WELLINGTON NORTH – The cost of insuring the township has been rising year-over-year since 2019, when the market began trending above the rate of inflation – and this year is no exception, with no end in sight.
The appetite of insurers to underwrite municipalities is spoiled, Andrew Coburn of Coburn Insurance Brokers explained to councillors in a January meeting.
A hard market – one where insurers are showing hyper selectivity in new customers and writing less policies – drives up premiums to compensate for the lack of volume.
And municipalities have a lot of exposure to risk, like being dragged into lawsuits, making them unattractive to insure.
Covering 2022-23, the township’s premium rings in at $264,081 – up $32,669 (14%) over last year’s term – and that’s with a switch over to a new insurance carrier offering a slightly cheaper premium.
For the past nine years, the township’s carrier had been Marsh and Mclennan (previously JLT), which presented a fairly similar 2022-23 premium offering of $269,521.
But council followed a staff recommendation to drop the carrier and switch over to Intact Public Entity.
The township doesn’t lose out on any of its current policy coverage with the less expensive option and, according to Coburn, some services are gained without any additional expense.
The broker told councillors that Intact offers several no-cost risk management benefits to try and reduce liability, some of which include asset valuation, contract reviews and road risk reviews.
“These are all things … that I think can greatly enhance the policies and procedures of the township and reduce risk overall,” Coburn said.
He recommended a transfer to Intact insurance based on the added services and service standards, such as same-day response.
Cyber insurance emergency trend
One notable increase seen this year is in cyber insurance.
Cyber has more than doubled over last year, increasing from $4,250 to $9,250 for the 2022-23 period.
It’s a relatively new product being offered in the insurance market and Coburn said the premium increase this year is directly connected to employees working from home during the pandemic.
“Accelerated digital transformations of a lot of companies pushing staff and employees to work from home [has increased] the vulnerability of a lot of organizations,” Coburn explained, adding there has been a dramatic increase in cyber-related claims.
Although Intact doesn’t offer cyber coverage, England-based CFC Underwriting offers the actual policy, and coverage as written will be transferred from the old insurer to the new one.
