Peterborough city council will consider a staff report that recommends hiking the required liability insurance coverage for alcohol-serving businesses that participate in the downtown patio program from $2 million to $5 million, while recognizing the increase may mean fewer business will be able to participate in the program.
Councillors will review a report from the city’s infrastructure, planning and growth management commissioner Blair Nelson and finance and corporate support services commissioner Richard Freymond when council meets as general committee on Tuesday evening (February 18).
Last February, council voted against a city staff recommendation that would have increased the required insurance coverage to $5 million for all Peterborough businesses seeking a patio extension licence in 2024.
During that meeting, some councillors expressed concerns about the impact of increasing the minimum insurance coverage on businesses that operate smaller patios and those that don’t serve alcohol. In addition, the Peterborough Downtown Business Improvement Area (DBIA) told council as many as 15 patio licence holders that had participated in the program in 2023 would be unable to do so in 2024 if they were required to obtain $5 million in liability insurance coverage.
Although council decided against increasing the insurance requirement for the 2024 patio season, they asked city staff to return to council with a report on a “tiered approach” — one which would accommodate smaller patios or unlicensed patios — for the 2025 season.
According to the report council will consider at Tuesday’s meeting, city staff reviewed patio program information from various municipalities and consulted with the Peterborough DBIA and business owners on potential changes to the patio program. The report presents three different insurance coverage and permit fee options for the patio program in 2025.
The first option would maintain the status quo, with a commercial general liability insurance requirement of $2 million and a fixed patio permit fee of $400 — an increase of $100 from 2024.
“Although Option 1 presents an increased risk to the municipality should there be a claim which exceeds the $2 million limit, it also presents an administratively simple framework for downtown patios that supports downtown business growth and the downtown’s attractiveness for investment, tourism and culture,” the report states.
“Based on survey information collected from past permit holders and data collected in previous years, there may be a decrease in patio permit applications should the minimum insurance requirement be increased from $2 million to $5 million.”
The second option, which is the one city staff are recommending, would maintain the $2 million insurance requirement for unlicensed businesses with patios but increase the insurance requirement to $5 million for licensed businesses with patios. A fixed patio permit fee of $400 would be in effect.
“Administratively, this option is expected to require more staff resources compared to Option 1 and may result in some confusion for applicants in determining the insurance requirements for their business,” the report states.
“It is anticipated that some businesses which are licensed to serve alcohol may be deterred from applying for a downtown patio permit as they may need to increase the insurance coverage for their business. Based on information provided by patio permit holders in 2024, it appears that only three of the alcohol-serving businesses would meet the $5 million (commercial general liability) minimum. Reduced participation in the patio program could have a negative social impact on the downtown as the patios add vibrancy and increase the sense of safety for visitors and residents.”
The third option would have the same insurance requirements as the second option, but would have different patio permit fees depending on whether a patio is “bistro style” with one or two tables with four seats each, or a larger patio. Bistro-style patios would have a permit fee of $300 and all other patios would have a permit fee of $500.
“Administratively, this option requires the most staff time compared to Options 1 and 2 as additional resources would be needed to determine the permit cost and insurance requirements on a case-by-case basis,” the report states. “Option 3 may result in confusion for applicants and cost uncertainty at the time of application and could result in delayed permit approvals should applications be filled out in error.”
As noted, city staff are recommending that council approve the second option, where only licensed businesses operating patios where alcohol is served would be required to have $5 million in commercial general liability insurance.
“Option 2 intends to balance the social benefits of the patio program with key risk management considerations,” the report states. “Option 2 proposes an increased insurance requirement for licensed businesses which reflects the increase level of risk to the city when there is alcohol being served on city-owned lands.”
“While there is still a level of risk associated with non-licensed businesses, staff are supportive of maintaining current insurance requirements in an effort to balance the risk management needs with the social benefits of the patio program.”
The report reiterates the city is “assuming a certain level of risk” by not adopting an across-the-board $5 million commercial general liability insurance requirement for all businesses participating in the patio program.
“The corporation would be responsible for any financial costs which may arise should there be a claim which exceeds the $2 million coverage,” the report states.
According to the report, the city issued 15 patio permits in 2024 — a decrease of six from the previous year due to scheduled downtown road reconstruction during the summer that meant some on-street patios could not be approved.
In 2025, road resurfacing work is scheduled in the spring along Hunter Street West, including the so-called café district between George and Aylmer streets where lane closures have been implemented in the past few years to facilitate the patio program and to create more pedestrian space. Lane closures will not be possible until the expected completion of the road work in early June.
“Staff are committed to working with affected businesses to ensure that patios can be permitted and installed once the proposed construction works are completed,” the report states.
Items endorsed by general committee on February 18 will be considered by council for final approval the following Monday. All council meetings are streamed live at www.peterborough.ca.
