Liability Insurance update

[sockeye]

Not sure if this has been discussed but Transport Canada has made a number of changes to the Marine Liability Act which became effective June2023
These changes included increased limits of liability amounts for pleasure craft owners involving personal injury and property damage
Typical insurance policies in Canada had included protection for these losses up to $2 million ,as the prior limitation for boats up to 300 gross tonnes was $1.5 M
The new legislation has increased liability to $2,250,000 for vessels including pleasure craft under 300 gross tonnes
Our club in Vancouver BC has now requested all members increase their liability insurance to $3M .I wrote to our agent and within two days they

increased our policy to $3 million with no extra charge
I suspect $3 million liability will be the new minimum at marinas and reciprocal clubs in BC

 

[porman]

I wonder how this affects boaters from the US when visiting Canada.

 

[O C Diver]

Not sure if this works in Canada, but in the USA it's significantly cheaper to have a million of liability coverage on the vessel and have a personal umbrella policy for the additional millions. My policy has a line item addition for my boat, under $100.

Ted

 

[sockeye]

Not sure how it affects vessels visiting Canada.I have been travelling for several months and as soon as i got home i received this request to increase our coverage.
We were also told to ensure our coverage included wreck removal,3rd party vessel damage ,polution cleanup costs.they added that home insurance policies (which i think you are referring to as "umbrella insurance " typically do not include these items.
When i have gone to reciprocal clubs they have always asked for confirmation of $2M coverage (up to last year) I would anticipate everyone will be aware of the legislative changes and will insist on compliance . What i found interesting was our insurer instantly agreed with our request and increased coverage at no extra premium.

 

[O C Diver]

We were also told to ensure our coverage included wreck removal,3rd party vessel damage ,polution cleanup costs.they added that home insurance policies (which i think you are referring to as "umbrella insurance " typically do not include these items.

Maybe it works differently in Canada. Umbrella policies in the USA cover liability for all sorts of things including boats, aircraft, recreational vehicles, automobiles, and yes homes. Some items such as boats, aircraft, and RVs require additional premiums. The primary policies are generally reviewed and then Umbrella policy issuer can then stipulate increases on portions before covering it with the umbrella limit. So if the umbrella underwriter isn't satisfied with the amount of wreck removal coverage, it will need to be increased before the umbrella will cover the boat.

Ted

 

[sockeye]

OC Diver

Your correct ,I have no idea how insurance works in the USA
but if your visiting Canada your policy should have the coverage

suggested for your protection and the protection of the places you visit.Given how litigious the US is I would think it would be prudent for our US neighbours to have more coverage than we do. Out of interest is this umbrella policy attached to your house ,your boat or is it a separate policy altogether ?

 

[STB]

Sockeye,

Think of it as a high-limit personal liability policy. It coveres you for any liabilities other policies dont or above the limits of other policies. But, it picks up after any other coverage you have is exhausted and it is required that you have a threshold level of coverage for certain exposures, e.g . Vehicles, vessels, homes, businesses, etc, or those exposures will be excluded. Normally, for the umbrella to dovetail with the coverage for these types of exposures, all the policies need to be from the same provider.

 

[sockeye]

Stb

Do these umbrella polices typically cover $3million liability (in this case Canadian dollars ) .Thats really all I'm trying top point out is the new changes to the legislation .If it does ,it doesn't matter how you get there.

 

[O C Diver]

Couple of points:

These policies don't generally offer coverage for businesses. So buying the coverage to cover your trawler when you want to rent it out, won't work. Same for Uber and Lift driving.

Generally the policy coverage is bought in millions. One through 3 are pretty easy to get. 4 and 5 often require history with that company at lesser amounts. When you get in the 10 to 20 million, there are fewer willing to write it.

Interestingly, the first million is the most expensive and from there the price decreases per million. Above 5 million, I'm told there is a meaningful jump up as most of the big name companies don't offer it.

As mentioned above, it's a standalone policy that picks up after your primary policy has paid. Your primary has to meet underwriting qualifiers for the umbrella and there may be an additional premium.

An interesting side note: The umbrella covers things not normally coverable (so rare that no one writes insurance for it). As an example: you hit a pedestrian while riding your bicycle. Your liable and your covered. I own my boat slip. Technically I own the submerged property where my boat docks. While it's extremely unlikely that anyone would be hurt on it, if oil starts seeping out of the mud and I'm responsible for it's cleanup, I'm covered.

Ted

 

[MYTraveler]

Not sure if this works in Canada, but in the USA it's significantly cheaper to have a million of liability coverage on the vessel and have a personal umbrella policy for the additional millions. My policy has a line item addition for my boat, under $100.

Ted

Are you able to name an additional insured on your umbrella policy? If not, how are you able to accommodate marinas, etc., that require more than $1M of coverage under your policies? My umbrella carrier will NOT provide that coverage, but that may be due to the high limits of liability I maintain.

 

[O C Diver]

Are you able to name an additional insured on your umbrella policy? If not, how are you able to accommodate marinas, etc., that require more than $1M of coverage under your policies? My umbrella carrier will NOT provide that coverage, but that may be due to the high limits of liability I maintain.

My Chubb policy has the my marina listed as additionally insured. My umbrella policy raises the limits of my liability on the Chubb policy to the limit of the umbrella. As my Chubb policy covers me for any marina I go into, the umbrella raises that limit as well.

My umbrella agent reviewed my original policy (before it was Chubb) and had no problem with the two marinas I listed as additionally insured.

Not sure I understand how your umbrella policy picks and chooses the liability limits? If your boat insurance policy covers you for any damage you do with your boat, whether to a marina, other boats, or a combination of both, dosen't your umbrella policy automatically raise that limit?

Ted

 

[STB]

Not sure I understand how your umbrella policy picks and chooses the liability limits? If your boat insurance policy covers you for any damage you do with your boat, whether to a marina, other boats, or a combination of both, doesn't your umbrella policy automatically raise that limit?

My umbrella coordinates with my boat policy for boating related exposure, but has a rider that limites coverage for fuel oil spills to an amount, while still much, much, much more than my boat policy, is also significantly less than the umbrella's limits for all other covered exposures.

I can only imagine that they've determined that the expected value of paying out for truly massive claim is much higher for a fuel oil spill than for the other covered risks, so, rather than pricing it in, they decided to exclude it.

I asked the agent what it would cost to remove that cap, and was told it wasn't going to happen, that he figured they'd paid on that one too many times and had no way to manage the cost of that type of thing.

I haven't pushed back at all, because I am comfortable with the coverage and it is still above marina requirements.

But, at least in my case, the "how" is that they limited coverage by listing an amendment number at the bottom of the policy document coverage page and including a small document, bearing that number, detailing the limit.

 

[rslifkin]

If I remember correctly, there's a cap on how much you can be held liable for in the event of a spill cleanup. Somewhere just shy of a million I think, so policies generally cover up to, but not beyond that limit.

 

[Northern Spy]

If I remember correctly, there's a cap on how much you can be held liable for in the event of a spill cleanup. Somewhere just shy of a million I think, so policies generally cover up to, but not beyond that limit.

In Canada, non-oil tanker oil spills are limited by the tonnage of the ship. <300 Gt is $500K liability. The rest is covered by a claim to the Ship Source Oil Pollution Fund.

As the OP wrote in the first post, in Canada the federal government changed the Marine Liability Act and increased the cap (for vessels <300 gross tons) for property damage at $750,000 and personal injury or death to 1.5 million; making the increased limit 2.25 million. Add on interest or recoverable legal cost and 3 million seems to be prudent.

Wreck removal claims still remains uncapped.

Marine Liability Act

 

[STB]

If I remember correctly, there's a cap on how much you can be held liable for in the event of a spill cleanup. Somewhere just shy of a million I think, so policies generally cover up to, but not beyond that limit.

That makes sense, because the cap on my policy is a weird number just shy of $1M. I guess my agent got the reason wrong!

 

[STB]

Indeed. I just looked. $939,800.00 via the Oil Pollution Act of 1990

 

[SteveK]

I wonder how this affects boaters from the US when visiting Canada.

I moor in a marina that does a lot of transient US boats. I will ask them if an overnighter has to provide proof of insurance. I know I have never been asked for proof of insurance when visiting other Canadian ports and while it has been a few years never got asked in US marinas.

 

[CaptJoe360]

Talked to my boat insurance agent in Seattle. They're getting LOTS of calls on this issue. Bottom line: getting $2-3M liability on a boat is almost impossible and extremely expensive. Much easier and cheaper to get a $3M umbrella policy from your home or auto company. That's our plan before we head north this year.