M̶o̶n̶e̶y̶ Insurance Makes the World Go Round

In this blog post, KA Insurance’s VP of Risk Strategies Seth Hausman sits down to discuss his personal passion for the insurance industry and the important work that KA Insurance does.

Seth Hausman headshot
Seth Hausman

 

Seth, you have a unique view on the insurance industry and its purpose. Tell me, how do you personally view this industry and why do you think it is important enough to invest your whole career?

Hausman: “I worked for a CEO for a long time, and one of the things he said early on was that he loves the insurance industry not because of the insurance industry, but because it’s important. It’s absolutely a necessity for every other industry. He loved it because of its connectivity to every other field.

“And that’s somewhat unique. The easiest example for the construction world where we live in is, not a single project that KA builds could happen without the insurance industry. Nobody could move products, nobody could transport stuff, and so on.”

So you definitely share his view.

Hausman: “I don’t get excited about selling the next policy or delivering the next endorsement. The passion for me comes from facilitating and participating in the projects that our clients build and, in some cases, the iconic structures that would never have gotten accomplished without the insurance industry.

“The Hoover Dam story is one of my favorite examples. As the story goes, in 1931 the government said, we’re not building this project without the insurance industry. We need an insurance partner, or it’s not going to happen. So this industry didn’t exist because we wanted some policy; we existed because we needed to dam the river.”

KA insurance logo

So insurance literally makes the world go round. Do you have any KA comparison projects? Do we have any ‘Hoover Dams’ of our own in terms of projects with a huge impact?

Hausman: “If you want to pick one or two sort of iconic projects, probably the Scottish Rite Temple on the corner of Dupont and Franklin Ave. It’s a hundred years old and it was built by KA. It predated the KA Insurance Agency, so it wasn’t even our agency working on that project, but based upon the complexity of the design and construction, you could imagine how important insurance would have been at the time.

Scottish Rite temple exterior
Scottish Rite temple on Dupont and Franklin.

“Minnesota did not adopt a workers compensation regulation until 1913. So, when this building was built, the employees probably had little if any recourse if they were injured. In 1906, the most important insurance requirement would have been surety bonds to guarantee the completion of the project and ensuring financial protection if the contractor failed in that regard, and fire insurance to protect the investment in the event of a fire during construction.”

Wow. So when you say these projects, new and old, couldn’t have been without insurance, what do you mean? What does that process look like?

Hausman: “Well, I’m actually being very literal. It can’t, because the risk would be too great. There’s a lot of different things that could happen there; somebody gets hurt and you have a worker’s compensation claim, the window leaks and you’ve got a liability claim, there’s a hail storm and the roof is damaged as a property claim, etc. There’s a large number of different types of coverages.

“Another perspective is, we have to buy insurance because it’s required, and we buy it and we never use it unless something bad happens. But that’s not why you’re buying insurance. Yes, it’s there if something bad happens, but you’re buying insurance to allow you to build a building.”

Steel rising on the KA Block, Sept. 12, 2016
Steel rising on the KA Block, Sept. 12, 2016

The two seem very intertwined. Do you consider yourself in the insurance industry or construction industry?

Hausman: “I’m going to say I’ve always been in the construction industry, working for an insurance company. For some companies, it’s a much smaller percent of their business, but because contractors are high risk businesses, insurance is a big deal. So they care about their partnership. We get very in depth with our client’s businesses to make sure that we’re doing what they want to do.

“There are certainly plenty of people that work in the insurance industry because they love insurance. But personally, the excitement for me is being able to provide solutions to the construction industry.”

Is the insurance agency only in the business of construction then?

Hausman: “Not exclusively. We are mostly in the business of construction, but we have individual clients who are working in other types of businesses.”

How do you know when the agency has done their job well? What’s the reinforcement that keeps you coming back?

“We know we succeeded when we walk by the building and we see it completed.”