Nunavut Tourism works out affordable insurance deal

The head of Nunavut Tourism anticipates a boom in the territory’s tourism and outfitting businesses, as the price of mandatory insurance for local operators plummets.

Nunavut Tourism’s CEO, Colleen Dupuis, said she expects to see 30 to 40 new tourism operators in Nunavut as a result of cheaper insurance premiums for her organization’s members.

For years, the high cost of liability insurance has been a formidable barrier to small businessmen hoping to break into Nunavut’s young tourism industry.

By law, tourism operators require $1 million in liability coverage to qualify for an outfitters license from the Government of Nunavut.

Dupuis said she’s heard of aspiring outfitters receiving quotes that their insurance coverage would cost $10,000 a year, putting it out of reach for many potential entrepreneurs.

Nunavut Insurance is offering a new liability insurance package at a much-reduced price to make it more affordable for Nunavut Tourism members to operate.

As part of a deal with Nunavut Tourism, Nunavut Insurance has created the “Small Operating Insurance Program”, available only to Nunavut Tourism members.

Nunavut Insurance has streamlined the paperwork that applicants need to fill out, bringing it down to five pages.

“It’s (the paperwork) been test-driven in all regions so people feel it’s simplified and uncomplicated,” Dupuis said.

So far it’s only in English, but Matychuk said the company is working on an Inuktitut version.

Insurance premiums should be around $1,000-$1,200 for basic, safe activities.

Riskier pastimes like hunting, kayaking or mountain biking will require higher premiums and supplementary paperwork.

Dupuis stressed the program is only available to businesses based in Nunavut, not outfitters whose main offices are outside the territory.

The primary targets are outfitters in the communities whose annual tourism revenues are between $20,000-$30,000, said Nunavut Insurance executive Chris Compton.

In exchange for the low rates, Nunavut Tourism is advertising the program to its members, as well as touting it as a perk for Nunavut Tourism membership.

Small businesses – making less than $50,000 a year – can apply to the Department of Economic Development and Transportation to pay for up to half their premiums.

Matychuk said applicants need to have up-to-date first aid training and wilderness first aid, a boating license, and other such qualifications depending on the activities they want to offer.

Owned by Nunasi Corporation, Nunavut Insurance bills itself as the only Inuit-owned insurance broker in Canada and is presenting the program as something of a public service to Nunavut.

Matychuk said his company is “not going to get rich on this.”

But, “we won’t sustain a financial loss,” he went on.

Matychuk said Nunavut Insurance used to offer a similar package from 1992-2002, the small operators liability program, but that changed in the wake of record claims in 2002.

“9-11 was at the time the largest insurance claim in the world,” he said.

Insurance companies all over the world were hit by the September 2001 terrorist attacks in New York City, and as a result companies backed away from insuring activities they considered risky or unusual.

For Nunavut Insurance’s parent company, the global insurance giant Lloyd’s of London, that included outfitting.

Dupuis said the Government of Nunavut tried to address the high costs of insurance in 2007 with an insurance fund in the department of finance for outfitters to subscribe to, but no-one applied.

The premium to buy into the fun was $3,500, with funding available from Economic Development and Transportation to pay half.