Risk & Business Magazine JGS Insurance Magazine - Summer 2019 | Page 3

LETTER FROM THE PRESIDENT Welcome! LETTER FROM THE PRESIDENT I had a very nice “Welcome Message” all prepared for the summer edition. This time of year, of course, I would have addressed the upcoming Hurricane Season predictions: a slightly below average 13 Named Tropical Storms, 5 of which will be classified severe, or hurricanes (thanks to a weak El Nino). However, after watching the news footage of the Notre- Dame Cathedral in Paris burn this week, I felt compelled to change my message. I have been fortunate to have visited Notre- Dame a few times, most recently last year with my family. My teenage children were amazed at the architecture, hand-carved stonework, statutes, artwork, and most especially, the famed stained-glass windows. They (and I) were amazed that such a structure was built over 800 years ago and was still standing today largely intact. We were all saddened as we watched the videos of the church burning and the collapse of the Spire into the building. In the aftermath of such an event, it is great to see such an outpouring of generosity. Various Photo credit: Vinnie Hager organizations (and billionaires) have pledged up to a billion dollars to date to help rebuild. Early estimates for the cost of rebuilding the cathedral run as high as $8 billion. President Macron has promised to rebuild in 5 years, however a full restoration will more likely take a full 20 years. The cost of reconstruction is astronomical due to trying to replicate what was destroyed using modern materials. Much of the old trades will have to be relearned such as the intricate stone mason work that was mostly hand carved. The roof’s wooden beams cannot be remade because “we don’t, at the moment, have trees on our territory of the size that were cut in the 13th century.” New materials will need to be used that replicate the old craftsmanship, provide modern standards of safety, and strengthen the structure. As you may have read by now, there was no insurance in place to rebuild the Cathedral. The building (as are all religious buildings erected in France prior to 1905) are owned by the French State. Whatever funds are raised by donations will offset the State’s cost. There are some insurance policies in place that may respond. So far, two of the contractors who have been identified as working on the restoration of the building were shown to be insured by French insurer AXA (AXA has pledged to donate $10 million apart from any policy limits that may come into play). If the contractors are found liable, then these policies will only cover tens of millions of dollars against the $8 billion estimated. Most of the famous artworks in the building are typically uninsurable since they are priceless. The artwork and historic artifacts on loan to the Cathedral were insured by the institutions that loaned them. Some were completely destroyed, but others will take years to restore and millions of dollars to complete. Luckily, it has been reported that 90% of the priceless relics and art within Notre-Dame were saved. France knows they are self insuring these buildings and priceless works of art. They had a contingency evacuation plan that included putting priorities on artifacts to be removed (the crown of thorns), and it worked remarkably well! Considering the intense fire and length of time it took to put out, in addition to all the water and smoke damage, things would have been far more severe without risk management planning and continuous monitoring and adjusting along the way. So they were prepared. The world is a better place today as a result of these actions It is events like these that show we should all take a step back and reflect on how such a devastating loss could affect our businesses or homes. Do we have in place contingency plans to minimize the loss of life and property? Are evacuations plans in place and do our folks know them? Are they rehearsed and reviewed so changes can be made? Do we take the time to review with our “trusted adviser” in insurance what a disaster plan looks like, and will our policies respond adequately to make us whole again? Insurance can be a difficult landscape to traverse. We understand that it can take up a lot of time initially to be set up properly to respond to losses big and small. However, once you have explored in depth what your exposures are and what risk tolerance level is acceptable (self-insured, deductibles, etc.), then you should be able to monitor and update your insurance plan annually to keep in line with your growth. It is imperatively important to keep your adviser up to date on any changes so that adjustments can be made along the way. By taking such steps, you should be able to recover from a disaster and sleep better at night! + Vinnie Hager, President JGS Insurance est. 1919 JGSINSURANCE.COM 3