Changes in Commercial Insurance

By: Grant Ostir

In a period that has left Canadian businesses and individuals with much uncertainty and instability, what is clear is that the commercial insurance marketplace is changing in notable and at times challenging ways.

“Insurers willing to support liquor-related businesses has seen a steady decline.”

Liquor liability continues to be an area of uneasiness for insurance providers across the industry. With rising litigation and medical costs, the frequency and severity of claims seen from businesses that serve or sell liquor has increased steadily over the past decade. As a result, the supply of available capacity from insurance companies willing to support liquor-related businesses has seen a steady decline in the past decade, notably accelerating in the past 18-24 months. Those still supporting the industry have applied increasing premiums and conversely often reduce the amount of coverage offered to bars and liquor stores. Coupled with the current global pandemic, this has created an unseasonably challenging marketplace for liquor primaries.

These conditions are not specific to BC, with notable difficulties for other regions of Canada. Differences in provincial auto regulations and litigation trends have led to variations in pricing and insurers covering risks across the country. In Ontario, with limited domestic and international insurers willing to write business for hospitality risks, the Business Insurance Action Team (BIAT) was created through the Insurance Bureau of Canada. This new resource was formed out of necessity, in response to the pandemic, to provide small businesses in the hospitality sector with a secondary resource.

Aging infrastructure and weather have also impacted claims in the industry, with water-related losses and electrical fires being areas of continued concern. This past year brought the fourth largest volume of catastrophic weather losses in Canada since 1983. Food service operations come with the challenges of a working kitchen, whereby housekeeping and fire protection are key. Maintenance as a whole can go a long way in mitigating interruptions to business as a result of breakdowns and other disasters.

“Successful operations are those best prepared to handle incidents when they arise.”

Successful operations aren’t always those that haven’t had any incidents, but are those best prepared in their planning to handle such incidents when they arise. Businesses that operate in the responsible service of alcohol have a duty of care to ensure their employees hold their “Serving It Right” (SIR) training, and those staff should be provided with annual training and support to ensure they are familiar with procedures if faced with an emergency situation or incident.

Specialized programs that offer coverage tailored specifically for liquor primaries are becoming more infrequent across the country. Western Financial Group is proud to partner with the Alliance of Beverage Licensees (ABLE BC) to administer the Hospitality Insurance Program (HIP) for licensed establishments. This program offers a unique and tailored solution for bars and liquor stores, by providing a comprehensive commercial insurance solution affording more stable rates, strength in numbers, and multiple value-added services not common within most traditional brokerage structures. The HIP was first created in 2011 and has continued to grow and evolve in the past decade to respond to the changing needs of the hospitality industry. Valued-added services, including risk management and in-house claims examining, provide participants with a centralized and proven structure, along with dedicated insurance advisors with years of experience in servicing hospitality risks. Reducing the frequency and severity of risk exposures for pubs and liquor stores is a fundamental focus for the program, in administering a best-in-class solution for the hospitality industry. For more information on the HIP, please feel free to contact our office at 1-800-665-8990 or log on to

Grant Ostir is Chief Business Development Officer at Western Financial Group.