HRM insurance costs rising due to storms, COVID-19

The cost of municipal insurance for the city of Halifax is going up, partly due to storms and partly due to COVID-19. 

City spokesperson Klara Needler wrote in an email that the cost had jumped 45 per cent between June 2019 and May 2020. 

"This increase was partly due to changes in rating and value, including weather related claims due to weather events, as well as COVID-19 impacts on the general insurance marketplace," she wrote. 

Staff are scheduled to present the section of the budget dealing with insurance costs to council on Feb. 3. A figure for the increase hasn't been made public.

In 2017, council selected insurers Aon Reed Stenhouse at a cost of $2,202,956 for the first year, with the option to renew annually for four more years. 

Amanda Dean, the VP Atlantic with the Insurance Bureau of Canada, said claims from frequent storms and hurricanes in Atlantic Canada are pushing up insurance costs. 

As well, Dean said there are "a lot of unknowns" for insurers that are trying to predict how claims related to COVID-19 could look. This may be driving overall insurance costs higher.

"There may be some organizations that could be open to some additional risk given the pandemic," Dean said. "Insurers need to assess what is the risk that they're going to defend their client, and factor that into the cost of insuring them." 

The insurance increases account for about 3.6 per cent of the changes in the city's most recent budget. The HRM is not the only municipality to see an increase. 

"We've certainly had a couple of conversations with municipalities within the region," said Dean. 

Costs for St. John's, N.L., rose 88 per cent, from $528,555 to $991,401, which Mayor Danny Breen called a "significant concern."  

Saint John, New Brunswick's insurance costs have already risen 26 per cent this year. That's according to a report from city staff, which said the insurance industry is in "a hard market not seen in 20 years." 

That number does not include the cost of insuring Saint John against cyberattacks such as one which held the city's website hostage in November. Saint John's communications staff said that cost won't be available until the city completely rebuilds its network. 

Cybercriminals have increasingly targeted large organizations like cities and hospitals, and Needler said last year HRM's insurance coverage was expanded to include risks from cyberattacks.

The city also expanded its coverage last year against terrorism and environmental impairment liability, which covers the city against certain types of pollution.

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