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Risks Facing Local Government As the business of municipal corporations in Ontario becomes increasingly more complex, the risk of expensive insurance claims, rising premiums and more frequent litigation grows as well. Rising claims
Municipalities are all too familiar with the problems that lead to claims. Potholed roads, poor ice at the civic arena, aging sewer and water services, challenges to the adequacy of building inspection and by-law enforcement, obscured road signs, a loose tile at the swimming pool, an under maintained fence are just a few examples of the claims situations that municipalities face. Regardless of the cause and no matter how major or minor, claims for physical or mental injury, property damage and financial loss continue to mount as does the expectation of more lucrative court awards. Rising premiums
Rising claims has placed increased pressure on insurance premiums. Frequency and severity of municipal claims has insurers re-evaluating the cost of risk for government entities. In recent years, and particularly following the events of September 11th, 2001, municipalities watched as insurance premums climbed and coverage became more restrictive. The insurance marketplace is also impacted by global events that can affect the cost and availability of insurance coverage even in Ontario. Rising litigation
We live in an increasingly litigious society. Ontarians and their lawyers are suing local governments with greater frequency than in the past. Unlike in some other provinces, Ontaro municipalities have only limited statutory immunity against nuisance liability. They have seen protections put in place against unwarranted road authority claims being eroded and have experienced the devasting impact of being viewed as "deep pockets" (Joint and Several Liability) Budget cuts
On top of rising claims, rising premiums and rising litigation, all local governments face restrictions within their annual budgets. That means finding savings, no matter how small, on every line item. Spending reductions can also lead, unfortunately, to reduced standards of community care and the ability to enforce those standards. This translates to increased exposure to property and liability risks. Viable alternative
How then can local governments reduce their burgeoning insurance costs, better manage exposure to expensive claims, and reduce the risk of litigation? Municipalities have discovered the answer by joining together within OMEX where they can work with others to preserve the municipal community of interest. OMEX represents the only viable alternative dedicated to the insurance requirements of municipalities in Ontario.
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