Burned down Cape Dorset high school teaches harsh insurance lesson

The school’s insurer was not informed of a costly renovation project in the past

Insurance News

By Lyle Adriano

A high school in Cape Dorset, whose facilities burned down last year, is struggling to claim an insurance payout after it was found that the academy did not notify its insurer of a premises overhaul years prior.

In 2010, Peter Pitseolak High School underwent an extensive renovation and expansion project that cost over $17 million—a fact that was not reported to the school’s insurer. It was only after the fire that occurred last year that officials with the finance department discovered that Peter Pitseolak was severely underinsured.

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News of the burned-down school’s latest developments came during a review of Bill 21, the 2015-2016 Write-off of Assets Act, CBC News reported.

“What happened with that project is we found out that the $17,335,054 had not been communicated to the insurance company,” Finance Minister Keith Peterson told members of the Legislative Assembly yesterday. “When the school burned down, we learned that it was under-insured, so we couldn’t put a claim in for the remaining value of the school there, the book value.”

Unfortunately for Peter Pitseolak, its insurer is demanding that the provincial government pay for a deductible, as it was the latest in a series of school burnings in recent memory.

“There have been three schools in the past that had burned down, I believe,” Peterson explained. “The insurer decided that there would be a $10-million deductible. In essence, we were to become self-insurers.”

MLA David Joanasie questioned Peterson on how and why the insurance blunder happened, and on what can be done to avoid such a situation in the future. Peterson answered that the departments of Finance and Community and Government Services “quickly moved to remedy the issue” by investigating the value of buildings against their insurance records.

“I’m pretty sure we’re OK there and all the buildings are adequately covered for insurance,” Peterson reassured.

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