COTA aims to reduce insurance costs for tour operators 

Risk management plans key but rates unlikely to drop to pre-9/11 levels

B.C. based tourism operators that have seen their insurance premiums and deductibles soar after Sept. 11, 2001 may be eligible for some relief from a new program offered through The Council of Tourism Associations of B.C. (COTA).

The program was introduced at a press conference on Friday, Feb. 25, and will be released to tour operators on March 15 with an online component and a guide for nature-based tour operators. Only 11 out of 50 identified nature-based activities will be covered in the first phase, and operators offering those activities will have to commit to creating a detailed risk management plan for their business.

"We have to crawl before we can walk with this," explained Will Harding, the media relations director for COTA. "We decided to focus on 11 activities to start with, based on our discussions with the industry. And because each business within those 11 activities has to be focussed on an individual basis, the savings are really going to depend on the operator, and how far into the risk management process they’re willing to go.

"Other savings are going to come from the insurers when they have a better understanding of their clients."

According to Harding, some nature-based tour operators in B.C. have seen their insurance premiums jump by as much as 500 per cent in recent years as a result of the 9/11 terrorist attacks, the stock market downturn in 2002, and other global events that impacted the insurance industry. In addition to rising rates, deductibles have also increased while the overall availability of insurance for tourism has declined – very few companies offer policies to tourism companies, and many operators are struggling to find a company that can provide the kind of coverage they require.

While Harding says it will likely be impossible to bring rates back down to pre-9/11 levels, he estimates that operators that follow the program, adopt risk management programs, and haven’t had any claims could benefit from up to a 20 per cent reduction in rates.

In a survey of 450 tourism operators, COTA found that rising insurance rates were hitting businesses more than any other factor. Nature-based tourism businesses were the hardest hit of the group, with 96 per cent of respondents reporting that liability insurance was insufficiently available.

COTA enlisted the assistance of its members, the provincial government, and insurance partners Shaw Sabey & Associates and Adventureinsurance.ca to develop the new insurance program for that sector. Eventually all 50 identified activities in nature-based tourism will be able to take advantage of the plan, but the 11 activities COTA is starting with represent a significant share of the market – especially for Whistler. The list of activities includes whitewater kayaking, whitewater rafting, canoeing, sea kayaking, ski touring, wildlife viewing, backpacking, hiking, bicycle touring, mountain biking and snowmobiling. All activities have to be guided to qualify for the program, and all companies have to be members of COTA.

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