Stratford council will consider an amendment to the city’s business-licence bylaw that would, if approved, increase the minimum commercial general-liability insurance requirement from $2 million to $5 million for all business-licence types.
Stratford businesses could soon see an increase in their monthly insurance costs if Stratford council amends its business licensing bylaw with a recommended increase to the minimum commercial general liability requirement from $2 million to $5 million.
Appropriate insurance coverage is presently a condition imposed on outdoor cafes, refreshment vehicles and auctioneers only, but staff indicated the city’s insurer recommended the bylaw’s insurance coverage requirement apply to all business license types while suggesting the minimum general liability coverage be bumped to $5 million.
“For the past few years, the city’s insurer has been recommending such increased insurance requirements for the city when it comes to third-party relationships,” Stratford deputy clerk Chris Bantock said at a short public meeting held Monday evening to give the public a chance to comment on the proposed amendment.
“This is mainly based around industry trends and increasing liability risks. … While implementation of this has been gradually introduced across the organization … flexible wording in the bylaw did allow staff to roll out increased insurance requirements for the outdoor cafés as part of the 2022 patio program. To continue the rollout, staff received clarification from the city’s insurer that it would be prudent to have the same requirements apply to all business types. Overall, the city’s insurer feels the $5-million requirement would better protect the city should an incident occur.”
Expanding on that point, director of corporate services Karmen Krueger explained the average claim against a business is no longer $2 million and, as there is the potential for the city to be named as a secondary party in a lawsuit against a local business, Stratford itself could end up paying the lion’s share of a civil settlement.
“If there’s a claim made where it names two parties or more, the deeper pockets often get (saddled) with most of the settlement amount,” Krueger said, “so it’s really just to spread the risk between the parties involved.”
The suggested increase in minimum coverage, he added, would benefit business owners because “they’re carrying sufficient coverage in the event there’s a claim against them.”
“We’ve received feedback from our insurer and also our legal counsel (saying) $2 million is not an average claim anymore. Claim sizes are quite a bit larger than that,” Krueger said.
The only members of the public to speak at Monday’s meeting were Charlie Whitlock and Santanna McClain, co-owners of Lucky Chance Tattoo & Piercing Studio, a business they opened on Wellington Street in November 2021.
Both McClain, the studio’s piercer, and Whitlock, a tattoo artist, told council they put everything they had into opening their business and are worried that additional coverage requirements as proposed would add as much as $400 to their monthly insurance premiums, assuming they can find coverage with $5 million general liability at all.
“Raising our insurance will definitely raise our monthly costs and make it harder for us to give our best to our clients,” Whitlock said.
McClain said soaring inflation has had a tremendous impact on small businesses, so “adding another expense to the constantly rising price of doing business could be the end of us.”
It’s just the two of us putting all of our energy into this small shop. We want to keep putting in as much as we can so when you get tattooed or pierced, there’s no doubt how it will turn out,” McClain said.
The proposed bylaw amendment will be included on the agenda of a future infrastructure, transportation and safety subcommittee for further discussion.
In the meantime, Stratford council passed a motion last month extending 2022 Stratford business licenses until March 31, so councilors have enough time to consider the amendment before licenses need to be renewed.