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Case Study 4

The risk management challenges for Wahoo and its new

commercial development center

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CASE STUDY 4

This case study focuses on commercial development projects and the insurance needs and potential exposures of CDC's as landlord and property manager.

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Objectives

Upon completion of this training module, the student should be able to:

Explain the impact of owning and operating a commercial center on the CDC's financial goals, human resources decisions, and their general operations. Apply insurance program and risk management strategies to their organization - actively engage themselves in the risk management process, including claim management and cost analysis concepts. Understand the CDC's insurance and risk management responsibilities as they relate to their commercial property tenants.

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Support for training:

This slideshow provides visual support for learning these concepts and strategies. It contains links to the website to provide ease of use, and to enhance the learning experience.

Complementary learning resources: "The Options of Property Management" courtesy of

CHAM, 1996 (pdf)

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Introduction

There are four segments to the case study:

description

Q & A

analysis

insurance placement challenges

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Major Concerns

Liability and Safety

Values at risk

Surprises, unintended financial costs

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Layout of the property fire dept access

street

dumpster

hydrant

vacantlaw

break-invacantbldg.

alley

fence

dry cleaning

drive-through

beautyshop

school

kitchen

food pantry

fire division wall

dentalclinic

awnings

sign

vehicle barriers

On-site mgmt

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Q 1: Owner/property manager

How does taking on the management of this project impact the CDC?

What risk management strategies can counterbalance or moderate the increased cost of insurance

a. What are the risk management and insurance evaluation steps?b. What insurance should be in place for the operation of the CDC?c. What insurance should be in place for the "project" side, using their employees to manage the property, and selected outside contractors to perform maintenance, pest control, and janitorial services? Should they be bonded?

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Q 2: Crime

What protective measures might the CDC consider...

a. To minimize the crime exposures at their site?

b. What about the values at the workforce development center - computers, monitors, printers - these attract criminals, right? What effect would nighttime activities at the proposed youth development center cause?

c. To insure the loss of rental income should a tenant have a vandalism or arson fire loss and cease rental payments until the building is restored?

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Q 3: Directors & Officers/ EPLI

Now that irregularities have surfaced, a. What exposure does the CDC board face?

b. What insurance coverages would apply to potential claims against the board for money damages?

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Q 4: Use of Volunteers

In the evenings, the charter school's space is used by the CDC to host discussion groups of local business and home owners. The CDC would coordinate these efforts.

a. What additional risks would this type of activity pose? b. How is damage to the tenants' space covered on behalf of the CDC?

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Q 5: Property Management…

What precautions should be considered by the CDC, prior to beginning this project?

a. should the CDC transfer the risk of loss? b. written work agreements with insurance stipulations, such as carrying liability and workers compensation insurance? c. additional insured and certificate requirements? endorsements?

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Insurance Placement

Working with carriers and agents

See answers to case 4…click on “insurance placement”

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Conclusion

Important segments of the site: Classroom Leaders Guide Coverage Guide Risk Management Guide Agency/Client Interview Other Resources including documents & forms Glossary