At their September 7 meeting, Council for the Township of Faraday heard a presentation from Dwayne Sutherland, Partner and Regional Manager of McDougall Insurance and Financial and Debra Murphy, Ontario East Regional Manager of Intact Public Entities, on updates to the municipality’s insurance coverage through 2023. Sutherland and Murphy informed council that their coverage will cost 18.5% more this year than last year at $129,575 excluding taxes .
Mayor Dennis Purcell introduced Sutherland and Murphy and invited them to make their presentation. Murphy thanked the board and said it was great to have his first face-to-face meeting in two years. [because of COVID-19] and it was great to be there.
Murphy told the board they were looking at a net profit of 18.5%, which was roughly in line with what Faraday had last year, equating to $20,000 on net profit.
“Like I was saying to Dwayne, that’s representative of what we see from a good municipal account today. That would be considered a strong customer, a customer to keep on the books, a customer who has usable claims experience. Between 16% and 19% is where we see things drop,” she says.
Murphy said one thing that drives the top four premiums is their general liability coverage as a cornerstone. This would respond to any member of the public injured at a township facility, where negligence is alleged.
Murphy said they also factored Faraday’s population growth into the policy, as compiled by Statistics Canada in 2021, which recorded a 15% increase. She said that with this increase in population, which was enviable and which keeps everything viable, it also means an increased demand for services and with this increased demand comes an increased risk of something negative happening, so it had been considered in these responsibility sections of the policy.
Also new this year, according to Murphy, is that abuse coverage was historically in the font.
“It was there and we didn’t say anything about it, we didn’t define it, we didn’t draw it like an article on your insurance policy to show you had coverage,” says -she.
However, many abuse claims have been received over the past decade, so she said Intact Insurance needs to define it more clearly, clamp it down and make it more distinct as a line item on insurance policies. She said coverage was $2 million for any claim in any given year, with a minimum premium of $1,000.
“So you have $1,000 built into your general liability cost this year that wasn’t there last year, plus population growth,” she says.
For property, Murphy said they have a current inflation rate of 9%, which she says seems high, but pointed out what it was like trying to get a house built by a contractor here in Canada or around the world, for example, in a relatively short period of time with all the shortages plaguing the construction industry due to COVID-19.
“So inflation is really high right now on the property side and that’s impacting your property insurance,” she says.
For their auto policy, Murphy said they took the international truck out of the policy and put in the 2022 Ford F-250.
“Now the International was a heavyweight and you would think it would be more expensive to insure, but the 2022 with replacement cost coverage and the value of a truck today there is a clear difference of 1 $000 attributed to improving what your fleet looked like last year versus what it looks like this year, even if your numbers are the same in terms of insured units,” she says.
“So this is my digest, hitting all the highlights. Your program hasn’t really changed in essence. You still have your $50 million limit, you have your $10,000 deductible on your losses of liability and $5,000 on your assets like your property, equipment and vehicles,” she says.
Murphy also revealed that unlike previous years, this year all of their clients now have a communicable disease/epidemic exclusion in their policies, which they did not have before. She said they never intended to cover it, but the wording of the policy was so broad that it ended up being successfully argued that it was covered. That was changed this year.
As for flood and earthquake coverage for other property at no cost, which they had before, this year they now have that coverage for building contents and equipment in the event of a flood or earthquake for a charge of $260 in the policy. She said that Faraday now has a curved premium deductible, unlike last year, so if they had a flood at the municipal office this year, they would have a $25,000 deductible, or if they had a flood at the community center, they would also have this $25,000 deductible.
Sutherland repeated that the three or four years had been difficult and that they had seen significant increases.
“The market among all municipal carriers is growing drastically. I’ll say just for what we’ve seen, 18.5 percent is tough, but it’s on the lower end. Hopefully the market will correct, we have had ups and downs over the years and hopefully this is the end of a tough market. It’s definitely the toughest I’ve seen in 28 years, so hopefully we’ll be through with it,” he said.
Switzer remarked that they have always had great service with McDougall Assurance/Intact Assurance and she was happy to stay local.
Purcell thanks Murphy and Sutherland for their presentation.
“Debra and Dwayne, great presentation as usual. It’s always great to have a presence at Bancroft and thank you,” he said.
Purcell then read the resolution that Faraday accept Intact Insurance’s bid in the amount of $129,575 plus tax for the provision of insurance coverage for the period October 3, 2022 to October 3, 2023, which was passed by the board.