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
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