On the evening of June 17, 2006 a fire broke out at the Abbott Boat Works on London Road.
Sarnia Fire and Rescue secured the scene and, with clouds of thick toxic smoke from burning boats filling the air, residents of nearby apartments were evacuated.
Firefighters managed to extinguish the blaze, and a few hours later the displaced went home.
But around 5 a.m. the next morning a second evacuation was ordered after another fire broke out on the property of the world-famous boat builders, causing even greater losses.
Abbott Boats sued the city.
In a statement of claim, the company sought $6 million in damages alleging the City of Sarnia, through its fire department, had failed to properly extinguish, control and avoid the spread of fire. The claim also named the Cineplex Entertainment Corporation, alleging it had allowed employees to smoke in an area beside the boatworks without proper controls.
The suit was finally settled last year and the terms are confidential. But we do know the Abbott boat fire is one reason that Sarnia’s insurers paid out a staggering $11.5 million in settlements and costs between 2011 and 2013.
Most resident don’t realize it, but Sarnia gets sued a lot. And when it’s at fault the municipality’s insurers pay for the mistakes made by firefighters and police officers, for “slip and fall” injuries occurring on municipal property, for flooding and basement sewer back-ups.
All across Ontario, insurance costs are rising at an alarming rate.
The City of Sarnia is insured by a co-operative called the Ontario Municipal Insurance Exchange. Unlike a private insurer, Omex is a not-for-profit exchange owned by its member municipalities, which pool their coverage and collectively share the risks and rewards.
Lately, it’s been all risk. In fact, city council agreed this summer to a “supplemental assessment” from Omex, essentially an insurance premium increase that will cost taxpayers an additional $600,000 over five years.
But as bad as that sounds, local taxpayers are actually getting a good deal from Omex – at least for now.
Between 2011 and 2013 when the insurer was paying out $11.5 million to settle lawsuits, Sarnia paid Omex $4.7 million in premiums.
In the case of the Abbott boat fire, city hall paid a deductible of $25,000 and Omex covered the rest.
Municipalities are getting sued more often, class action suits are complicated and costly, and extreme weather events are increasing in frequency.
The result is insurance costs are rising rapidly, and at this point there is no relief in sight.