Finance Monthly April 2020 Edition

What is insurance and why do we need it? Since the beginning of time, humankind has been vulnerable by nature and in need of protection against the harms of the unforeseeable future. No one has been able to predict these harms, but we have always been able to protect against them. Insurance is essentially a handshake or peace treaty between a sound, serene mind and a world of tumultuous chaos and unpredictable risk. That handshake or peace treaty has taken many forms throughout time. A nation’s government, for example, will pay billions of dollars to employ a large-scale military acting as a deterrent against an attack by its hostile adversaries, thus allowing its citizens to sleep peacefully through the night. Large information companies have provided the means for cutting-edge, anti-virus products to gain security against threats of malware attacks or data breach, thereby providing a safe-guard for sensitive material. Important figures threatened by criminal organisations willing to release damaging information may offer large sums of money in exchange for the ownership or destruction of the material, consequently keeping their reputation safe. Where money is being exchanged for security which serves as protection against the threat of some future risk or loss, you’re dealing with insurance. At Fairbanks Insurance Brokers, we exist to help protect construction companies facing such risks as unexpected property damage, accidental defects, third-party lawsuits, etc. These risks could result in large out-of-pocket sums that may put a contractor out of business and risk his family’s livelihood. Our main purpose as an ethical insurance company is to create a psychological fortress housing and caring for the mental peace-of-mind of our clients and their families in a worry-free, stress-free environment. What is ethical insurance and why is it important? As we all may know, the insurance industry is a sector of the financial industry. It is an industry of other people’s money in which other people are willing to pay large sums of money to secure the peace of mind in which I just mentioned. As licensed insurance producers, we are given access to a large portion of our client’s money, making us part-time caretakers of their money and the most trusted ones to put their best interest first especially before our own. Unfortunately, where we have access to large sums of other people’s money, we also have an opportunity for greed, dishonesty, and theft which can lead to unethical insurance behaviour and habits. This is precisely where it matters most for insurance producers to exercise their indisputable duty to follow the code of ethics mandated by the Department of Insurance. Without an unwavering commitment to these codes which serve as the cornerstone of our industry’s foundation, it will become gravely compromised and fall short in its purpose to protect the vulnerability of construction workers. For those insurance producers who do exercise their duty to the prescribed code of ethics, they are practising what I call ethical insurance. Ethical insurance is the application of honesty, integrity and discipline to everyday insurance business operations. It is the customary procedure or way of practising insurance which necessitates the discipline to say “no” regardless of how tempting a private reward may be. Our indestructible commitment to the integrity of our work must begin with the very first business decision and end no sooner than the last. Just as weeds grow inseparably from the farmer’s valued crops and become difficult to separate, so do bad habits intertwine with the good ones and the valued crops are tossed with the weeds, just as the broker’s good habits may be tossed with his bad habits in the revocation of his license. This is why ethical insurance practice must be a daily, conscious choice where we aim for 100% execution and pray to fall close to it. What do unethical insurance practices look like? In my view, unethical insurance practices look similar to what happens in the following dynamic between a teenager, his naive parent and a drug dealer. The teenager goes to his naive parent seeking money for school books. The naive parent gives the teenager money conditionally, requesting a receipt of confirmation for his purchase. The teenager uses his parent’s money for drugs instead and chooses a drug dealer willing to provide false receipts so he doesn’t get caught. The drug dealer celebrates his sale, the teenager gets a temporary high, and the naive parent suffers betrayal from both of them and unspeakable pain if the teenager’s life is taken by a bad accident. Similar to the insurance industry, the prospective client (the teenager) goes to the job owner seeking to be awarded a project. The job owner (the naive parent) will do so provided the insurance requirements are 13 www.finance-monthly.com FRONT COVER FEATURE - ETHICAL INSURANCE