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Insurer cites joint and several liability as a factor in Essex County’s 41.7% 2011 municipal insurance renewal


December 21, 2010   by Canadian Underwriter


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Essex County in Ontario saw its 2011 municipal insurance renewal increase by 41.7% over 2010.
The municipality’s insurer attributed the premium increase to higher liability claims costs, including larger damage awards, higher legal defence costs, more class actions, the impact of the Harmonized Sales Tax and the joint-and-several liability rule.
Joint and several liability played a major role in Essex County’s increase, as well as in Perth County’s 2011 municipal insurance renewal increase of 54% over last year.
Essentially, the rule means municipalities may be liable for 100% of damage awards in cases in which there are multiple defendants and the other defendants can’t pay, even if the municipality is found to be only 1% liable.
“Joint and several liability (the 1% rule) is becoming such a significant concern to our Ontario clients that the Association of the Municipalities of Ontario (AMO) has created a working group with a goal of lobbying the government to reform this law,” according to a report the Essex County Council received from DPM Insurance Group and Frank Cowan Company prior to the council approving the rate increase.
Overall, Essex County paid a premium of $687,168 in 2011, up from its 2010 premium of $484,981. This was driven in large part by a 70% increase in the county’s municipal liability portion of the premium, from $267,681 in 2010 to $455,058 in 2011.
The county reported seven open slip-and-fall liability claims worth a total of about $848,000, as well as five open motor vehicle accident liability claims worth a total of about $802,000.
Essex County noted in a report before Council that many other counties in Ontario witnessed municipal insurance premium increases in 2010, including Lakeshore (a 40% increase), Kingsville (35%), Amherstberg (28%), Leamington (20%), Lasalle (12%) and Tecumseh (5%).