Insurance coverage options mulled over by council


By Karen Fallon

Council was provided with two options regarding insurance coverage at its Dec. 10 meeting.

The first was to renew the insurance policy held with Frank Cowan Company for the term Nov. 2012 to Oct. 31, 2013, while increasing the current deductible limits and developing an internal insurance program.

Increasing the deductibles, notes Brenda Percy, manager of council and legislative services in a report to council, would change the renewal premium for this coming year and result in no increase to the premium from last year’s rate of $767,880.

However, there would be other associated costs such as establishing a general insurance reserve of $100,000; added wages for the deputy clerk of approximately $30,000 and adjuster fees.

The second option before council was to renew the town’s insurance policy for the same term at the proposed premium increase of $931,920 (excluding taxes.)

Council opted for option one which will increase involvement by the town by becoming responsible for internally managing and administering all claims under the new deductible amount and implementation of the “Municipal Insurance Program.”

The town will be required to establish a “General Insurance Reserve” to cover the costs of claims and related expenses that the town is liable for and that qualify under the deductible limit of $50,000, notes in Percy’s report.

The hours of the deputy clerk will be increased to allow for management and coordination of the in-house insurance management program.

The only claims that would be dealt with in-house would be those which fall under the deductible limit and anything that required legal counsel would fall under the Cowan company, says councilor John Sutton.

At its meeting held Nov. 13, because of the high premium increase council passed a motion which held the renewal of the insurance policy held with Frank Cowan Company in abeyance until administration could review possibilities regarding the town’s insurance coverage.

Increase in insurance premiums are said to be province wide and are contributed to via a number of factors including Joint and Several Liability, increasing costs to defend a claim and large damage awards predicated on future care costs for catastrophic injuries.

In 2011, AMO conducted a comprehensive survey of municipal insurance costs and found that liability premiums across Ontario had increased 22% over five years.

In 2011, the average annual insurance premium for municipalities with a population of 10,000 to 42,500 was $375,666.

However, Amherstburg’s insurance premium in 2011 was $767,880, which was 104% higher than the average annual insurance premium for municipalities of a similar size.

Mayor Wayne Hurst says: “The more claims you have the more your premiums will increase.”

“The biggest thing we have to deal with is the individuals who arbitrate those claims and the person that pays it in the end is the one with the deepest pockets and that is the municipality,” said Hurst

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