Insurance woes leave local business hanging

Posted: Thursday, January 02, 2003

Kenai Peninsula residents who enjoy the sports of rock climbing, ice climbing and mountaineering may soon find themselves between a rock and hard place when it comes to finding the tools of their trade.

Kemper Insurance Company has pulled out of Alaska leaving small businesses seeking other companies that can provide the same or similar policies.

Kemper had offered comprehensive combined packages that included liability for a store, the building, equipment and workmen's compensation.

After Kemper pulled out the store's insurance agent, Last Frontier Insurance NBA began the search for a new company. They found only two that provide this type of insurance, and both required significantly different rates or policies.

"Insurance has always been a problem," said Walter Ward the owner of Wilderness Way, a camping and outdoor equipment shop in Soldotna.

Ward said insurance has always been the store's second highest cost behind employee expenses.

"We can't afford to self-insure like the big guys can," Ward said.

"Big guys" being stores like Recre-ational Equipment Incorporated and Eastern Mountain Sports that have hundreds of stores nationwide. These larger chains often can self-insure, but for the small business, the risk of doing so could mean losing everything.

"For this type of coverage, the number of companies is small and still shrinking. One (company) wants double for the same policy and the other said no climbing stuff for the same amount."

Many climbing tools and equipment offer a product liability from the manufacturer, but this isn't enough to blanket a small business.

This comes as a stiff blow to Ward, who's seen this pattern in the past when five years ago a switch in insurance companies resulted in losing the option to rent skis and snowshoes.

"It's not a serious financial setback, but I feel bad for our loyal customers who climb," said Ward in reference to who this change will affect the most.

"I've exhausted my options trying to find a way around this, but I have no choice."

Wilderness Way will still sell carabiners, cut ropes and similar multi-use gear, but it will post a sign that states these items are not to be used for climbing purposes.

As for products like dynamic ropes, descenders and ascenders, technical ice axes, belay devices and climbing shoes, they will soon be removed from the store's shelves.

"From a business standpoint, we can't sell enough of that equipment for it to be cost effective (to carry the insurance)," Ward said.

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