Canadian Nursery Landscape Association (CNLA) members, who may have had insurance coverage for their snow and ice removal operations cancelled or were not offered a renewal due to insurance claims, know all too well the apparent fickle nature of commercial insurance. In a typical insurance market cycle, when insurer profits are up and capital is flowing into the industry, risk appetites expand, growth becomes the focus, and pricing discipline sometimes falters. The cumulative result of these actions is that, over time, insurers may experience losses and corrective measures such as those mentioned above may be taken.

How then does a business owner, whose expertise is in horticultural trades and not insurance, maintain stable and reliable insurance for their business? The answer is that the CNLA and its membership are uniquely positioned to help mitigate the effects of the insurance market cycle by creating a stable and long-term insurance program with the potential for fewer pricing fluctuations and claims.

How can this be accomplished in the immediate term?

• Group Buying Power – Group buying is made possible through the size of CNLA’s membership.
• Risk Management Practices – Provide advice to members on “best practice” risk management practices to help reduce or avoid claims altogether through education and learning modules (e.g. online driver training).
• Acceptance Standards – Ensure that CNLA members entering the program are adhering to an agreed level of risk management in their businesses.
• Contract Management – Ensure that new entrants to the program are using appropriate snow and ice removal contract language.
• Centralized Claims Management – Allow for a consistent approach in which members can expect to receive feedback and education from claims as part of the ongoing risk management education available through the program.

How can this be maintained in the long-term?

• Working relationships with key stakeholders such as building owner/management groups should be investigated to help control and manage liability transfer.

The benefits of building a risk management culture in your business extend far beyond the world of commercial insurance. Taking advantage of group buying power when purchasing insurance, may result in broader coverage terms and lower premiums. Key risk management best practices such as implementation of driver training programs are also beneficial in the case of ministry audits (e.g. by the Ministry of Labour or Ministry of Transportation). Consideration should also be given to alternative risk financing options on a group basis (i.e. a group funded deductible or group captive insurance solution). These are just some examples of how good risk management decisions also make good business sense.

Dan Winstanley is a Client Executive with the Consumer Practice of Marsh Canada Limited. For more information or to receive a quote under the CNLA Horprotect Insurance Program administered by Marsh Canada Limited, please contact Dan directly at daniel.winstanley@marsh.com, 416 349 4601, or toll-free at 1 888 949 4360.

15/06/12