Hardy, Pettit and Patel

o/a Professional Business Consulting Services

Tom Hardy was downsized from a lucrative management position in a large Toronto corporation as part of their restructuring in 2020. Tired of the big city, he moved with his wife and two children to London in 2021 so his son could attend the Culinary Management program at Fanshawe College.

Tom purchased a large century home on Dufferin Street in downtown London and used most of his severance package to remodel. The home, originally built in 1892, is a two storey, solid brick structure with a partial basement and a full attic. The former owner replaced the roof with steel sheeting in 2014 and the hydro service was updated in 2018 to a 200 amp service, removing all of the knob and tube wiring in the process. At some point the old hot water coal furnace was removed and a forced air gas system was installed, including all of the duct work.

Tom exchanged the old gas furnace with a new high efficiency one and added air conditioning. He changed the main floor into office space and in doing so removed the last of the cast iron plumbing and replaced it with PVC, adding two new bathrooms. He had the second floor renovated into a two bedroom apartment and the attic into a studio apartment. There is a law office in the building next door and a four-plex on the other side.The neighbourhood is a mix of business and residential buildings.

When finished with the renovations Tom started his own management consulting firm. Hardy Consulting was relatively successful but Tom felt there was more growth potential if he could offer small business owners more related services. During the next year he set up a cluster, first with Darlene Pettit, a financial advisor, to assist with funding and life and health insurance needs and later added the services of Rahul Patel, a chartered accountant. Late last year the three people formed a partnership; Hardy, Pettit and Patel and are operating as Professional Business Consulting Services. Now their clientele consist mostly of small business owners to which they offer a variety of management and financial advice and services.

The partnership employs a receptionist and two full time accountants. They also take on a co-op student from Fanshawe College every year. During tax season Rahul may hire more accountants, usually on a contract basis. The partnership generated revenue of $1,336,000 last year. Since the three partners were independent prior to that there are no other revenue figures.

The total value of the Office Contents is established at $165,000. The photocopier is leased from IBM and they have requested to be added as a loss payee on the property insurance policy.

Tom also has an outstanding mortgage on the property with the Royal Bank. He and his wife Marion own the building jointly as the two sole shareholders of 457923 Ontario Limited. One of the accountants rents the two bedroom apartment upstairs. The studio apartment is rented to a graduate student from Western.The numbered company receives $3,130.00 per month rent from the consulting business on the main floor, $1850 a month for the 2 bedroom apartment and $950 per month for the studio. They have leases with all three tenants. The owners are responsible for all exterior maintenance, for which they have contracted a landscaping company, including the seven space parking lot in the rear yard of the dwelling.

The estimated replacement value of the building after renovation is $1,435,000.00. The only claim on record is a sewer backup loss in 2016. A total of $12,037.00 was paid out. The basement remains unfinished but is used to store old files.

QUESTIONS:

Hardy, Pettit and Patel

o/a Professional Business Consulting Services

You have been approached by the insured for a quote on Commercial Property Insurance. You will begin by analyzing the risk, completing a proposal for insurance and issuing a binder. Be sure to document all information known about the risk, what questions you need answered, and the process you will use to ensure a successful sale.

1. You have set up a meeting with the client in order to assess the risk and qualify the client. a. Why would you insist on meeting with the client in person at their business location? b. Identify physical and moral hazards associated with this risk. c. What loss control / prevention recommendations would you make? What further questions would you have about this risk?

2. Using the application form provided to your group, complete the application according the information obtained from the insured.

a. Make a list of the questions you would like to have answered by your client when you next visit this property.

3. Complete a binder of insurance to give to the insured upon completion of the application to demonstrate coverage bound until the policy is issued.

4. Your supervisor has asked you to justify your pursuit of this risk. Do you feel you have enough information from the insured to complete this assessment? Do you have any concerns not already addressed above?