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Managing Risky Business: Q1 2023

Managing Risky Business: Q1 2023

In this issue of Managing Risky Business, read about:

Tenant-Caused Fires: An Area of Concern in 2022-23

The 2022-23 term to date has been marked by a significant spike in claims and claims costs: 68 claims with a total of $15.2M incurred. It is all but certain that the $20M Claims Trust Fund will be exhausted before the end of the term and underwriters will cover the costs. This will make negotiations on renewals much more difficult than in years past.

Tenant-Related Fire Claims in Current Term:
Number of claims: 29 (43% of 2022-23 total)
Total Incurred: $8.3M
Tenants Insured: 1

The 2022-23 term to date has been marked by a significant spike in claims and claims costs: 68 claims with a total of $15.2M incurred. It is all but certain that the $22.5M Claims Trust Fund will be exhausted before the end of the term and underwriters will cover the costs. This will make negotiations on renewals much more difficult than in years past.

A particular cause for concern is fires caused by human negligence or intention. More than half the total number of claims to date (29) are the result of this. And in only 1 case was the tenant insured. This adds to the financial impact on the program because recovering property damage costs due to tenant negligence is highly unlikely.

HSC recognizes that many in our group are charged with housing highly vulnerable members of our communities – and that this makes managing tenant-related risk challenging. We also recognize that funding and resourcing issues also present difficulties. While we don’t expect the advice here to provide all the answers, we do believe that it can help. It can also serve as the basis for recommendations to your boards and local councils. 

HSC is also taking action by the following steps:

  • Meeting with providers that have particularly difficult claims histories to identify opportunities for improvement
  • Creating practical resources and putting on webinars for all housing providers
  • Working with HSC’s Insurance Reference Group and Stream B providers to share insights and uncover best practices
  • Sharing claims data via its Service Manager and LHC dashboards
  • Engaging Service Managers on identifying ways that they can support area providers to mitigate risks

In this special issue of Managing Risky Business, we will focus the top three causes of tenant-related fire claims and offer tips on how to prevent or mitigate them.

Tenant Communications: A Crucial Starting Point

One of the best ways to help mitigate risk is by communicating directly with the people that are living in your buildings – on things like kitchen safety, smoking cessation programs, tenant insurance, proper use of candles and more. There are many ways to reach tenants including:

  • Newsletters
  • Websites
  • Brochures/information sheets in the rental office, bulletin boards
  • Notices in mailboxes or under the door
  • Information booths/displays at community events and in common areas; inviting your local fire department to attend events or give talks
  • In-person visits and meetings

Timing can also be an important factor in heightening the impact of your communications. For example:

  • Holidays provide an opportunity to communicate about kitchen fire safety; if you have information on your tenant demographics, you can tailor your communications based on other cultural holidays celebrated by your tenants
  • Translating your communications to various languages spoken by tenants in your buildings can also increase the likelihood of the materials being read and understood
  • After disruptive claims incidents occur, residents are more receptive to the idea of getting tenant insurance  
  • During campaigns sponsored by public interest groups that offer resources, such as Weedless Wednesday (part of National Non-Smoking Week, in the third week of January), Fire Prevention Week (in mid-October)

You will note that tenant communications form the basis for many of the recommendations and tools that follow. TCHC has created a helpful safety guide for its residents, available here.

Combatting Careless Smoking: It’s Not Just About Building Policy

While the answer to mitigating the risk of careless smoking fires may seem obvious – make your building smoke-free – it should be considered in tandem with other strategies. That’s because it can take a long time to fully implement a smoke-free policy and full compliance may be difficult. To prevent careless smoking fires, consider the following:

  • Provide adequate receptacles outside the building for smokers at least 9 metres from the building
  • Check smoke alarms and unit door self-closing devices (if applicable) for proper operation during unit inspections (including non-routine maintenance calls) and noting the fire safety of units where smokers live (clutter, flammable materials)
  • Mandatory tenant insurance to offset costs of smoking-related insurance claims

Tenant Education/ Awareness of Smoking / Vaping Safety

Use tenant communications and signage to:

  • Encourage use of non-contraband cigarettes due to their self-extinguishing features
  • Prohibit the disposal of cigarette butts thrown from balconies or into gardens, flowerpots, mulch or soil
  • Strongly discourage smoking in bed or when intoxicated, drowsy or under medication
  • Emphasize that cigarettes should never be left unattended
  • Remind tenants to keep cigarettes, lighters, matches and other smoking materials up high out of the reach of children
  • Raise awareness of fire and explosion risk of e-cigarettes. While fires from e-cigarettes are comparatively rare, their lithium-ion batteries can spark or explode. Tenants should ensure batteries are not overcharged; are kept in a case so they do not come into contact with other metal objects; and e-cigarettes are not left unattended while charging

Raise awareness of best practices:

  • Smoke outside instead of in units
  • Store matches and lighters out of reach of children
  • Use a deep, sturdy ashtray to contain burning material and ash
  • Soaking butts and ashes with water before throwing them into the garbage
  • Free smoking cessation programs, which offer free samples of non-combustible nicotine products, contests and hands-on support and advice


Toronto Community Housing – Careless Smoking Tips (page 32 in the TCHC Safety Guide)

Smoke-Free Housing Ontario

Sample Rental Agreement Clause for Smoke-Free Building

US Food & Drug Administration, Tips to Help Avoid Vape Battery or Fire Explosions

Smokers Helpline website (includes quit tools and supports as well as free trial kits of nicotine replacement products)

Smoke Free Curious website (features quit contests and tools)

Kitchen/Cooking Fires: Education Is Key

Cooking fires are one of the leading property claims in both frequency and severity in the residential property sector as a whole.  Tenant negligence typically leads to kitchen and cooking fires –unattended cooking; frying with oil; flammable material near elements. As such, consider the following to reduce the likelihood and severity of cooking fires:

  • Tenant awareness/education campaigns, particularly during the Thanksgiving and Christmas holidays when the highest number of incidents occur
  • Checking for flammable materials near stoves when completing regular unit inspections
  • Installing UL858-compliant safety elements – in the HSC program, buildings with 100% UL858-compliant elements qualify for premium reduction
  • Mandatory tenant insurance as proactive step to mitigate provider claims costs


Fire Prevention: Serve up fire safety in the kitchen

National Fire Protection Association, Cooking Fire Public Education webpage (includes posters, videos, toolkits)

Toronto Community Housing Cooking Safety Tips (see page 30 in the TCHC Safety Guide)

Sample Rental Agreement Clause for Mandatory Tenant Insurance

Arson: Safeguards in Your Built Environment

Of the top three fire claims causes, arson is the trickiest to mitigate because the perpetrator’s impulse control is beyond the control of housing staff. However, we do have some measure of control in how we manage our properties; the materials we use; and the safety protocols and features of our buildings.  

Physical Prevention / Protection:

  • Adequate, exterior lighting (including motion activated lights) on all sides of the building that is checked regularly
  • Digital surveillance cameras
  • Lock exterior / main doors 
  • Immediate exterior surrounding of building to be free of combustible storage, garbage and excessive vegetation
  • Combustibles (e.g., paint, gasoline, and oil) stored in locked containers and quantity of combustibles in storage minimized
  • Highly combustible exterior cladding, such as vinyl siding, should be avoided as building material 
  • Barbeques should be located in an area well away from the building and combustibles and use prohibited on decks and patios
  • Exterior mounted mailboxes instead of mail slots

Maintenance / Due Diligence

  • Buildings should meet Ontario Fire Code requirements and compliance could be verified with local fire service
  • Regular, documented fire protection equipment checks
  • Unit inspections
  • Key control program that includes:
  • Restricted keys
  • Record of persons / tenants issued keys,
  • Change of lock cores during tenant change over
  • Restricted access to mechanical areas
  • Key fobs on main doors  
  • Tenants should be encouraged to report suspicious behavior / utilize private security
  • Tenants should be encouraged to get to know their neighbours to keep a watchful eye on the community 
  • Investigate if local fire department educational programs for children about arson are available and set up a session for kids in your community

Multi-Residential Buildings

Security Measures

  • Adequate interior lighting in hallways, staircases
  • Strategic placement and regular maintenance of security cameras
  • Locked exterior doors with card/FOB/key access and front door buzz-in
  • Locked interior common areas (e.g. laundry rooms, storage lockers) with card/FOB/key access
  • Passive protection such as locks, bars, and windows in good condition and in working order
  • Halls/stairways clear of combustible material 


Reducing Arson Homeowner’s Checklist

CPTED for Multi-Family Housing

Sample Rental Agreement Clause for Mandatory Tenant Insurance

Tenant Insurance: Make It Mandatory and Monitor Compliance

We have repeatedly emphasized the importance of tenant insurance in this communication and elsewhere. That’s because it offers important benefits to both tenants and housing providers.

Benefits for tenants:

  • Tenants may receive compensation for damaged, broken or stolen possessions in the event of a covered loss
  • Additional living expense coverage provides an easier transition to temporary accommodation and emergency expenses (e.g., meals), should they not be able to live in their unit after a covered loss.

Benefits for housing providers:

  • Additional living expenses coverage reduces the pressure of having to find temporary housing and cover emergency costs, which takes some of the worry out of an already stressful situation
  • Tenant insurance affords the opportunity to reduce the costs of a claim and its overall financial impact through its potential for subrogation. That is, if a tenant is found negligent, then HSC may be able to claim damages from the tenant’s insurance policy – which can then be used to cover costs under a provider’s deductible and to reduce the overall cost of the claim
  • HSC offers discounts to providers that mandate tenant insurance and monitor it

HSC offers low-cost tenant insurance to residents of community housing. We also have wording for a clause that you can insert in your rental agreement to introduce mandatory tenant insurance. One large provider took the opportunity to introduce mandatory insurance when an insured event disrupted their tenants’ lives; the provider continues to promote it when accidents occur. This helps support the uptake of the insurance because residents can see its value.

In some instances, however, requiring the insurance alone isn’t enough. Tenants can show proof of it and then cancel it afterward. This undermines any requirement in a tenancy agreement. To prevent this, monitoring that tenants have active policies can make a big difference. Monitoring tenant insurance can take different forms. It can include:

  • Requesting reports from HSC of residents currently covered by its tenant insurance program
  • Letting OW/ODSP caseworkers know about the importance of tenant insurance and periodically checking in with them on compliance
  • Having tenants provide proof of insurance at the same time as annual unit inspections

Do you have ideas on how to introduce or ensure that tenants maintain their coverage? We’d love to hear from you! Contact us today.

Coming Soon: Webinars on Fire Prevention and Contingency Planning

HSC is in the process of putting together a webinar on fire prevention in April. It will feature experts in residential fire investigations and HSC Insurance staff. We are also planning to re-run our Contingency Planning workshop, in which you can build your own personalized plan using our template and guide.

To keep posted on when registration is available for both events, sign yourself up to receive our Events alerts.

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