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Municipal Liability and Insurance Costs

Backgrounder August 09, 2022

Municipal Implications

Rising municipal insurance costs continue to be a major concern for AMO members. Many municipalities in Ontario are reporting increases of more than 20%. These costs are being driven by a hard insurance market, climate change, increased litigation, and other factors.

Ontario’s joint and several liability system allows liability costs to be reassigned if a responsible party is unable to pay. In this case, the costs are assumed by the parties that can afford to pay, to ensure those suffering injuries or damages are taken care of. This can make municipal governments responsible for a much higher proportion of the costs than their responsibility for an incident – in some cases, municipalities may assume all costs. As a result, municipalities and taxpayers pay higher amounts for insurance in the form of rising premiums. To deal with this, municipal governments can pay more, reduce services, or forgo service enhancements that introduce more risk.

AMO seeks a solution that protects municipal taxpayers while also sensitively providing for the needs of victims of catastrophic loss incidents. In addition to joint and several liability reform, potential changes that could be explored include: a provincial fund for catastrophic losses to individuals that could limit municipal exposure to health costs; pooling of insurance amongst municipalities to lower costs; increased risk management in municipal service decisions; and increased road safety tools such as reduced travelling speeds and more automated speed enforcement.

While municipal governments await a meaningful legislative and/or policy solution to these concerns, councils continue to rely on property tax dollars to pay rising insurance premiums. This funding would otherwise go into improving and expanding needed services to residents and businesses. For municipal cyber insurance, it may be impossible for a municipality to even secure a policy from an insurer.

The Attorney General of Ontario is aware of issues regarding joint and several liability and increasing insurance costs for municipalities and announced an AMO-Ministry of Attorney General led Staff Working Group at the 2022 ROMA Conference. AMO and municipal governments continue to work with the Attorney General to find practical solutions to help municipalities.


Municipal governments have long been seeking liability reform. Importantly, municipal advocacy on this issue strives to ensure justice to injured parties that is proportionate to responsibility.

For more information, please see AMO’s Liability Reform paper or view our 2011 Managing the Cost of Risk Insurance survey results.

AMO will continue to advocate for solutions that help municipalities to afford insurance while protecting residents and businesses and the services they rely on.

Joint and Several Liability

If other parties are unable to pay, damages can be recovered from any defendant, even if they are deemed just one per cent responsible.

As a result, a fraction of fault can push municipalities to pay huge damage awards. Often, they are targeted deliberately as “deep pocket” insurers when other defendants do not have the means to pay.


Craig Reid
Senior Advisor