Private snow removal costs to spike as insurance costs skyrocket | Calgary Herald

Snow removal contractors are being bulldozed by ballooning insurance rates, which could render their services unaffordable to many clients, says a local operator.

“Everybody’s insurance across Canada is going up because of the slip and fall claims . . . we’re all in the same boat,” said Jorgenson, who said he’s contacted dozens of operators.

“Some insurers won’t provide any insurance at all.”

An insurer who normally charged his landscaping company a premium of $7,800 is now quoting rates of $50,000 to $65,000 for the same coverage, he said.

That will likely lead his company to pass on the increased costs by charging 20 per cent more to commercial customers, but those who’ll most sharply feel the effect of the hike will be residential clients, said Jorgenson.

“We’re a necessary business — there are seniors and those with disabilities who are incapable of removing snow,” he said.

The higher insurance costs could put many firms out of business and lead others to operate without insurance, “which would be suicidal,” said Jorgenson.

“I’m not going to risk 15 years of investment in my business by not being insured.”

But he said the soaring rates could lead to thousands of layoffs in the sector, adding snow clearing comprises a third of his company’s revenues.

It could leave residential, commercial and institutional customers scrambling to find service, Jorgenson added.

“The gap can’t be filled by the big operators out there. They just don’t have the resources to ramp up that fast,” he said.

Commercial liability coverage claims that include ice-slipping incidents increased by 108 per cent between 2013 and 2020 in Canada — going from $2.4 billion to $5.1 billion, said Rob de Pruis, director of community and industry relations with the Insurance Bureau of Canada (IBC).

“Premiums are a reflection of the risks these organizations are facing, and we have to consider the claims costs,” said de Pruis.

The level of premiums would be determined partly by a company’s claims history, said de Pruis, though Jorgenson said his firm was only involved in one such case, four years ago, and was found not at fault.

It’s unclear why so many more claims are being made by people insisting they’ve been injured, he said, but those liability costs are being increasingly shared by property owners with those who clear snow for them.

Fraud is a definite element in those claims totals, but because it usually takes so long for them to come to insurers’ attention — three years in some cases — it’s difficult to prove bogus complaints, said de Pruis.

“Insurance companies and investigators don’t have the most updated or relevant information,” he said.

And he said insurers aren’t likely to contest a claim if the legal costs exceed the sums being demanded by the complainant.

At the prospect some landscaping firms could be priced out of the insurance market, de Pruis said there are ways for them to reduce premiums, such as improved training and using before-and-after photo or video evidence of their work.

Those contractors, he said, can also shop around for better quotes.

“In Alberta, there are over 60 insurance companies offering commercial liability coverage,” he said.

Jorgenson said snow removal operators are being unfairly tagged with negligence, adding provincial government policy such as limits to such legal action and caps on liability premiums should be considered.

“This is about policy created by insurance companies and poor legislation,” he said.

In 2019 the UCP government eliminated a five per cent increase cap on automobile insurance rates, which then rose considerably.

Last October, the province announced it was taking legislative steps to address those affordability issues.

Municipalities are among the larger institutional customers that supplement their own snow clearing efforts with outside contractors.

A City of Calgary spokesperson said they haven’t heard any concerns from their snow plow contractors, whose multi-year agreements might protect them from the effect of lawsuits.