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The hospitality industry, already struggling under COVID-19 restrictions, is facing a new challenge: insurance.
According to Jim Bence, president and CEO of the Saskatchewan Hotel and Hospitality Association, insurance is becoming a bigger issue than the novel coronavirus for association members.
Bence said insurance costs have been rising for a number of years, but the COVID-19 pandemic has made premiums more costly than ever and insurance difficult to find. Even when coverage is available, he said premiums can be prohibitively high. According to Bence, the policies of 35 association members weren’t renewed, leaving their future hanging in the balance.
“Overnight that turned into a crisis for these 35,” Bence said on Gormley. “Without insurance you can’t operate, and you certainly can’t keep your mortgage.”
Bence said the association lobbied governments and insurers to help secure coverage for their affected members, but despite their best efforts six businesses were left completely uninsured. Left without any options, he said these businesses will be closing their doors Saturday.
Bars and taverns in rural areas have struggled the most to secure adequate insurance, Bence said, but warned that hotels in large and mid-sized markets will likely face similar challenges soon.
“Our big assets, the hotels that are in our downtown centres and mid-size markets, they will be trying to get renewed December 1, and it sounds like all the criteria that have been applied to our smaller operators will be applied to them as well,” Bence said.
According to Bence, new models for insurance are being developed in other sectors, such as the condo industry where insurance has also become an issue. He said he would like to see that work happening in the hospitality industry as well, but until an industry-wide solution can be found, he expects more businesses to close.
“It’s something that’s just going to build in strength and severity as each month goes on,” Bence said.