1. September 20031 Case Study 4 The risk management challenges for Wahoo and its new commercial development center

2. LISCLISC September 2003 2 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.

3. LISCLISC September 2003 3 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.

4. LISCLISC September 2003 4 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.slideshow Complementary learning resources: "The Options of Property Management" courtesy of CHAM, 1996 (pdf)The Options of Property Management

5. LISCLISC September 2003 5 Introduction There are four segments to the case study: description Q & A analysis insurance placement challenges

6. LISCLISC September 2003 6 Major Concerns Liability and Safety Values at risk Surprises, unintended financial costs

7. LISCLISC September 2003 7 Layout of the property fire dept access street dumpster hydrant vacantlaw break-in vacant bldg. alley fence dry cleaning drive-through beauty shop school kitchen food pantry fire division wall dental clinic awnings sign vehicle barriers On-site mgmt

8. LISCLISC September 2003 8 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? risk managementinsurance evaluationoperation of the CDCinsurancebonded

9. LISCLISC September 2003 9 Q 2: Crime What protective measures might the CDC consider...protective measures 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?

10. LISCLISC September 2003 10 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?coverages

11. LISCLISC September 2003 11 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?

12. LISCLISC September 2003 12 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?transfer the risk of loss b. written work agreements with insurance stipulations, such as carrying liability and workers compensation insurance?liability and workers compensation c. additional insured and certificate requirements? endorsements?additional insured certificate

13. LISCLISC September 2003 13 Insurance Placement Working with carriers and agents See answers to case 4…click on “insurance placement”insurance placement

14. LISCLISC September 2003 14 Conclusion Important segments of the site: Classroom Leaders Guide Coverage Guide Risk Management Guide Agency/Client Interview Other Resources including documents & forms Other Resourcesdocuments & forms Glossary