(3).jpg)
The city of Westboro, Ottawa is looking at increased insurance premiums due to a fatal bus crash incident earlier this year.
Westboro has an integrated insurance program which covers catastrophic damage to primary assets and third-party losses – including injuries to the public. The program has a $3 million deductible and was up for renewal on April 12, 2019, but Westboro officials have been working with an insurance broker since August to find a better deal. Ottawa Citizen reported that the city’s insurance premiums increased by 25% from 2017 to 2018, and could rise an additional 10% this year.
The increases can be traced to a disastrous collision event that considerably raised the risk profile of the city.
On January 11, 2019, a double-decker bus collided with the Westboro bus station in the Transitway trench. The collision resulted in the deaths of three passengers, while 23 other passengers survived with injuries.
Following the accident, the city of Westboro was named a defendant in a lawsuit involving the incident. The city’s insurer, Frank Cowan, has been engaged in the claim process.
Insurance providers reportedly reconsidered insuring Westboro following the crash, but only Frank Cowan offered an insurance program – with caveats. The insurer made a condition that it would cover the municipality on a premium increase of about 84% – about $2.1 million more.
Thanks to the increase, the city has to dip into its tax stabilization reserve to pay for $2.5 million in unanticipated insurance costs this year.
Frank Cowan listed seven factors which have driven the cost increase: escalating costs of natural global disasters, joint and several liability, claim trends in the municipal sector, increasing damage awards, class-action lawsuits, new and/or adverse claims developments and transit exposure.
The insurance program also lowered liability limits from $25 million per occurrence to $10 million.
In March, the city council approved the 2019 budget. Also, during that month, Westboro hoped to work with its broker to conduct an insurance and risk management review, with the hope of getting a better insurance deal. The city also signed on for excess liability insurance, boosting the limit to $35 million.
Ottawa Citizen reported that Frank Cowan would not grant an extension to the existing premium structure.
