The threat of lawsuits remains a major financial concern for Canadian municipalities and their insurance companies – and Mapleton is no different.
“We’re in a very serious situation with liability insurance,” said Steve Smith, a regional manager with the township’s insurance provider, Frank Cowan Company.
During a presentation last week highlighting Mapleton’s 2011 insurance program, which includes $25-million per occurrence in municipal liability coverage, Smith lamented the growing trend of litigiousness in the country.
It seems no one is responsible for anything anymore, Smith said. Whether it be a fall or auto accident, people are always looking for someone else to blame – and pay, he added.
Given that municipal governments have “deep pockets,” quite often they are the ones burdened with a large settlement, Smith explained. The 1% fault stipulation – which can see municipalities pay an entire settlement if found just 1% responsible – makes matters worse.
Smith said there was a movement to amend the Negligence Act last year, but that kind of died down due to the elections. He asked Mapleton council to support changes to the act, because municipalities and insurance companies can no longer afford the increasing cost of liability insurance.
“It’s very important something gets done,” Smith concluded.
Councillor Andy Knetsch asked if the township could be sued by residents in Drayton whose homes are flooded by the Conestogo River, as has happened several times in recent years.
“You’d have to prove negligence,” Smith replied, noting that is very hard to do with floods. “I don’t believe [they] would have much success.”
He noted the $25,000 coverage included under “peril of flood” in Mapleton’s 2011 insurance program applies to municipally-owned buildings.
Councillor Neil Driscoll asked what effect a new solar energy project on the PMD Arena roof would have on the program, if council decides to proceed with that project. Smith said the project would be included on the township’s list of property and added to the liability section, but it would likely not result in a large premium increase.
Council unanimously approved the 2011 insurance program, with a premium of $151,752, which represents an increase of 2.6% over the 2010 cost of $147,934 (Mayor Bruce Whale was absent).
Not surprisingly, municipal liability coverage accounts for over 28% (or $42,972) of the 2011 premium. The only higher cost is coverage for municipal property, at $62,600 or 41%. The 2011 premium may still increase slightly, as the new Alma community hall at Wallace Cumming Park was not included on the list of township property. It will likely be added at council’s next meeting on Feb. 8.
