Different Days

When the staff at BBCG Claim Services Ltd. arrive at work every morning, they have no idea what they are going to be building or where they will be building it.

Handling bond claims means that no two days — or two projects — are the same.

BBCG specializes in both fidelity and construction bonds. The two have basically the same premise — to guarantee performance.

A fidelity bond guarantees the performance of an employee to an employer. If there is employee theft or fraud, the employer is able to make a claim under the bond. BBCG is retained in this instance to investigate and validate the claim and subsequently make recoveries from the employee or others involved.

A construction bond can be split into two categories: performance and labour material payment. The former guarantees that the contractor who is bonded will finish the contract, while the latter guarantees the contractor’s contract creditors will be paid. In the event of a default the adjusters at BBCG will have to find a contractor to finish building the project — which could be anything from a high rise to a golf course to a sewage plant, and anywhere in the world.

Been around the world

When a contractor fails, he usually has a number of jobs on the go. In one instance, BBCG handled a case where when the contractor defaulted he had 104 construction projects in four countries: Canada, the United States, Iceland and Egypt. A total of 60 of these needed to be completed — and every one of them had come to a complete stop. With only eight adjusters, the goal of completion should seem daunting — but for the adjusters at BBCG this challenge proved motivational. For six months, the staff worked seven days a week, 15 hours a day to ensure that all 60 projects were completed and the losses kept to a minimum. “This is the strength of the company here — the teamwork,” says Ted Baker, cofounder of BBCG.

“In our company’s history, we’ve had projects in every province and every territory,” Baker says. “We’ve built things from fishing boats to submarines, radar installations in the Arctic to high schools. You name it, we’ve built it.”

With respect to fidelity claims, the company averages a new claim every single day of the year, somewhere in Canada. The average loss has risen exponentially to roughly half a million dollars — in all types of industries. There are the one-offs, of course, the big shock losses than can reach $500 million. Baker surmises that BBCG adjusts the majority of the fidelity and surety claims farmed out to adjusters in Canada.

The founding fathers

This niche market is something the four founders of the firm — Baker, Luc Bertrand, Edouard Chass and Arthur Goguen — are extremely proud of. Together for 25 years as co-workers– “longer than most marriages,” Baker jokes — and running a firm together for the last 13 years, the adjusters still love working with each other.

The company was launched in 1997 by the four founding partners. Since that time, the “old farts” as Baker calls them, have been joined by some younger adjusters as a means to pass on the legacy. “We have some excellent younger people who have developed the same skill sets and are learning from us old guys,” Baker says. “This puts our company in a great position going forward, because we’ve got the strength of the people that have built it, followed by a much younger group.”

In fact, the bond is so strong that there is no turnover. “Once you’re in here doing this work, you can’t get out,” Baker says. “They don’t want to go, because it’s fun. It allows for a great deal of ingenuity and original thought.”

BBCG has three offices: the head office in Mississauga, Ont. and two satellite offices in Burnaby, B.C. and Laval, Que. The four founding partners are based out of Mississauga, along with Trevor Grzybowski, adjuster, the company’s forensic and general accountant, Bill Foster, and support staff, Rosemary Cordina and Anna Pietrantonio. In Laval, Michel Prud’homme and Luc-Andr Girard are both adjusters, with Maria Stott serving as support staff. In Burnaby, Jamie O’Connor is a chartered accountant and adjuster and Sonya Polowy is the office’s support staff. This office could use a second adjuster, Baker says.

Training and tracking

The reason that clients continue to hire BBCG is because the adjusters have handled so many claims — they have the experience and the know-how to work through a claim and problem solve through the issues. “We work together as a team on a lot of our files,” Baker says. “We are able to pass the work among us and the client can expect the same level of expertise at a consistent level.”

And in order to keep up their level of expertise, the adjusters at BBCG are routinely travelling to other countries to take courses, which are tailored to the business of bond claims. “It’s expensive, but education for us is key,” Baker says. Unfortunately, there are no available courses closer to home. In an effort to fill this void, Baker and the other adjusters provide seminars to others within the insurance industry.

To further benefit the industry, BBCG, because they have access to the information, keep, on an anonymous basis, statistics on fidelity claims and the various types of claims being filed. Information including what type of industry is seeing a loss, how long the fraud was going on before being discovered, how much was lost, how the loss was discovered, and so forth. Through this data, BBCG has noticed a trend: More than 20 per cent of all the insureds reporting a claim are under-insured — a trend of utmost importance to insurance buyers and brokers.

Other avenues

Another area of practice is BBCG’S trade credit group who have been handling buyer defaults from around the world since BBCG was formed. Although a trade credit policy is very different from a surety or fidelity bond, the required adjusting skill sets are similar and complimentary. This group has experienced a spike in business following the 2008 financial meltdown. As expected both domestic and foreign insolvency claims went through the roof. In addition to the regular volume of trade credit claims BBCG has been helping clients deal with their significant overflow of claims normally handled in-house. Baker notes “the industry appreciates the available expertise we can apply at a moment’s notice”.

Also applying the same skill set, BBCG investigates and adjusts a variety of E&O and D&O claims across the country.

BBCG is also anticipating an increase in the volume of construction claims as the government infrastructure money comes to an end. Businesses that did not have to compete for work before will have to going forward, resulting in a higher incident of claims. “When the surety industry experiences this type of recession, it’s all or nothing,” Baker says. “It affects everybody the same, so we can expect an increase in volume.”

Going forward

But as long as the adjusters at BBCG can find time to communicate with one another — the biggest challenge in a company where a workday can be 15 hours — they can get through anything. Most of them have a stake in the success of the company as they are shareholders — each one of them a partner in the company. “It makes us a happier clan,” Baker says. “It is also very useful for making us pay attention to the bottom line. When you have a stake in your business, you perform. A sense of ownership equates to a sense of pride in your business.

“We are all hard workers and we are all very proud of our work and that’s what sells us to the client.”