The Hockey Shop: A $1 million insurance payment six days after a fire rocks the industry.

Nov 01, 2018
September 23, 2017 was a devastating day for the owners of The Hockey Shop after a fire caused by arson destroyed the building and inventory of the store. But it didn't extinguish the tenacity of Chad Purdy and Brad Whiddington, who hit the road running to get the retail shop back in business.  The Hockey Shop Quote _Chad Purdy

The family-run business was established in 1988 and moved to Surrey in 2011. The Hockey Shop is a well-known hub for family and players in Metro Vancouver and throughout British Columbia.  

When Chad received news of the 5-alarm fire, one of the first things he did was call Paul Towriss, Senior VP Commercial Insurance at Reliance. Paul visited the site the day after the fire and immediately put the wheels in motion with Northbridge Insurance. One thing was certain - in addition to the physical property insurance, a business interruption clause needed to be kicked into full gear. It was clear that it would be necessary for the shop to temporarily relocate, set up a new operation and restock inventory - just as hockey season was getting into full swing. As Paul explains, "Most people see insurance as a costly expense, and dealing with an insurance claim is stressful. But we worked together with Chad and Northbridge and within 6 days of the fire, they issued a $1 million cheque to The Hockey Shop to start the relocation process.”

We caught up with Chad Purdy, Manager of the Hockey Shop, and asked him how things have unfolded over the last year since that fateful day. 

Tell me about the first few days after the fire. How did you cope with the prospect of having to start over? 

The fire started on the first day of my holiday. After unpacking my car and family, I immediately drove to the store and watched the fire burn from the side of the road. It took the fire department six hours to put the fire out but they did an amazing job of containing it the best they could. The first few days I just felt in panic mode, but I had a support structure I'm incredibly grateful for. Luckily, we're part of a national buying group of about 156 stores across Canada, and the President of the group put me in touch with another member who had experienced a fire that wiped out his building a few years prior. He gave me the play book on how things would unfold over the first few weeks. The Reliance Insurance team showed up the day after the fire and Paul and Evan from Reliance helped us navigate the steps required to work with Northbridge Insurance.

Was there anything salvageable after the fire?

Although the fire was isolated to the back 1500 sq. feet of the building, everything in the store was deemed smoke or water-damaged. Ultimately, it was decided by Northbridge that all inventory was deemed unsalvageable. 

How was the experience dealing with Northbridge Insurance?

I never thought I would be enthusiastically talking about insurance, but by and large all the nightmares you hear about dealing with these companies did not materialize. Overall, the experience has been exceptional. We've obviously had some negotiations on inventory valuation but the support was always there, with the idea of moving the process forward. They provided stop-gap financing and by all accounts, Paul Towriss says getting that financing just six days after the fire is unprecedented. They were fair to deal with and I'm extremely happy so far in the process.

What process did you go through to relocate? 

Because of the support we had, we were up and running within two months. We had to find the right building and that was a challenge, because we ended up in a former Best Buy building which was much bigger than the space we were vacating. But in the end, Northbridge liked our strategy and worked with us to get to a revenue-generating position. One thing we did was buy back our inventory and we literally had a "fire sale". Every day we were at capacity, with 200 people lining up at 11 registers all day long. The hockey community scored, and we were glad we could re-sell that inventory. I would say our fire sales was a huge success.

That didn't come without challenges for our operations. We saturated the market with product, as some customers bought 12 sticks instead of the usual two or three that they normally would. Because the hockey industry is cyclical, we had a hard time getting new inventory, as many suppliers were sold out for that cycle. But ultimately, we were happy with how things turned out. 

On Paul's advice, we had a very strong policy and making the decision to include business interruption insurance was key to the success of getting up and running again. I was not over-insured but I was not under-insured, so it was very sound advice. We looked at all the things for coverage, from legal, to forensic accounting, and all things in between. The advice we got was superb and saved us money. Strategically, we made all the right decisions. In addition, having Evan Miles, VP Claims Consultant in-house at Reliance was invaluable. Evan explains, "Claims are most often life-changing events whether small or large losses occur. A well-respected insurer, great claims staff and support of your broker is indispensable.”

When did you start to work with Reliance Insurance and why?

It was a referral from Mark Smigel in the Reliance benefits division. Reliance always gives great service - they are very thorough with good explanations and quick, prompt service. Before the fire, I looked at insurance as a cost and would look for ways to save money on my new policy. But it only takes an event like this to realize insurance is not the place to cut costs. Insurance is there for when you really need it. Having the right advice, doing due diligence and carving out the time to review the 'what ifs' is paramount. Reliance is great at risk management assessments. Lots of people come to me now and ask for advice. We're here today because we had the right insurance in place, otherwise it would have been the end of our store. 

Even though the event was devastating, the relocation allowed you to make improvements to the store. How did this help you grow your business and how you interact with the hockey community?

Well, if there is a silver lining, an event like this allows you to take a different look at the business, and do a reset and creates an opportunity to make changes. We're going to have a new store design and manage our merchandising differently. We've always been community focused and we want to implement a used gear drop-off depot, so we can get equipment to kids who may not be able to play the sport, but really want to give it a try. 

  The Hockey Shop will be moving back to their original location November 19, 2018. 

 

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