Ontario snow removal companies forced to hike prices or shut down amid 6-figure insurance rates

Ontario snow clearing businesses continue to face soaring, six-figure insurance rates that's driving many to shutdown or hike prices to stay open.

Christopher Thacker, owner of Mr. Mow It All, a Toronto business that pivots each year from lawn care to shovelling driveways for about 500 customers, has seen his insurance premium increase from $5,000 in 2016 to $70,000 last year and $110,000 this year.

"It's passing the costs along to customers and that's the troublesome part," Thacker said. "Now this year, we're dealing with inflation and stuff, but even in the last couple of years, we've had to just keep increasing rates."

Insurance rates for snow removal companies have dramatically increased in recent years as more people have filed more slip-and-fall lawsuits against them, said Marsh Insurance broker David Amadori. Damages can range from as low as $500 to more than $100,000 depending on the injury.

And it's the businesses' insurers who are taking on the cost to defend them, even if the cases are thrown out.

"Over the last two decades, these insurers have been operating at a loss," Amadori said. 

Some insurers have stopped providing coverage altogether while others have increased premiums to maintain a viable business case, he said. Meanwhile, people filing lawsuits can now often do so at no personal cost or risk, as personal injury lawyers, who heavily advertise their services, agree to only be paid if they win a settlement.

The province passed new legislation in January meant to cut back personal injury lawsuits, giving people only 60 days to file a claim instead of two years. But it will still be at least another year before insurance companies determine if Bill 118 has worked and adjust premiums, Amadori said. 

Tony DiGiovanni, executive director of the Landscape Ontario Horticultural Trades Association that represents 700 snowplow operators, said insurance rates now commonly over $100,000 are damaging the snow clearing industry.

DiGiovanni says he gets calls every week from members leaving the business.

"Some were in tears because they couldn't get insurance period even though they had no claims," he said.

As for Thacker, he's noticed his competition's steadily declined from 20 companies to about four or five because of the cost of insurance.

"It's pushed a lot of the smaller competitors out of the way," Thacker said. 

And even though Mr. Mow It All is diligent about documenting its services and weather conditions at each site, and has a "fairly good claim history," it is still anticipating even higher insurance rates in the new year, he said.