by Sylene Argent
At the regular meeting hosted virtually last Wednesday evening, County Council received information about the details of the insurance program proposal submitted by AON Risk Solutions, for the period of June 30, 2020 to June 30, 2021.
Sandra Zwiers, Director of Financial Services/Treasurer, said the purpose of bringing this matter forward was to make County Council aware of the purchase of the comprehensive insurance program coverage.
This will cost the County of Essex $953,372, plus applicable taxes. CAO Robert Maisonville approved the insurance coverage on June 29. At the June 17 meeting, she noted, a motion was passed to delegate the authority to approve the program to the CAO. At the last Council meeting, she added, administration was unable to prepare a report on the matter because complete information had not been obtained for a recommendation on program renewal.
The recommended insurance program renewal represents an increase of $91,356 in insurance premiums, as well as additional costs related to increased deductible levels, which will be influenced by the number of claims arising during the program period, the Report to County Council notes.
“To say this renewal was a challenge is an understatement. Both the CAO and I have not experienced a renewal as challenging as this one,” Zwiers said, adding the program she presented met the County’s insurance requirements.
Zwiers said there has been a continued hardening of the market, which means a number of carriers have exited municipal business. Most, if they remained in the industry, have tightened their risk and are changing some of their programs to reflect the continued pressure on the industry in respect to municipal liability.
The program presented, she said, maintains coverage limits on a global level. There were some changes made to the sublimit coverage. Overall, global coverage of $50M in coverage has been maintained, she said.
With respect to deductible limits, Zwiers said, historically, the County of Essex had self-insured retention of $25,000 per occurrence or claim, which means the County would have to pay the first $25,000 in costs before program coverage would kick-in. That deductible was changed through this program up to $100,000.
“I recognize that is a significant increase compared to what we were used to,” Zwiers said, adding she did poll upper-tier peers from across the province and learned a $25,000 deductible is growing to be quite rare. The $100,000 deductible level is in line with what most upper-tier municipalities have been paying. She said there are upper tier governments across the province paying far in excess of $100,000.
Overall, she said, this program is increasing just over $91,000, to a total program cost of $953,372. Two-thirds of that increase, Zwiers said, relates to general liability coverage. The balance, she said rests with the automotive program.
Room for an increase in insurance in the 2020 budget was added, Zwiers said, but only for 5 percent, which is just shy of half of the actual increase. Administration will monitor insurance program costs for the balance of the year, and if necessary, will recommend any deficits be covered by a transfer from the Corporation’s Contingency Reserve.
LaSalle Mayor Marc Bondy said liability is a big part of the premium, and that is where County Warden Gary McNamara, and his fellow wardens from across the province, need to pounce on the provincial legislators so joint and several liability can be changed. He knows McNamara has spoken on this issue before, but the hammer has to come down because it is affecting all lower-tier municipalities. He said it is getting to the point where taxes are raised to cover this.
“We have to put an end to this sometime,” Bondy said.
Deputy Mayor of Essex, Richard Meloche, said, by looking at the report, some of the deductibles are still staying at $25,000.
Zwiers said the $25,000 deductible will apply for cyber insurance, which was increased from $10,000. Also, the auto deductible is remaining at $25,000. An example that would trigger a $100,000 deductible, she added, would include a slip and fall.
McNamara agreed pressure needs to be put on the government to finally do something about joint and several liability.