Today I have a unique show covering a topic many of us don’t give enough attention to, insurance. Rob Martin and Tori Hoeschler from the Horizon Agency are well versed on most things happening with Outdoor Sports Insurance and have a wealth of knowledge when it comes to the outdoor industry, risk management, and challenges facing outdoor brands and shops across the country. Brought to you this month by Grammarly.
How you were introduced to the outdoors Rob?
I grew up in Boulder, Colorado for the most part, and was skiing at a very early age and camping every weekend. And continued on at the University of Colorado. Then left in the Vail Valley for five years after that. So I’m born and raised in the outdoor industry.
Tori, how about you?
Yeah, I too would have to give all of the credit to my parents. My Dad, who’s actually the founder of our outdoor sports insurance program and a former Olympic skier himself, and a major outdoor enthusiast. He would put me in a Jansport backpack as an infant go skiing with me down the hill. So I would say essentially from the point that I started to show signs of walking, I was in a pair of ski boots. It’s kind of one of those things where it’s hard to be in my family as well and not be an avid out outdoor enthusiast.
Did you have an outdoor job, Tori?
Not in the retail space. I would say the closest thing I had to an outdoor job was when I was younger, like high school, I was a nanny for a lot of summers. And then one of the summers, I was nannying in a neighborhood where there were a ton of kids and a ton of other nannies. And we basically joined forces and started what was kind of like a summer camp to entertain all of the kids all at once. We would just do all kinds of things, like go on hikes and go out to the lakes and do events like that. So that I think would probably be the closest thing to my first outdoor type job.
Rob, how about you?
I guess my first outdoor job really was out of college. I had an environmental management degree and worked for a fisheries biologist and got to run all over Colorado doing studies on the river and, shocking the river to do fish studies and those sorts of things. That job ended with some funding issues but I went up to Vail for the rest of one season and stayed five years, managing mountaineering shops. So that was what led to this career path.
Rob, how did you actually get into insurance?
So my first insurance gig was, was this gig. I met Tory’s father, and she’s going to talk about Jake here in a minute. But we were at a wedding in California and got paired up on a golf course and I was looking to do something different. He had started what was then the ski insurance, what was the national ski insurance program in Minneapolis. And I took a chance and came up and started working for him. And that was Twenty-five years ago.
It’s kind of funny because I really never had any intention of going into insurance. I have to say, you know, it’s not necessarily a typical career path that people are like . . . when I grow up, I want to be an insurance broker. But you know, it is a program that I was effectively raised with if you will. And it’s one that my dad started back in the eighties.
He actually went to school out in Colorado and then went to law school at the University of Denver. When he completed his education he had a ton of friends from that area and also from his skiing days. And he saw that a lot of his friends went into the business side of the outdoor sports in the retail space also, in the manufacturing space, but mainly in the retail space. He was seeing a lot of these ski shops, just getting totally clobbered with these crazy frivolous lawsuits. So he happened into insurance himself kind of by accident. But then he thought, okay, well I have my insurance license. I have a law of degree and I have all these friends who are at the business end of insane suits. So that’s where he got the idea for this outdoor sports program.
Then I actually got into the insurance side of things about 15, 16 years ago, where I started out as an underwriter on the carrier side. And they say, once you get into insurance, you rarely get out.
What types of insurance do you focus on for outdoor businesses?
It’s commercial insurance or business insurance. The bread and butter of our program are what we do for retailers and brands, so we are helping the retailers. Obviously, they need affordable insurance, they need the right coverages, but they also have unique exposures to things like rentals and demos and special events. And putting people in outdoor recreation gear comes with its own concerns. We also work very closely with them in regards to providing waivers and risk management training and all those sorts of things.
Then on the brand side, it really is more product liability focused. We write all lines of coverage, but understanding the product liabilities is what we need to do there.
And obviously, we see all kinds of different outdoor businesses from Outfitters to guides, to special events, kind of anything and everything we like to say. We want to help everybody in the outdoor industry, and that’s what we try and do.
Tell us about the top three insurance-related issues that many of our businesses are missing these days.
This is an excellent question and you kind of hit the nail on the head with what I would say is the number one insurance-related issue that a lot of outdoor sports businesses are still not taking as seriously, or it’s just not a line of insurance that they feel like they want to add to their insurance costs any further and that has to do with cyber liability.
Currently, you are 10 times more likely to have a cyber event than you are to experience any kind of property damage, like a fire or something like that. And I think a lot of these businesses just kind of think of this in the context of those major hackings that are in the headlines where all these credit card numbers have been taken and that’s what the hackers are after. And that’s really not the case. What has really become quite a plague I would say in any industry sector, is this cyber extortion. And any type of business, if they use the internet in any way, shape, or form, they are exposed to this. And as I said, cyber liability is just not really a policy that people care to talk about. Cause they all say, well, we don’t save anything on our servers.
In addition to cyber, I would say on the retail side of things typically what we see outside of our OSI program is an outdoor sport retailer could have their standard property as well as their general liability coverage. But what they don’t realize is, especially when it comes to the GL side, they actually are probably not going to be properly covered if they are involved with any kind of rentals or any kind of demos, or special events. Those policies very specifically exclude injuries for the people who happen to partake in those types of events. That’s what makes the OSI program so amazing is that all of that insurance, all of that coverage is automatically built-in. That’s somewhere there’s going to be a major blind spot if you don’t have the proper third-party liability coverage.
Then with the manufacturers, a lot of times what we see is many of these manufacturers, actually make their products outside of the US, and then they import them in and they don’t have the proper international coverage. Any insurance policy is going to say that the coverage territory is on a worldwide basis, but all that means is that the injuries can take place anywhere in the world. But typically if a person is going to try and seek some type of damages, they have to bring the suit back here in our country. And a lot of companies don’t realize what a massive gap in insurance that is. There are policies out there that can be properly tailored to the international landscape. We don’t see those as often as I think we should. And that’s where we certainly can step in and, and help out on that front.
An event could be anything from a clinic where all your employees are in the shop in the evening, and a rep’s giving training to some kind of a swap meet. So people have these sales in the parking lot, where they sell stuff or it could be some kind of an event outside. What is the range of events on that?
We have retailers that are obviously trying to compete with direct-to-consumer and Amazon and the rest of the world. And so they’re trying to differentiate themselves in their communities and be that go-to shop. And a lot of times they’re doing that, whether it’s a demo day or a Mountain Fest or an educational clinic, whatever the case might be. And they can do those things in our program. We just want to work with them to make sure that we’ve got a proper waiver in place and that everybody that’s involved, like if they’re maybe partnering with a local brewery and serving beer or whatever the case might be. We’ve just got to walk them through that and make sure that they can go have a good, fun, safe event.
And how do these small outdoor businesses handle the cost side of insurance? Because it can be pretty expensive, right?
It’s a little bit of a difficult question to answer because so many of the reasons why the costs of insurance are so high these days really have nothing to do with the actions of any one policy holder. Basically, it’s what’s happening in the overall climate and the overall American market overall.
Up until 2005, The United States was averaging, I would say anywhere from six to seven catastrophic events every year. That would be like a hurricane or a wildfire or some kind of insane flood. Between 2005 and 2021 however, that average has now increased to over 20 events a year. And when we say catastrophic events, we’re talking about events that cause hundreds and hundreds of millions of dollars in damage.
So the insurance carriers have just been shelling out a ton when it comes to property claims. And then even on the liability side, the cost of healthcare just continues to go up. So that’s going to make the cost of a third-party injury suit to be expanded as is the cost of these attorneys.
So the way that we try to set our policyholders up for some type of success and to help us to manage their insurance costs, is we tell them to do everything that they can to mitigate their own exposure, you know, stay on top of your game, have the proper waivers, have the proper training for your employees, help us help them to showcase them as excellent managers of their own risk.
I’ll just add too, we’ve been at this 35 years now. And our program is big enough now we’re really unique and don’t have a lot of competition out there from the standpoint of we can absorb some of these bigger claims. Whether it be a seven-figure liability claim or a work comp claim or whatever the case might be based on the volume of premium that we have in this program and the relationships with the carriers that we have. We’ve been with the same carrier for over 30 years on our retail. And there’s kind of safety in numbers in a way that we can stick with a client. even if their number comes up and they have a bad lawsuit or they have a bad property loss, we’re not going to cancel them. We’re going to stick with them. And it’s all viewed across that whole program premium, which really puts us at an advantage.
I’m sure there is a handful of future law-related landmines business owners should be aware of, what are some of those?
We talked a little bit about the ADA piece, right? The ADA compliance and website accessibility have become this kind of new frontier of petty plaintiff lawsuits. What this involves is where an attorney we would otherwise refer to as the ambulance chasers if you will they will have a day job actually, and so they’ll hire somebody who has a visual impairment. And then they’ll just tell them to go on to a bunch of different websites, effectively to see if the websites have been set up in such a way where there is the appropriate code that can then talk to the computers of people who have a visual impairment. And if the websites in any way can not accommodate that, then these attorneys just send them a demand letter and say you were out of compliance with the ADA laws and you have caused our client to suffer some type of discrimination. We would like a settlement of like 14 or 15 grand.
And in some cases that they just will send a super generic form, it won’t even be specific to the shop. And they’re just saying, we’ve been able to ascertain that you’re out of compliance. So that’s really been a landmine. And the thing is that is actually an exposure that is not a covered exposure by insurance.
So that’s an area where in addition to having really awesome coverages elsewhere in OSI, we really try to educate all of our policyholders and make them aware of these things. Because even though we don’t have a solution for you, we still want you to be aware of this and help you sidestep these other exposures, where the insurance won’t be able to pick up the tab if you will.
And beyond that, Rick, I think, just in general, on the property side of things, we’re all watching what’s going on with climate change. Right. Our friends, friends in South Lake Tahoe, dodged a bullet, I think last week. We’ve got a ton of business in that area, but being able to provide affordable property insurance is going to be the challenge in the future. And then on the liability side, the legal climate out there, we’ve got these very liberal jurisdictions that are given these jury awards that, you know, were unheard of in the past. And so we’ve really got to be vigilant to make sure that we’ve got coverage, and we’ve got the right adjusters and attorneys defending these claims so that we can continue to provide affordable insurance for these outdoor companies we work with.
You do a lot of business with industry groups, like the OIA and the SIA. Tell us a little bit about that.
What we do with those groups is really just be a partner for them so that their members have a place to go to, to find proper, affordable insurance. And we’ve worked with OIA and SIA for decades. Now we work closely with the buying groups, whether it’s GOA or SMC and SSL on the ski side, recently we started working with the BRA, which is the board retailers association. We really liked working with those industry groups so they know who we are and how we can benefit their members. And they’ve been great partners for us for years.
Do you work with any nonprofit groups, like the Alaska Wilderness League or anyone like that?
We do see non-profits that need insurance. A lot of that, again, is circling back to event-based things, whether they are an outdoor education type company, We’ve got a reasonably big program for the bike share industry. So most of the cities across the country, we’ll set up a nonprofit. They want the liability off the city books and we work with those nonprofits. So we see a little bit of everything in the for-profit and non-profit world.
Do you have any suggestions or advice for folks wanting to get into the insurance side of the business? What’s that career path?
It’s a great career, but it’s a career that takes a long time to build. When you start off, hopefully, you have a good company behind you that trains you properly and gives you the right resources and support that you need. But eventually, you build a book of business and a book of clients. And hopefully, they’re all renewing with you every year and like what you’re doing for them.
And, and it’s a great career in that you don’t have to go start from scratch every year as a lot of sales jobs. You’ve got that renewal book behind you, and then you can hopefully write new business every year and continue to grow. But there’s a lot of education in licensing and things like that, that go into it. But I would certainly encourage anyone that’s interested, you know, there’s not a lot of people to do what we’re doing in regards to the outdoor space and we could use more.
If you were able to hang a huge banner at the entrance of the OR show or The Big Gear show, what would it say?
Rob- We’re unique and we’re best in class as far as the solution for businesses in the outdoor industry.
Tori- Have us do what we do best so that all of our insureds can get back to doing everything that they enjoy doing best.
Do you guys have any favorite books or books you give as gifts?
Rob- I like the business books and Yvon Chouinard’s Let my People go Surfing is a book I’ve given to a few people that need some encouragement, whether it be in the outdoor space or just taking an entrepreneurial attitude towards life.
Tori- I tend to like either real fiction stories or the nonfiction space. I like to do things that have a lot of weird stories in them. So a favorite book that I’ve been giving out is American Kingpin. It’s the story of the guy who founded the Dark website called The Silk Road, which was basically like the dark web Amazon for all things illegal.
What is your favorite outdoor gear purchase under $100?
Tori- Hand Warmers
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