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New insurance requirements for commercial and public purpose ships that carry passengers

By BCShippingNews 21 December 2018
Transport Canada issues Ship Safety Bulletin...
Transport Canada issues Ship Safety Bulletin...

Purpose

This bulletin informs ship owners and operators of the new Regulations Respecting Compulsory Insurance for Ships Carrying Passengers.

As of January 11, 2019, the Regulations will require all commercial and public purpose ships engaged in the domestic carriage of passengers in Canada to maintain liability insurance coverage in a minimum amount of $250,000 multiplied by the passenger capacity of the ship. Operators who do not currently have a liability insurance policy will need to comply within 60 days after the regulations come into force.

Scope

This bulletin applies to:

  • Operators engaged in the carriage of passengers from one place in Canada to the same or another place in Canada, either directly or by way of a place outside Canada
  • Commercial or public purpose ships (where no fare is charged)

Background

Under Part 4 of the Marine Liability Act (the Act), ship owners and operators are liable for death or personal injury of passengers resulting from a marine incident.

Owners and operators also have the right to limit their liability. Specifically, liability is limited to 175,000 Special Drawing Rights (SDR) per passenger.

Section 39 of the Act allows the Government of Canada to make regulations that require operators to maintain insurance coverage. This ensures owners and operators have the financial resources to meet their obligation to passengers if an accident happens.

What you need to know

Who does this apply to?

If you operate commercial or public purpose ships that carry passengers from one place in Canada to the same or another place in Canada, either directly or by way of a place outside Canada, you must comply with the Regulations.

The Regulations do not apply to:

How much insurance will you need?

The Regulations will require you to maintain a minimum of $250,000 of liability insurance coverage, multiplied by the passenger capacity of the ship.

Operators determine the ship’s passenger capacity for the purposes of the Regulations. You should carry enough liability insurance to cover your full liability under the Act. This will vary depending on the value of the Special Drawing Rights (SDR) to the Canadian dollar.

By when?

If you do not have a liability insurance policy that covers death or personal injury to passengers, you will have 60 days, until March 12, 2019, to comply.

If you already hold a liability insurance policy that covers death or personal injury to passengers when the Regulations come into force, you will need to comply with the new rules when your current policy expires, or is cancelled or modified.

Proof of insurance

You will need to provide proof of insurance which shows you comply with the requirements, by request from a designated Transport Canada officer.

The proof of insurance is either:

  1. a Certificate of Insurance issued by an insurer (see attached), or
  2. a Certificate of Entry, issued by a Protection and Indemnity (P&I) Club that is a member of the International Group of Protection and Indemnity Associations

Proof of insurance may be in paper or electronic format. You must keep it on board the ship at all times.

If you are asked to provide proof and you cannot (for example, because there is not enough space on board to protect the certificate from the elements, or you cannot display the proof on an electronic device due to technical reasons), you will need to show us proof within 24 hours.

If you fail to provide proof of insurance, your ship could be detained or, on Summary conviction, you could be fined up to $250,000.

Requirements for fleets

If the liability insurance policy covers a fleet of ships, such as for fishing expeditions or outfitters, you must carry:

  • the certificate of insurance on board one ship, and
  • a copy of it on board every other ship in the fleet

The certificate of insurance must state:

  • the amount of insurance for each ship in the fleet, or
  • the amount that applies to the ship with the highest passenger capacity, and the number of ships for which that amounts applies, and
  • the policy provides the same coverage as a separate policy for each ship would

If a ship is exempt from registration requirements (per regulations made under the Canada Shipping Act, 2001), the certificate of insurance does not need to include its name and official number. If there is not enough room to list all ships in the fleet on the front of the insurance certificate, they must be listed on the back.