NUNAVUT - More small operators in Nunavut will now be able to afford liability insurance thanks to a new insurance program for small tourism businesses, according to Nunavut Tourism's chief executive officer.

The new small operators liability insurance program was announced on March 29.

Colleen Dupuis said the high cost of insurance was preventing many small tourism operators from conducting business in the territory during the past eight years. The events of September 11, 2001 resulted in massive payouts by insurance companies, which drove up the cost of liability insurance around the world.

"It was because that was the largest insurance claim in history kind of thing," Dupuis said. "It affected all insurance companies."

Dupuis said major insurance underwriters then began getting out of markets that were not considered "normal." Unlike car or house insurance, liability insurance for outfitters was not considered normal, Dupuis said.

"Outfitting tourism services, whether they're here or in Ontario or in Thailand, are not a normal insurance product," she said.

Liability insurance for small outfitters then rose as high as $10,000 for the mandatory $1 million liability insurance, depending on the services offered by the outfitter, Dupuis said.

In order to qualify for an outfitter license with the Government of Nunavut, operators must be insured for at least $1 million. Operating an outfitting business without a license is illegal in the territory, according to the Department of Economic Development and Transportation

A hunter who could have made $10,000 in the summer by taking tourists out on the land would have been prevented from doing so by high insurance costs, Dupuis said.

"You may look at making ten thousand dollars," she said. "If you have to pay three thousand for insurance, it's cost prohibitive to get involved in the industry."

Under the new program, insurance will now cost between $1,000 and $1,200 a year, depending on services offered by the outfitter, she said. Outfitters who make less than $50,000 a year will also be eligible to apply for a rebate through the Small Business Support Program of the Department of Economic Development and Transportation. The rebate covers 50 per cent of insurance costs to a maximum of $1,750.

Larger outfitters can also apply for a quote through the program, but will not be eligible for the rebate, Dupuis said.

"This insurance policy is available to all of our members and it will be cost effective at any price point, but it will not be as cost effective if you are a larger operator," she said.

The insurance will offer liability for $1 million, $2 million and $5 million. It will also allow outfitters to insure equipment such as snow machines and boats.

The application forms for the program have also been simplified to encourage participation in the program. The main insurance form is now three pages long while supplements are a page each, Dupuis said.

Members of Nunavut Tourism who have paid membership dues for the year are eligible for the program.

Dupuis said now that insurance is affordable she expects many more small outfitters will open businesses. There are currently 111 licensed outfitters in the territory.

"I expect this will increase substantially," she said. "It will make it cost effective for people to be able to participate in the tourism industry all over Nunavut."

"Tourism is one of the few economic sectors that every community can participate in," she said. "Every community has a uniqueness that makes it attractive for tourism."