An Alberta snow-removal contractor has been scrambling to dig himself out of a pricey insurance premium situation.
Chris Jorgenson, owner of Canada Yard Pro, told Global News he was shocked when he got his latest renewal.
“Last year we were paying $7,800,” he said. “This year, we were getting quotes as high as $65,000.”
Jorgenson said he has heard from about 100 other snow-removal contractors in the province who are also facing premiums up to nine times what they were charged before.
“Basically everybody is not OK with the increases, but we have no choice,” he added.
“We can’t operate uninsured.”
Jorgenson was able to get his insurer to scale back the hike to 30 per cent, but said that came with a tradeoff — he’s been restricted from clearing snow at high-risk slip-and-fall locations.
“We’re restricted from doing any type of medical facility, seniors’ centres, schools, box stores with over 50 parking stalls,” he said. “As well as any strip malls that have a bar, restaurant or lounge attached to it. The list goes on.”
And because most of the businesses he serviced in Edmonton fell into those categories, he had to make a tough decision and close up shop.
“It’s disheartening,” he added. “We’ve been in Edmonton for 15 years.
“We’ve notified all of our customers up there and a lot of them just don’t know what they’re going to do. A lot of them are going to struggle to find an insured contractor.”
The Insurance Bureau of Canada told Global News that over the last several years, insurers have seen a significant increase in not only severe weather but other commercial liability claims.
IBC said there has also been an increasing number of injury lawsuits by those claiming to have fallen on snow and ice across Canada.
IBC spokesperson Rob de Pruis told Global News in 2013 insurers paid out $2.4 billion in commercial liability claims. That number had risen to more than $5 billion in 2020.
“Between 2013 and 2020, we did see a 108 per cent increase in commercial liability claims across Canada.”
de Pruis advised contractors to shop around and, most importantly, review how they operate.
“Businesses need to start taking control of their business and make sure they’re really reviewing their insurance and their risk-management practices.”
He advised snow-clearing companies, along with any contractors they hire, to also document anything and everything.
“Make sure that they’re really taking photos, videos and also detailed logs of when they’re doing these clearing operations. If a person does slip and fall you may not hear about their injuries and their claim for their injuries for a couple of years after their event.
“That’s where this documentation and this evidence is going to be really key.”
Fraudulent claims
Jorgenson said his company had only been involved in one commercial liability claim, four years ago, and it was found not to be at fault. He believed most of the injury claims are fueled by people simply seeking a payout.
“This affects everybody.
“It affects the individual that is a legit claim, it affects snow contractors, it affects businesses because with the increase in premiums, those have to be passed on.”
de Pruis said unfortunately there is insurance fraud all across Canada, and there’s a need for a more coordinated approach to combat it. However, he added, prevention is what is key right now because fraudsters are tough to catch.
Jorgenson said he has talked to other snow-removal contractors in Alberta as well as government officials about getting some help. He’s hopeful some sort of legislation will keep insurance rates manageable.
How does his company plan to manage in the short-term? He hopes to streamline his operations and be as lean as possible.
Unfortunately, he added he will have to pass on an extra 10 per cent cost onto his customers.
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