Archive: 2008-09 Season

Risk Management Critical to Stable Insurance Costs

Posted: July 08, 2009

In 2002, OFSC insurance premiums increased overnight and almost made obtaining liability insurance coverage for our trails impossible. We survived only after several years of intense effort, establishing new initiatives to better control our own destiny, and developing the first comprehensive risk management program in organized snowmobiling.

OFSC premiums never returned to the lowest levels we previously enjoyed, but they became more affordable after we assumed the lion’s share of the first level of claim risk. However, we cannot assume that we are out of the woods on premium increases or reduce our level of vigilance, caution and compliance. We are also still at the mercy of how economy impacts the financial health of the insurance industry.

At the April board meeting, Secretary-treasurer Brenda Welsh advised the governors that costs associated with OFSC General Liability insurance coverage are on the rise again and will require additional resources. This increase is primarily attributable to two main factors:

1) The OFSC is being required to significantly top up its Insurance Deductible Fund to account for potential settlements associated with pending claims. This is the aforementioned first level of claims risk now assumed by the OFSC.

2) In addition, the OFSC is incurring more legal and adjustor fees to aggressively defend every claim, as directed by the clubs at AGM. This approach has succeeded in making many claims go away that might previously been paid out. It also saves us considerable dollars from our Insurance Deductible Fund over the long run and protects our future insurability, but costs more out of pocket today.

One result of the increased insurance costs is that the Board of Governors has approved a return to the 2007/08 level for the club cost of a full season trail permit. This decision is in line with the Board’s intention of reflecting current insurance costs in the permit fee to clubs. The Board reduced the fee in 2008/09 to reflect the then declining cost of insurance coverage, but that savings is no longer available, so the fee has changed accordingly.

The OFSC continues to do everything possible corporately to control and reduce insurance costs. We remind clubs that it is absolutely essential to continue to protect our insurability by complying fully with all risk management policies and requirements. After all, the incidents from which claims may arise can occur anywhere in the province, so we all have to stand guard to provide court-ready evidence to defend organized snowmobiling wherever attacks happen. Every time we can make a claim go away or win it in court makes it that much more difficult, arduous and expensive to initiate new claims against us.

Together, we need to send out the clear and unequivocal message that the OFSC, its clubs and volunteers are not easy marks and that anyone should think long and hard before taking us on.

Source: MainTrail, June 2009  
 

Paudash Trail Blazers Snowmobile Club, P.O. Box 130, Apsley, Ontario  K0L 1A0
Phone: (705) 656-2292   Fax: (705) 656-2602   Toll Free: 1-800-385-8644   info@paudashtrailblazers.on.ca