers that the opportunity to performcommunity service, to make a differ-ence, is very important to them.Those whose employers find ways toinspire, facilitate and enable commu-nity and charitable involvement seemto be happier with their workplaces. Iwould think that employee happinesstranslates into productivity and loyal-ty, so making giving a part of the cor-porate culture is not only the rightthing to do, it makes good businesssense, too.

As I am writing this, it is the holi-day season. People typically tend togive more of themselves during thistime of year. We need to get in thehabit of giving more and going theextra mile throughout the year. Ipromise – it is rewarding!


Paying it forwardIn lieu of holiday cards, theIBAA provided money to localcouncils to donate to theircharities of choice.

L to R. Derek Connick, IBAALethbridge local council chair;Darcie James Victim/Witness ServicesProgram Manager, LethbridgeRegional Police Service

them questions based on the propos-al. The panel’s questions will be from both client and underwritingperspectives. If unsuccessful, candi-dates are g iven two att empt s within a two-year period. If still unsuccessful, candidates must wait three years before a third attempt. The oral examination is graded on a pass/fail basis.

• The final written survey examina-tion (5 hours) is an open-book exam. Candidates are permitted to

use any relevant reference material they would consider appropriate for the survey, with the exception of the following restrictions: pre-printed forms, aids such as checklists and proforma surveys used by the candidate’sb rokerage in day-to-day business, and personal computers. The passing grade is 60%.

In addition to re f e rence materialcandidates may already use in theiroffices, the following resource materi-

als are recommended for the writtenexaminations:• CAIB 1-3• CIP courses (Insurance Institute of

Canada) • Glossary of Insurance Terms, by the

Insurance Brokers Association of Canada

Completion of the CCIB programmay be used as a prerequisite for entryinto the CPIB program.


Spring 2011 Education CalendarFor descriptions of these courses and registration, go to www.ibaa.ca. Note thenew webinar format. The Licensing and CAIB dates include the exam date.

Licensing Level 1 ImmersionFebruary 28 - March 5, Edmonton

April 4 - 9, CalgaryMay 2 - 7, Edmonton

May 30 - June 4, Calgary

Licensing Level 2 ImmersionMarch 29 - 31, Edmonton

April 18 - 20, CalgaryMay 25 - 27, Edmonton

June 13 - 15, Calgary

CAIB Immersion CAIB 4, March 21 - 26, Calgary

Customer Service for the Insurance Professional SeminarModule 1: The Role of the CSR,*8 CE credits, February 22, Edmonton

Module 2: Adding Value to Your Brokerage,*8 CE credits, February 23, EdmontonModule 3: Brokerage Operations, *8 CE credits, March 22, Edmonton

Module 4: Industry Issues, *8 CE credits, March 23, Edmonton

Social Media and Web Strategy,*2.5 CE credits - Calgary, February 9

- Edmonton, February 16- Red Deer, February 23

* Webinar* Insurance Needs of Home-Based Business Owners, *2 CE credits

- February 17, 9:30 - 11:40 a.m. MST

Succession Planning,*3 CE credits

- Edmonton, March 8 - Calgary, March 9

Ethics for the Insurance Professional,*3 CE credits - Calgary, March 16

E&O*3 CE credits - Edmonton, April 4

- Red Deer, April 5- Calgary, April 6

- Medicine Hat, April 7

Commercial Lines Hazards and Controls,*3.5 CE credits - Calgary, April 12

- Edmonton, April 14

Manufacturing: Products Liability andQuality Control Programs,*3.5 CE credits - Calgary, April 12

- Edmonton, April 14

Fidelity Crime - Lunch ‘n’ Learn Seminar,1.5 CE credits - Edmonton, April 20

- Calgary, April 21

Dealing with Complex Issues: Technology,*1.5 CE credits - Edmonton, June 7

- Calgary, June 8

Seminars

The essay exam and short-answer questionnaire will

include any of the followingproperty and casualtyinsurance subjects and

any relevant endorsements:

Property• Habitational• Farm• Commercial

Liability• Personal Liability• Personal Umbrella• Farm Liability• CGL• Umbrella Policies• Garage Liability• Professional Liability• Directors & Officers• Wrap-up• Non-Owned Auto

Business Interruption

Surety

Crime

Boiler and Machinery

Automobile• Personal Auto• Commercial Auto• Garage Auto

Marine

Aviation

Basic Risk Management

CCIB Exam Subjects

In the Patrick J. Long case, a recentTax Court of Canada decision, theemployee worked as a mechanic for acar dealership. Mr. Long did notrequire a car to perform his employ-ment duties and to get to work, hewould drive, carpool or take publictransit. When he did drive to work,which was on occasion, he would parkin a lot beside the dealership. Due toa payroll audit of his employer, hewas reassessed a taxable benefit foremployer-provided parking. Mr. Longargued that he had never discussedthe use of the parking lot with hisemployer, he never expected or askedfor parking to be available as part of hisemployment and he would havedeclined the parking if he knew it wasp a rt of his remuneration package.Based on the evidence, the lot was usedby unknown non-employees as well asemployees. For the years in question,parking spots were not assigned toemployees and the lot was used moreon a scramble parking basis, and therewas no persuasive evidence as to theactual value of the parking. The courtconcluded that Mr. Long was in no bet-ter position of finding a parking spotthan the unknown non-employees andthat the benefit was not taxable in thiscase.

In the Toronto Parking Authority case,another recent Tax Court of Canadadecision, the findings were not infavour of the taxpayer. In this case, theemployee was a parking attendant whowas provided with free parking wherehe worked. The court concluded thatthere was no requirement for atten-dants to have vehicles to perform theiremployment duties and parking spaceswere available in most cases, so scram-ble parking was not a valid argument.As a result, it was found that employees“had the right or privilege to park atthe lots free of charge except on therare occasion when the lot was full.”The court decided that the employeeswere the primary beneficiaries of theparking benefits in this case and thebenefits were taxable.

The decisions in these cases demon-strate that whether or not a parkingbenefit is considered a taxable employ-ment benefit can vary depending on

the specific facts. This is also the casefor other employment benefits, asemployee-employer situations can varygreatly.

The CRA has provided administra-t i v e p o l i c i e s o n m an y o t h e remployment-related benefits includinggifts, awards, work-related socialevents, employer-paid tuition fees andscholarships, and numerous others.Although these policies are not law,they provide guidance on determiningif benefits are taxable. For details, visitthe CRA’s website at www. c r a -a r c . g c . c a / t x / b s n s s /tpcs/pyrll/bnfts/menu-eng.html.

W h e re it is determined that anemployment benefit is taxable, theemployer must also determine whetheror not the benefit i s sub ject towithholdings for Canada Pension Plancontributions and EmploymentInsurance premiums. In addition, thevalue of certain taxable benefits mustinclude GST/HST/QST. The CRA hasp rovided guidance on withholdingsand GST/HS T on it s website atw w w. c r a - a rc . g c . c a / t x / b s n s s / t p c s /pyrll/bnfts/bnchrt-eng.html.

Another point to consider whendetermining if a benefit is taxable ornot, is whether an employee is also ashareholder of the corporate employer.This was mentioned earlier as a consid-eration when private health serviceplan premiums were discussed, and itshould be considered for other benefitsas well.


“”

To be treated as anemployee benefit, it

is important todemonstrate that thebenefit was re c e i v e d

by virtue of emloymentand not by virt u eof share h o l d i n g s .



A corporate employer pays tax onearnings distributed to shareholders asa dividend. Advantages can arisewhere the corporation can use thesefunds to provide an employee-share-holder with benefits more efficientlyfrom a tax perspective. If the provisionof a benefit is deductible to the corpo-ration and is not taxable to theemployee personally in whole or inpart, the tax treatment may be benefi-cial. However, if the benefit is receivedby an employee-shareholder, the bene-fit may be fully taxable.

In some cases, the benefit could betaxed as a shareholder benefit. Whenthe shareholder benefit rules apply, theamount added to the share h o l d e r’sincome is the value of the benefit pro-vided; there are no rules similar to theemployment income rules that allowcertain benefits to be received tax-free.To be treated as an employee benefit, itis important to demonstrate that thebenefit was received by virtue ofemployment and not by virtue ofshareholdings. This can be done byshowing that non-shareholders in theorganization received the same bene-fit, or that it is common for employersto provide similar benefits to non-shareholder employees who generallyhave the same job function. Even ifthe benefit is treated as an employ-ment benefit, it is important to notethat CRA administrative policiesallowing for certain employee benefitsto be treated as non-taxable may notapply to non-arm’s length employees,such as shareholders or people relatedto them. For example, gifts and awardsgiven by closely held corporations totheir shareholders or related personsare considered a taxable employmentbenefit. There f o re, owner- m a n a g e dbusinesses need to be mindful of theseconsiderations when pro v i d i n gemployment benefits.

You should consult with your professionaladvisor regarding employee benefits. BobMcColl, CA, is a partner with BDOCanada LLP whose practice focuses onp roviding services to owner- m a n a g e rbusinesses. Bob can be reached at (780)461-8000.

Continued from Page 27...

ly need to be covered from your ownre s o u rces. When considering legalfees, title insurance and inspectionfees, closing costs for buyers canamount to between 2% and 3% of thehouse price. Most lenders require buy-ers to show evidence of their ability tocover closing costs and the down pay-ment as part of the mortgage approvalprocess.

Saving for the down payment andclosing costs can be challenging inyour younger years, but saving anyamount early and regularly can be ofgreat benefit. While there are mort-gages available in the marketplacewith as little as a 5% down paymentrequired, at today ’s rates each dollar ofa down payment saves almost a dollarof interest expense over the course of a25 year mortgage. To help you save,most financial institutions can set up acontinuous savings plan whereby regu-lar deductions can be made from yourbanking account into some savingsinstrument. Even funds in a RRSP canbe used towards a down payment or

closing costs for qualifying first timebuyers. Provided certain parametersare met, a first-time buyer can with-draw up to $20,000 and a couple, ifboth withdrawing their maximum,could withdraw $40,000. While thesefunds do have to be repaid back intothe RRSP within 15 years commenc-ing two years after the withdrawal, nointerest has to be paid on these funds.

I have only touched on a few aspectsof buying your first home and there ismuch more to learn. For starters youcan listen to a series of podcasts on thesubject at bmo.com. Ultimately youshould consult with a financial plan-ner and mortgage expert to see howhome ownership might look for youthis spring.


What the world needs nowis more love and less paperwork.

– Pearl Bailey

This can be traumatic. While out-of-court settlements are confidential, it isoften clear that a plaintiff has receivedcompensation. How would any of usfeel if an external party fessed up toand paid out for something we didn’tthink was negligent?

I can recall a lawsuit in the late1980s. I was the risk manager for a for-est products company, and a plaintiffin New York state alleged that a pieceof lumber manufactured by our compa-ny used for scaffolding broke when theplaintiff stepped on it. In fact, plain-tiff’s counsel had put the nine forestproducts companies who each suppliedlumber to Home Depot on notice.Plaintiff’s counsel had not determinedwhich company manufactured thel u m b e r. Our insurer defended theaction and paid for one of our seniorvice-presidents to attend proceedingsin New York. It wasn’t our lumber. Thecost to the insurer in 1989 – $60,000US. Not surprisingly, our renewal pre-mium went up.

Policyholders should be educated onthe right and the duty to defend, sincethere is an upside and a downside tothis aspect of coverage. Some clientsmay have a preference for a particularlaw firm or lawyer who is already famil-iar with the insured organization. Thiscan be written into the policy so thatthere is a mutually agreed list of legalfirms that are satisfactory to the insur-er and the insured.

Policyholders should always forwarda copy of legal pleadings to their brokeror insure r, so that the insurer caninvolve itself early in the defence of acase, if it appears that coverage applies.Nothing is more frustrating for aninsurer than to receive late notice andto have to re-strategize a response aftercounsel for the insured has alreadyspent considerable time on the file.

Brokers should understand the dif-ferences in the insuring agreements ofvarious policies since each policy has adifferent spin on who gets paid and inwhat circumstances:

1) Property policies generally “pay the insured” upon the happening of a covered event.

2) Commercial general liability poli-cies generally state that the insurer has a “right and duty to defend”claims for compensatory damages covered by the policy.

3) Directors’ and officers’ liability poli-cies generally “pay on behalf of the i n s u red organization, indemnity paid to insured persons” (i.e., dir-ectors or officers have to pay their own legal bill and then wait for reimbursement).

Anybody can sue anyone for any-thing. Insurers provide a vital role indefending many actions.

Whatever...

Karen MacWilliam is an insurance and riskmanagement consultant. She can be reached [email protected].



by Patricia Katz

Reflection:Have you ever wondered if tapping

into the why of what we do makes adifference? Here's a study that suggestsit does.

R e s e a rcher Adam Grant, at theUniversity of North Carolina, put thethesis to the test. He divided employ-ees at a university fund-raising callcentre (charged with raising funds forstudent scholarships) into thre egroups.

Group 1 read stories written by pre-vious employees about the personalbenefits of the call centre job inadvancing their own skills and knowl-edge. The stories also touched on howindividuals had leveraged what they’dlearned to their advantage in their owncareers and grad school (the personalbenefit group).

G roup 2 read stories written byscholarship recipients about how thefunding they received as a result of thecampaign had given these studentsbetter access to education. The storiesdescribed how the gift had connectedthem to fellow scholarship students,and helped them engage in importantextracurricular activities (the task sig-nificance group).

G roup 3 simply continued doingtheir job as before – no stories at all(the control group).

What happened? Over the nextmonth of solicitations, callers in groups1 (personal benefit) and group 3 (con-trol) brought in the same number ofpledges and raised the same amount ofmoney as they had before the interven-tion.

However, members of group 2 (tasksignificance group), who were con-

nected via story to the impact of thecampaign on the lives of others,brought in more than twice the num-ber of pledges and more than twice theamount of weekly donations.

Action:The study results suggest that con-

necting people to purpose has a signif-icant impact on performance. That’s auseful principle to keep in mind forourselves – and for those around us.One way to get better at what we do isto connect the dots between the every-day whats and the big picture whys.

Think about some of the stories andexperiences that you could share to putthis principle to work in your commu-nity groups and workplace teams.

From the e-zine, PAUSE. Copyright 2010Patricia Katz, Optimus Consulting, 877-728-5289 or www.patkatz.com.

Purpose = Re$ult$

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cdn.ymaws.com · sport, “I don’t care if it’s your kid’s team, whatever. If you need the time, you’ve got it,” says Jim. Amongst the staff of five, Jim and Caleb coach