How IBC plans to keep insurance “affordable and available” across Canada
February 18, 2020 by Jason Contant
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Following years of significant commercial insurance losses, Insurance Bureau of Canada (IBC) has launched a national task force to examine ways to help Canadian consumers mitigate risk and manage costs.
The National Commercial Insurance Task Force will bring together insurers, brokers, local chambers of commerce, small businesses, trucking stakeholders and risk experts to look at the impacts of the hardening global market and develop recommendations to help keep insurance “affordable and available” across the country. The task force will look at how increased commercial insurance premiums are affecting Canadian companies and consumers, as well as ways for consumers to mitigate risk and manage costs.
An inaugural meeting will be held this month in Edmonton, followed by meetings in Vancouver, Halifax, Toronto and Montreal in the coming months. The task force’s report providing recommendations is due this fall.
“We’ve heard from concerned parties across the country about challenges with finding affordable insurance and we want to know what can be done to overcome the problems,” said Don Forgeron, president and CEO of IBC, in a press release Feb. 10. “We strongly believe that if all stakeholders work together, we can find solutions to control costs and, ultimately, improve insurance availability.”
The task force includes representatives from the Canadian Condominium Institute, Canadian Trucking Alliance, Canadian Federation of Independent Business, Insurance Brokers Association of Canada, Risk and Insurance Management Society, IBC, the insurance industry and other stakeholders.
Related: How IBC is addressing hard market in condo insurance
Last month, IBC announced that it was engaging a risk manager who can make practical recommendations to condominium corporations to reduce their risk. IBC will make the risk manager available to assist condo corporations – especially in Alberta – who are having trouble acquiring insurance, IBC said in a release Jan. 7. An IBC spokesperson told Canadian Underwriter at the time that the risk manager has yet to be named.
Engaging the risk manager is part of IBC’s Condominium Action Plan to further assist affected condo corporations in Alberta. Other components of the plan include:
- Providing education and information on insurance and the importance of risk management and loss prevention strategies for condominiums
- Providing the government with best practices used in other jurisdictions
- Engaging insurers, stakeholders and government to directly assist condominium corporations facing issues in the marketplace.
Consumers who have questions or want to learn more about commercial insurance, risk management or factors that impact premiums can call 1-844-2ASK-IBC or visit ibc.ca.
Related: Brokers on what would help bring down skyrocketing condo insurance premiums
Chuck Byrne, executive director and chief operating officer of the Insurance Brokers Association of B.C. (IBABC), was asked recently by Canadian Underwriter about what he thinks would help address rising strata/condo premiums and deductibles. Among his suggestions:
- Make insurance mandatory for all condo unit owners in the condo corporation
- Start a campaign to entice condo buildings and unit owners to adopt technology (such as water detection sensors, flow meters and shut-off valves) to mitigate losses
- For strata buildings in B.C., there needs to be a significantly heightened discipline around depreciation reports and future capital repairs/replacement and related planning
- Two key reforms to the Strata Property Act: a $50,000 cap on loss assessments (which may not apply in cases involving negligence) and, the addition of a standard “bare bones” definition of a strata unit.
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The most important thing the IBC can do is to make sure Property Management Companies are not being covered by the Strata’s insurance policy. In BC the BC SPA lists who the named insured are supposed to be and Property Managers and PM companies are not on that list… for very good reasons.. they do NOT have an interest in the property, they are not owners, they are contracted service providers, NOT EMPLOYEES. “Stratas are not insurers” are the courts and the CRT have numerously stated so why are owners expected to pay to insure PMs, their companies and even the staff at their offices across the city? This is unjust and needs to stop happening. These CONTRACTED SERVICE PROVIDERS NEED TO BE ACCOUNTABLE TO US NOT THE OTHER WAY AROUND. THEY ALREADY HAVE THEIR OWN INSURANCE VIA THEIR OWN ASSOCIATIONS…they have two other levels of insurance. The risks and the consequences to strata buildings are significant when the PMs are fully immunized against any version of accountability. It is astounding that this is happening at all. Further, the expense should not be ours as owners. We, the real stakeholders are never consulted fairly and it is time we are. This practice of insuring PMs (as they demand it and include a provision in their one-sided contracts) promotes and / or facilitates some of the fraud and/or misappropriation of funds and the generally poor quality of maintenance of building systems that has become a bit of a norm.