PORTLAND, OR – The future of Oregon’s vital ski industry hangs precariously in the balance following the unexpected withdrawal of a key insurance provider, a move directly attributed to the state’s unique legal landscape concerning negligence lawsuits. Safehold Special Risk, a prominent insurer for ski resorts across the nation, has ceased operations in Oregon, leaving resort operators facing soaring costs and diminished options, with now only one such company reportedly remaining in the state.
Safehold cited elevated legal risks stemming from liability claims as the primary driver for its exit. Central to their concern is a 2014 Oregon Supreme Court ruling that significantly weakened the enforceability of liability waivers commonly used by ski areas to protect against negligence lawsuits related to the inherent risks of skiing and snowboarding.
Understanding the Impact
The decision by Safehold is a significant blow to Oregon’s ski areas. The insurer characterized Oregon as an “extreme outlier” in how its courts handle negligence claims against ski resorts compared to other states. This assertion is underscored by the company’s internal data: Safehold revealed that despite Oregon representing a relatively small portion of their overall business, the state accounted for half of the company’s payouts between $1 million and $10 million nationally. This disproportionate claims activity, the insurer indicated, made operating in the state untenable from a risk management perspective.
The departure of a major player like Safehold not only reduces competition but also signals to the remaining insurance market that Oregon carries a higher risk premium, inevitably leading to increased costs for resorts.
The Legal Landscape
At the heart of the issue is the 2014 Supreme Court ruling, which interpreted state law in a way that made it more difficult for ski resorts to use liability waivers as an effective defense against negligence claims, particularly those involving terrain park features or other design elements. Prior to this ruling, waivers were often considered a strong legal shield, acknowledging that participants accept the inherent risks of snow sports.
According to Protect Oregon Recreation, an advocacy group representing the state’s outdoor recreation businesses, Oregon’s current treatment of liability waivers is “unique” among western states. This divergence from regional norms places Oregon ski areas at a competitive disadvantage and, crucially, makes them a less attractive insurance market.
Industry Perspective and Rising Costs
The effects of this challenging insurance market are already being felt by resort operators. Andrew Gast, the General Manager of Mt. Ashland Ski Area, located just south of Ashland on the Oregon-California border, articulated these concerns during recent legislative testimony. While Mt. Ashland does not utilize Safehold for its insurance, Gast highlighted the broader trend of escalating costs across the industry.
Mt. Ashland’s insurance costs, Gast reported, have already surged by 129% over the past 12 years. Compounding this financial pressure, the resort is anticipating an additional increase of 30% this year alone. These rapidly climbing expenses divert crucial funds that could otherwise be invested in infrastructure improvements, safety enhancements, or keeping lift ticket prices accessible to the public.
Gast’s testimony was delivered in support of proposed legislation aimed at rectifying the situation: Senate Bill 1196. This bill seeks to align Oregon’s liability laws concerning recreational activities, including skiing, with those of other western states, effectively aiming to restore some of the legal protections that industry stakeholders argue were diminished by the 2014 court ruling.
Legislative Response and Uncertainty
Senate Bill 1196 represents the industry’s primary hope for legislative relief in the current session. Proponents argue that passing the bill is essential not only to stabilize the insurance market but also to ensure the long-term viability of Oregon’s ski resorts, which are significant economic drivers and providers of outdoor recreation opportunities.
However, time is running short for legislative action. The current Oregon legislative session is scheduled to conclude on June 29. The fate of Senate Bill 1196 remains uncertain, and without a legislative fix, the challenges posed by the adverse legal environment and resulting insurance crisis are expected to persist, potentially threatening the operations of ski areas across the state.
The departure of Safehold Special Risk serves as a stark warning sign, highlighting the urgent need for a resolution that balances legal protections with the inherent risks and economic realities of the snow sports industry in Oregon. The outcome of the legislative debate before the session’s end will likely determine the financial stability and operational future for many of the state’s ski destinations. The industry, employees, and skiers alike are watching the proceedings closely.
