In this issue of Managing Risky Business, read about:
- 2021-22 Renewal Highlights: Renewal packages are now on their way. Read about what to expect and how the current state of the market and other external factors influenced our negotiations with underwriters
- COVID-19 Survey: A big thank you to those who filled it out and an explanation on why we asked you to do it again
- Program Claims Since November 2020: Read about claims trends; how we’ve performed this year as a group; and how we can reduce claims and keep our residents and buildings safe
- New Resources to Go Smoke-Free and Implement Mandatory Tenant Insurance Easily: Going smoke-free and introducing mandatory tenant insurance are great ways to controlling risk and saving money. Including wording in your tenancy agreements is the first step to do this. We have sample wording to help you get started.
- In the News: Media coverage on recent claims, plus interesting stories about emerging risks and managing risk
2021-22 Renewal Highlights

If you have had to make capital repairs or have been building a new development during the pandemic, you will have noticed a dramatic increase in the cost of building materials. According to Statistics Canada, the price of lumber increased by 68% between March 2020 to March 2021 while fabricated metal products and construction materials rose by 9%. In addition, overall demand for residential construction has increased because of low interest rates and (prospective) homeowners’ a desire for more living space. These costs have led some municipal governments to request action from senior levels of government. This is not an issue that relates to Canada alone, as insurance experts have noted. In terms of our particular program, this has meant that total insured values have had to rise by 5% to reflect higher property repair and replacement costs and property valuations.
An additional, broader force on the property component of your insurance relates to climate change. Severe summer fires remain an ongoing factor due to property losses and damages; these don’t just affect Canadian underwriters but extend internationally. Both this, and rising construction costs, have meant that demand for insurance continues to exceed supply — the hard market continues.
As we noted in our webinar in May, we have also seen an increase in employment practices and liability claims. This has had an impact on Directors’ and Officers’ liability premiums. If you haven’t seen the webinar, we encourage you to review the best practices covered in it and our guide on Directors’ and Officers’ Risk. In spite of our efforts to manage underwriter concerns relating to COVID liability claims (see below), this has also remained a factor in how underwriters price risk.
All of these factors contributed in our negotiations and informed our results. We believe our longstanding relationships with both domestic and international underwriters helped soften the impact. We were able to hold the group property premium increase to an average of 7% for providers. However, underwriters requested an increase the total claims trust fund of $1M. We believe the increase in the fund is a fair concession since It affords the possibility of end-of-year surpluses and better opens up opportunities to make recoveries via subrogation. These dollars are reinvested in the program and better help us moderate costs in the longer term.
Throughout the negotiation process we received tremendous support from our sector-led insurance reference group. We’d like to thank them for their time. We’d also like to thank the team from Marsh, who are working hard to release the renewal packages now.
Should you have any questions about renewals, please feel free to reach out to the HSC Insurance team at insurance@hscorp.ca
COVID-19 Survey
This year underwriters again requested that we have group members complete a survey regarding their COVID-19 /contagious diseases protocols and processes.

The purpose of the survey, like last year, was to be able to demonstrate the stringent processes housing providers have in place to protect both tenants and staff from COVID; and by doing this, we are able to continue the liability coverage we need at a reasonable cost and without any exclusions for COVID-related claims.
Like last year, response from the group was excellent: nearly 100% of the organizations that use our insurance program submitted surveys. Thank you to those housing administrators and property managers who took the time to fill out the surveys! Your efforts continue to make a difference.
Program Claims since November 2020
So far in the 2020-21 term, we have logged 140 claims with a total dollar value of $15.9M. Thankfully only one claim has exceeded the Claims Fund thresholds ($1M for smaller providers, $2.5M for larger). This was a $4M claim that was caused by careless smoking in January.
Because of this fire, careless smoking represents the most costly category of fires this year. That said, fire claims overall continue to be the most frequent and costly cause of claims; we have had 71 fires this year incurring almost $13.4M.


While overflows represent the second most common source of claims this year, they are comparatively inexpensive – with the four electrical claims costing almost double.
Thankfully both claims costs have declined since earlier in the policy term:

The frequency of claims has hovered between 10 and 20 claims this term, though September has been a quiet month so far.

While additional claims between now and October 31 are inevitable, we are hoping that the total cost of the claims for the policy term remain within the $16M (the Claims Trust Fund limit). Claims performance plays a significant a role in determining our premiums. This doesn’t just include claims that the underwriters must pay for but also the volume of claims generally – since this is an overall measure of the risk they take on.
We can never stress enough the importance of implementing safeguards to prevent claims. These include:

- Making buildings smoke-free – we have sample wording for your tenancy agreements (below) and offer a discount on your insurance costs
- Implementing mandatory tenant insurance to both protect tenants and offset the cost of claims for housing providers (sample wording for your tenancy agreement below). HSC also offers a discount to smoke-free providers
- Regularly inspecting and maintaining fire safety equipment, including smoke detectors – we have a monthly premises safety inspection checklist and an electrical maintenance guide to help you implement best practice procedures at your building
- Having a contingency plan on site and ensuring that your property manager knows and understands it – our contingency planning guide can help you get a headstart in creating one for your organization
If you’ve got questions about making your buildings safer, we’re happy to help. Contact us at insurance@hscorp.ca

New Resources: Go Smoke Free and Implement Mandatory Tenant Insurance Easily
Introducing mandatory tenant insurance and/or making your building smoke-free are two ways to lower your premium and mitigate risk. Now we have resources to make this easier – we have sample wording that you can use in your tenancy agreement to introduce these policies.
Smoke-Free Housing Ontario also offers a good resource guide on how to support the introduction of a smoke-free policy.
We would like to thank Ottawa Community Housing and Smoke-Free Housing Ontario for sharing these resources.
In the News

Here are the claims that have received news coverage since our last update.
August 2021
- Malfunctioning air conditioner cause of Newmarket townhouse fire
- Cause: Appliance malfunction
- Residents rescued from fire in Centretown apartment building, Ottawa
- Cause: Arson
- Faulty plug-in A/C unit likely cause of John Street fire, Chelmsford
- Cause: Appliance malfunction
- Fire marshal called to early-morning blaze on Mountain, Hamilton
- Cause: Unknown
- Attempted murder charge laid after Moosonee fire: OPP
- Cause: Arson
July 2021
- Suspicious fire on Wharncliffe Road North, London
- Cause: Arson
- Smokey fire forces tenants from highrise, London
- Cause: Arson
June 2021
- Two people injured in fire on Roger Stevens Drive in North Gower, Ottawa
- Cause: Under investigation
- Two displaced, one sent to hospital following Wilson Street fire in Kingston
- Cause: Careless smoking
- No injuries after fire at Hess Street South apartment causes $100K in damage: fire chief, Hamilton
- Cause: Under investigation
May 2021
- Firefighters rescue pet from blaze in south Ottawa
- Cause: Under investigation
- Centretown fire sends one to hospital, Ottawa
- Cause: Under investigation
- Seniors rescued from fire on eighth floor of Golden Age Apartments, North Bay
- Cause: Under investigation
- One woman taken to hospital following fire in Minnow Lake, Sudbury
- Cause: Appliance malfunction
April 2021
- Firefighters rescue individual from Bay Street blaze, Sault Ste Marie
Cause: Careless smoking - No injuries following townhouse fire in Peterborough south end
Cause: Unknown - Police make another arrest in relation to fatal fire on Bruce Avenue that claimed three lives, Sudbury
Cause: Arson - No injuries in Arundel Street fire, Thunder Bay
Cause: Under investigation - Tenant rescued from second floor of Peterborough townhouse fire
Cause: Explosion
March 2021
- Smoke alarm credited with saving the life of a London woman
Cause: Careless smoking - Woman hospitalized after Mississauga apartment fire, Peel
Cause: Careless smoking - One person dead following Mississauga apartment fire
Cause: Under investigation - East-Windsor fire ruled accidental
- Woman dead following early morning west end house fire, Guelph
Cause: Under investigation - Townhome destroyed in overnight fire on Hamilton Mountain
Cause: Under investigation