Any business in Ontario with a physical location where employees, visitors, and clients attend needs to have occupier’s liability insurance to protect them in the event a person becomes injured on their property. While this insurance can cover anything from accidents involving faulty steps, elevator mishaps or slippery flooring, one issue, in particular, affects any business located in a cold climate: snow and ice removal.
Most businesses opt to hire third-party snow removal companies to ensure their parking lots, sidewalks and entrances remain safe and clear for pedestrians after a major snowfall or during icy conditions. However, due to the rules surrounding civil litigation for slip and fall injuries, it has become increasingly difficult in recent years for businesses and snow removal companies to secure adequate insurance coverage for incidents involving snow and ice.
Why Snow and Ice-Related Accidents Pose a Problem for Businesses and Insurers
Under the previous legislation, anyone making a claim for injuries suffered in a slip and fall incident due to snow and ice had two years to notify the defendants of the claim. With the injury tied to ephemeral conditions like excess snow or poorly managed icy walkways, this meant that the conditions would have changed many times over during the limitation period. Further, it could make it more difficult to track down potential witnesses or obtain security footage that may have been able to show what occurred.
According to Canadian Underwriter, claims of this nature often settle before going to court, with settlements usually ranging from $70,000 to $270,000. Most contracts between a commercial enterprise and a snow removal company contain a clause that shifts liability for any damages resulting from a fall to the snow removal company. As the volume of claims has increased significantly in recent years, insurers have begun to respond by increasing premiums for snow removal companies. One snowplow operator claimed their premiums had increased from $16,000 to $52,000 annually. In many cases, the costs of insurance have become so onerous that some companies can no longer afford it. Even when the cost is manageable, some insurance companies have stopped issuing policies altogether, viewing it as too big a risk.
What are the Changes Implemented Under Bill 118?
Under the new rules, any person making a claim against an occupier (e.g. a commercial tenant or business owner) and/or against a third-party snow and ice removal company for injuries suffered due to snow and ice must notify the defendant(s) within 60 days of the injury. The notice must be in writing and must include the details of the incident such as the date and time it occurred. The notice must be served personally or sent via registered mail. Notably, the new time limitation does not apply if the incident resulted in a person’s death.
The original proposal was to limit the notice period to just 10 days, however, many objected, claiming this placed too onerous an obligation on the injured party. It would be difficult to fully assess the extent of an injury in such a short time, let alone discuss the matter with a lawyer and serve written notice on potential defendants. As a result, the key players settled on a 60-day notice period.
The change in the notice period will be key for defendants, providing greater opportunity to investigate such a claim by interviewing witnesses, and reviewing surveillance footage. Under the previous timelines, both of these would have been much more difficult if nearly two years had passed since the incident.
Changes Welcomed by Occupiers, Insurers and Snow-Removal Operators
For many, the changes mean that claims stemming from injuries due to snow and ice will be easier to defend, and will therefore reduce the liability of tenants, property owners and snow removal companies. This, in turn, is expected to make insurance more accessible and affordable for commercial clients, allowing snow removal companies to once again operate in full force.
The changes have also been heralded by insurers, as the following statement from Colin Simpson, the CEO of the Insurance Brokers Associaton of Ontario indicates:
Brokers across Ontario have been hearing from policyholders that availability of snow removal insurance for their businesses was scarce to non-existent in some regions, meaning some operators wouldn’t be able to secure the necessary liability insurance to cover their business this winter, and therefore would be unable to operate. Bill 118 establishes new criteria around snow removal liability that will encourage insurance availability to return in Ontario.
The lawyers at Prudent Law in Mississauga are diligent advocates for both corporate and individual clients in civil litigation matters. They provide practical advice and experienced representation in a variety of matters. If you are facing a legal dispute, and you’d like to discuss your options with one of our experienced corporate or litigation lawyers, please call us at 905-361-9789 or contact us online.