Canada: Towards Automated Automobiles: Shifting Liability Exposure In The Insurance Industry

Last Updated: November 25 2015
Article by David A. Nicol and Cynthia Aoki


Imagine a world where there are no drivers, only passengers riding in self-driving vehicles. Although this world has not yet arrived, current trends and technological advancements have allowed for more automated features in vehicles.

How can the insurance industry adequately adapt to these changes and developments?

Since the 1970s, the number of injuries resulting from automobile collisions has fallen by over 30% and the number of fatalities has fallen by 40%. The reason for this decline is that safety features that only existed in luxury vehicles 20 years ago, like anti-lock brakes and traction control, are now available as standard features on most vehicles. Airbags became widespread in the early 1990s, and have advanced from driver-side airbags to passenger, rear, and side deployment airbags.

Despite these decreases in injuries, the amount of money spent by Canadians on insurance premiums has been increasing over the past 40 years. This inverse relationship is due to the significant increases in the amount of damages awarded in automobile collision claims.

Towards a More Automated Automobile

Future developments, allowing for more automation in safety features, will likely continue to reduce the number of accidents each year. Presently, only a small number of luxury vehicles include features such as forward-collision avoidance, lane departure warnings, "autopilot" systems, automated parking, and adaptive cruise control. However, in the next five to ten years, these automated features will likely become widespread and standard in most vehicles.

According to the Insurance Institute for Highway Safety ("IIHS"), more than 20% of 2014 models now offer a front crash prevention system with automatic-braking capabilities. More importantly, the IIHS has found that if all passenger vehicles were equipped with forward collision and lane departure warning features, blind spot detection, and adaptive headlights, one in three fatalities and one in five injuries could be prevented or mitigated.

Potential Decrease in Rear-End Collisions

The automated forward-collision-avoidance system uses elaborate cameras or radars, which can measure the speed of the vehicle in front of it and determine whether there is a risk of a collision. Some systems will only alert the driver of the danger, but other systems, such as Automatic Emergency Braking ("AEB"), will automatically apply the brakes in emergency situations.

Given that one in four automobile accidents are rear-end collisions, the adoption of forward-collision avoidance systems and AEBs could help to significantly decrease these types of accidents.

On September 11, 2015, the National Highway Traffic Safety Administration and the IIHS announced that 10 major vehicle manufacturers, representing 57% of light duty vehicle sales in 2014, have committed to making AEBs a standard feature on all new vehicles. The widespread introduction of this feature will have a massive effect on the number of accidents and injuries from automobile collisions.

The adoption of these automated features will impact the insurance industry and the personal injury bar in the years to come. As such, insurers and lawyers will need to creatively respond to these changes in order to stay competitive.

Shifting Liabilities

As long as there is still a driver in the vehicle, that driver will likely remain liable for an at-fault collision, even in the event that automated safety features fail. However, with an element of automation in the operation of the vehicle, there is now the potential for manufacturers to incur liability.

Product liability will extend to manufacturers, design engineers, and retailers who make defective products available to the public. These parties can be held liable for injuries caused by those products. In introducing new safety features, automobile manufacturers have extended their duty of care and have potentially exposed themselves to liability when these systems fail.

Similar to a situation where a braking system fails or an airbag does not deploy, automobile manufacturers will face liability exposure when an automated avoidance system fails to react in time to prevent a collision. The driver who is sued after such an at-fault accident may have the ability to bring a Third Party Claim against the manufacturer of their vehicle. Alternatively, an injured party faced with an underinsured defendant, may choose to add the vehicle manufacturer as a co-defendant for an allegedly defective automated avoidance system.

There have not yet been any cases before the Canadian or American courts addressing the shifting of liability with respect to automated automobiles.

However, as we move forward, the Courts will likely grapple with the following questions:

  • How much will an at-fault driver be expected to rely on these automated safety features?
  • Will there be new expectations in terms of distracted driving?
  • How will these automated safety features fare in Canadian weather?
  • Who will bear the liability in cases of unavoidable accidents?

What Changes are Ahead for Insurers?

In the face of dramatically lower accident rates and increased competition for shrinking premiums, insurers will need to be aware of the impact these automated safety features have on a driver's risk profile.

Some insurers now offer discounts on their premiums to individuals who own vehicles containing features such as passive immobilizers, which help to reduce theft claims. 

Similarly, insurers with clients who own vehicles with automated safety features will likely see a decrease in pay-outs for injury claims. As such, insurers will want to act quickly and creatively to capture market shares of these individuals. This will allow insurers to further reduce insurance rates and attract clients in a competitive marketplace.

Fully Automated Cars

In the background of all these automated safety features is the inevitable introduction of fully autonomous cars.

Google has been working on its self-driving car project since 2009 with the intention of releasing its car to the public in 2020. In September 2015, Google unveiled an automatic self-driving vehicle with no steering or braking systems. Instead, passengers simply entered the vehicle, input a destination, and the Google car was able to drive itself.

To compete with Google, Apple has tripled the number of engineers working on its self-driving car project. Reports indicate that Apple is aggressively planning a targeted "ship date" of 2019 to release their fully automated vehicles.


On October 13, 2015, the Ontario government announced that they will be launching a pilot project to allow the testing of automated vehicles on its roads.

Realistically, it will likely be a couple of decades before fully autonomous vehicles constitute the majority of vehicles on Canadian roads. However, we have already begun, and will continue, to see some of the legal effects of partially automated vehicles.

Both the insurance industry and the personal injury bar will need to be cognizant of these trends and will need to prepare for a future of increased competition and leaner budgets. A dramatic reduction in accidents will likely force counsel to be creative in finding ways to shift liability towards the manufacturers of these automated vehicles.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

David A. Nicol
Cynthia Aoki
Events from this Firm
19 Dec 2017, Webinar, Calgary, Canada

McLennan Ross previously conducted a webinar on June 6, 2017 about the passage of Bill 17, during which we reviewed the changes to the Employment Standards Code and the Labour Relations Code. During that webinar, we identified a number of issues which would depend upon the language of the Regulations, which had not yet been developed.

21 Nov 2018, Webinar, Calgary, Canada

Changes to the Employment Standards Code this year increased the number of unpaid leaves to which employees are entitled for the purpose of allowing them to deal with family related issues.

Similar Articles
Relevancy Powered by MondaqAI
Howie, Sacks & Henry
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Howie, Sacks & Henry
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions