TORONTO — A fierce winter, coupled with towering snowdrifts and icy sidewalks, can be a financial windfall for anyone with a pickup truck and a plow on the front.

But a proliferation of "slip-and-fall" lawsuits in Canada is melting away their profits as snow removal contractors struggle to deal with sky-high liability insurance premiums.

"Rates for snowplowers have gone up about 500 per cent over the past two years," said Rocco Scarano, a broker with Dynes Insurance Brokers in Richmond Hill.

"I've had small operators this winter who couldn't afford the insurance and simply quit clearing snow."

Bob Clark, manager at Amalgamated Landscaping in Toronto, said his company has had few slip-and-fall cases, but even so, its insurance rates have risen about 30 per cent this year to about $8,000.

"We just got served last week," he said.

Catherine Swift, president of the Canadian Federation of Independent Business, said liability insurance rates for small businesses across Canada have been climbing steadily for about two years.

"We're talking about an annual average increase in costs of around 30 per cent. That's a pretty big hit. There are definitely some that are (closing down) and there are also some operating without insurance," said Swift.

"But there are a lot more small companies that aren't using the insurance they have because they're afraid to make a claim ... the only reason some carry insurance is for cataclysmic events that could cost millions of dollars. If it's only $50,000, they'll just eat it."

When it comes to snowplow operators, Swift said slip-and-fall cases are rising and "being driven by litigiousness."
"Slip and falls are anathema to the snowplowing industry because everybody thinks they should get 30 grand for a slip and fall. These settlements individually aren't huge, but cumulatively, they're hugely costly."

Mark Yakabuski, Ontario vice-president for the Insurance Bureau of Canada, agrees that the number of slip-and-fall claims are on the rise.

"I don't doubt some of them are legitimate, but I can only say there's been a proliferation of slip-and-fall incidents," he said.

"You just have to go to any court today and look at the number of slip-and-fall incidents ... and there's a definite multiplication in the number."

As a result, snowplowing operations are forced to pay higher premiums for liability insurance, with some reportedly facing increases of up to 40 per cent.

"The premiums ultimately have to reflect the cost of claims associated with these policies," Yakabuski said.

That's a painful situation for businesses: in a survey of more than 2,000 small businesses conducted by the CFIB last June, a third responded their profitability has been "significantly harmed" by higher insurance costs.

Fraudulent personal injury claims are common in the insurance industry, Yakabuski said, but that's only one part of the story.

"It's not really a case of whether some are fraudulent and not fraudulent; it's probably more a reflection of changing society values," said Yakabuski.

"There was a time 15 years ago when most of the cases would have been thrown out of court. Today, we seem to be more tolerant of people making these sorts of claims without perhaps understanding that the buck has to stop somewhere and has to be paid, ultimately by everyone who's carrying insurance, especially those in the area of snow removal."

Ultimately, Yakabuski said, those costs are being borne by insurance companies.

"Not just the cost of the award ... but there are major legal costs in defending these claims, which are being picked up by somebody's liability policy," he said.

"Unless governments instruct the courts to limit the kind of lawsuits that can be brought to bear, you're going to see a continued escalation of these claims."

Swift and the CFIB suggests provinces tighten up legislation and cap personal injury awards.

"It would be nice if we could see a letup in the litigious approach to seemingly everything under the sun."