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For the restaurant industry, already battered by closures, decreased revenue, essential changes to their business model and more, skyrocketing insurance rates may just be the last straw. It’s been a year of trials for everyone. For those who work in or own restaurants, though, there’s been little in the way of good news for months. Now, as insurers raise premiums, change or cancel policies, restaurateurs are left to wonder, what’s next?
“Are you a bar or restaurant in Ontario? If the answer is ‘yes’ then the odds are that you will go out of business very soon,” wrote Stephen Reid, owner of The Dakota Tavern and Castro’s Lounge, in a Facebook post in September. “The insurance industry is not, with very few exceptions, renewing policies for bars and restaurants,” Reid continued. “Now that policies are up for renewal they refuse to provide insurance even to venues that have been in business for years with no claims.”
Reid’s story is one of many in the city and province. In an interview with the Globe and Mail, John Sinopoli, co-owner and executive chef of Ascari Hospitality Group, was also vocal about increases to insurance policies during the pandemic. A recent renewal quote for one of the company’s locations increased by more than 300% from last year. Businesses such as Ascari Hospitality Group’s restaurants require insurance by law in order to operate. “[I]nsurance companies have an obligation to provide us with that service at reasonable market rates. This is a clear case of COVID-gouging,” Sinopoli told the Globe.
In October, Premier Doug Ford vowed to take action to regulate the commercial insurance industry. “These people have made a fortune over all these years, and I've just had it with these insurance companies,” said Ford. “They need to come to the table [and] start supporting people.” Ford has said that he is working with Finance Minister Rod Phillips to implement regulations and help protect restaurateurs from cancelled policies and steep increases in premiums.
Toronto Mayor John Tory echoes the sentiment. “I fully support any action to be undertaken by the province to help address this,” he said in October. Adding that his goal was to “support businesses who are simply trying to be good and continuing customers of these insurance companies.”
As the pandemic drags on, restaurants, many now closed for indoor dining for the second time since March, continue to suffer. Without government intervention to regulate insurance hikes and cancellations, industry insiders fear that many restaurants, especially independently-owned spots, simply won't survive.