The Township of Wellington North learned Monday evening that the cost of insurance is going up – way up.

Bill Nelson of Padfield Nelson Insurance Brokers met with council to explain the 27 per cent increase in the total premium for 2010 – estimated at $233,323, up from the 2009 premium of $184,246.

Mr. Nelson quipped that he was “standing close to the back door (while making his presentation) for a reason,” noting that his annual visit to council over the past several years was much more pleasant because the insurance premiums had remained pretty much stable. There was even a slight decrease one year in the premium while maintaining the same level of insurance coverage. But, Mr. Nelson said, “the more you have, the more you have to insure, and the more it costs to insure it.”

The total value of properties owned by Wellington North and covered in the policy has increased considerably – the new sewage treatment plant in Mount Forest and swimming pool in Arthur were given as examples – and the increase also includes an estimate of the overall increase in the replacement cost of all buildings owned by the township. In a report to council, Treasurer John Jeffery said the total value of the properties covered in 2010 is $63,782,000, up from $48,616,000 in 2009.

But, insuring buildings in only one aspect of the insurance coverage needed by the municipality.

Personal injury claims against the township have been minimal over the past several years – Mr. Nelson lauded Wellington North for the “very responsible attitude of staff and managers of the departments (for) consistently good management (resulting in) very few claims”. But settlements for personal injury claims have been escalating from historical settlements in the $3 to $5 million range to current settlements in the $10 to $15 million range. As Mr. Jeffery pointed out in his report to council, “courts tend to look a the municipal defendants as having ‘deep pockets’ that can be tapped to provide long term care for claimants.”

He and Mr. Nelson also pointed out “the impact of the Negligence Act in increasing the township’s exposure to liability costs. If the township is held to be even one per cent at fault and the other defendants are unable to respond to the award, the township is responsible for the shortfall of the others.”

Mr. Nelson pointed out that it is not yet know how the implementation of the Harmonized Sales Tax will affect the insurance industry but in the future the tax will probably result in an increase in legal fees and all costs associated with claims.

While a premium increase of 27 per cent is substantial, Mr. Nelson said some townships, even in Wellington County, are facing insurance premium increases of as much as 50 per cent.

Mr. Nelson, along with Steve Smith of Frank Cowan Company Limited, had met with the township’s finance committee last month reviewing the 2010 insurance program and the coverage available. At Monday’s meeting Treasurer John Jeffery suggested “with reluctance” that council accept the 2010 insurance renewal program as presented.