City makes insurance mandatory

Bruce Walkinshaw - Penticton Western News Published: December 29, 2009 6:00 PM

Those who design buildings, developments, subdivisions or other structures in Penticton will now be required to have insurance. Last week, council voted to amend city bylaws to require professionals to provide proof of professional liability insurance. The new rules are an attempt to limit liability to the city and to ensure that the professionals certifying the design and construction of infrastructure throughout Penticton would be held accountable should their work hold a catastrophic flaw. “We just want to work with professionals,” said Mayor Ashton, before the 5-1 vote. “Professionals make sure they are professionals and they have the appropriate instruments of protection not only for themselves but for the people that they represent.”

The issue came up during a discussion regarding OCP and zoning changes that would potentially allow an applicant to construct a subdivision development of single family homes and a city park along Dartmouth Drive at Green Avenue and Greenwood Drive. Residents voiced concerns that the development would be constructed on historically unstable lands in a silt bluff area. However, the developer said that his company would be using new geo-technical methods to stabilize the ground. Before giving final approval to the zoning changes, some councillors asserted, amongst other requirements, that the engineers crafting the geo-technical designs for the development should be required to carry a size-appropriate amount of liability insurance. Staff was asked to investigate. For their report on the matter, staff spoke with the regulating bodies of the various applicable professionals, some local professionals, other municipalities and with the Municipal Insurance Agency. Staff found that while many jurisdictions required proof of insurance, including Kelowna, only a few had specified the exact amount, and none had exceeded $1 million. The MIA supported requiring proof of insurance, although cautioning that the insurance would only be valid while the professional is practicing and paying their premiums. “Some municipalities have required that professionals undertake to maintain insurance for a specified period after completion of a project and also insurance is available for retired professionals,” said the report. However, it pointed out that there is no practical way of policing such a requirement without a large cost to the city. According to the report, neither engineers nor the architects’ governing bodies require insurance, although the engineers association does provide their members secondary insurance up to $100,000 a claim. “Both associations cautioned against mandating the amount of insurance due to the limitations placed on the industry,” said the report, however, it “noted that the current minimum amount of any insurance policy of this nature is $250,000, and simply requiring proof of insurance would require the professional to hold at least the minimum amount.”

Only Coun. Dan Albas voted against the motion. “We have heard from (staff) that there is no provable or standardization that they can do to say what is high risk and what isn’t, so I just think we are dealing with things that probably don’t,” said Albas. “I think buyer beware. I think if you deal with someone who is credible and who also has insurance you will probably do better. But I just think this is an imperfect solution.” Many of Albas’ fellow council members argued that while the new rules were indeed an imperfect solution, insisting that professionals at least carry insurance while they are working here would be better than doing nothing at all.