Canada: A Race To The Finish – Insurers Line Up For Uber's Business

In the last quarter of 2015 two insurers, Aviva Canada1 and Wawanesa Insurance2, were reported to be cancelling personal auto policies for drivers who were using their personal vehicles to pick up passengers for hire.

In contrast, on September 8, 2015, Intact Financial had announced it had entered into a "cooperative agreement" with Uber to develop a tailored insurance product to address the insurance gap in coverage for UberX drivers.3 However, over four months have passed since the announcement and there has been nary a detail and no confirmation that anything has been filed with the Financial Services Commission of Ontario (FSCO) - the provincial regulatory body that oversees the Ontario insurance industry.

In the interim, it would appear that Aviva Canada has reconsidered its position. On January 6, 2016, the insurer announced that it will launch an insurance product for part-time, casual UberX drivers as early as February 2016. According to Aviva, it will work with regulators across Canada to find solutions to the ride-sharing insurance coverage issues4 and confirmed that the new policy would be an "add-on" (endorsement) to existing personal auto policies.

According to the insurer, its proposed policy addition will protect ride-sharing drivers from the moment they turn on the Uber app through to collecting and dropping off passengers. This would appear to eliminate the previous awkward scenario advanced by Uber where the driver's personal auto policy was supposed to respond during the "intermediary period" – where a driver was waiting for a pick up request.

According to Aviva, coverage will be based on transporting eight or fewer passengers, holding a valid driver's licence for six years, no other intended commercial purpose and for ride-sharing drivers who want to work up to a maximum of 20 hours per week. Should a driver want to drive more than 20 hours per week, he or she will require a commercial auto policy.

The cost for the additional coverage would be a calculation based upon the income earned by the driver, considering such factors as time spent working, area driven and driving record. It has been suggested that the monthly cost of the coverage will be approximately 10-15% of the driver's average monthly income.5

However, like Intact, nothing has been formally filed with FSCO by Aviva. As such, it is unlikely that anything will be in place in the near future and certainly not by February.6

As it currently stands, the standard personal auto insurance policy (OAP 1), which was created and mandated for all Ontario auto policies by FSCO, contains explicit language that prohibits commercial activity with a personal auto policy. Thus, a change to the text of the standard auto policy would be required in order for coverage to be extended to those who use their personal vehicles for commercial purposes. The other, less amiable option, would be to continue with the current standard auto policy language but permit an endorsement that would override the specific excluded risk of carrying passengers for hire. This appears to be the avenue Aviva is suggesting in their press release. This arrangement would be permissible under section 227(2) of the Insurance Act.

It is clear that there remains a real and verifiable gap in insurance coverage in the way current ride-sharing programs operate in Ontario. The insurance gap has been acknowledged by FSCO. On March 24, 2015, FSCO released a cautionary info-graphic drawing attention to the exclusions in coverage applicable to drivers and passengers of ride-sharing services.7 Kristine Hubbard, spokesperson for Beck Taxi, stated that Aviva's announcement highlighted the lack of proper insurance of UberX drivers.8

Uber Canada continues to claim that "every UberX ride is covered by insurance."9 According to Uber Canada's website, their drivers' personal insurance policy are primary coverage and Uber's commercial general liability (CGL) policy with an endorsement for standard non-owned automobile coverage is secondary. Uber maintains that this arrangement provides adequate and compliant coverage. The Ontario regulator, the Insurance Bureau of Canada, as well as insurance companies, do not agree.

John Pecman, Commissioner of Competition for the Competition Bureau of Canada, said "the arrival of ride-sharing services presents an important opportunity for regulators - an opportunity to inject increased competition into the taxi industry by creating a single, level playing field for all."10 Toronto's Mayor John Tory has indicated that the City will introduce regulations to level the playing field between taxi drivers and ride-sharing drivers in 2016.11 Draft regulations are expected to be before Toronto City Council by Spring 2016.12 Also of interest, UberTaxi was recently granted a taxi brokerage licence by the City of Toronto on January 22, 2016.13 The brokerage licence does not affect or apply to the ride-sharing UberX service.

Insurance companies appear to be clambering to be first to market with an insurance product to address the insurance coverage gap. It is doubtful that Aviva Canada will make its February 2016 timeline. We should expect something by Spring/Summer.

There are now two horses in the race but we will likely see the field expand quickly as other insurers seek to gain entry into this burgeoning market.

Footnotes

[1] "Insurer cancelling policies of UberX drivers ", Betsy Powell, The Toronto Star, October 31, 2015. Source: http://www.thestar.com/news/city_hall/2015/10/31/insurer-cancelling-policies-of-uberx-drivers.html

[2] "Insurer asks policy holders: Are you driving for Uber?", Betsy Powell, The Toronto Star, December 26, 2015. Source: http://www.thestar.com/news/city_hall/2015/12/26/insurer-asks-policy-holders-are-you-driving-for-uber.html

[3] Intact Financial Corporation. Press Release: IFC and Uber have entered into a cooperative agreement to develop tailored insurance products for the Canadian marketplace, September 8, 2015. Source: http://www.intactfc.com/English/media/press-releases/press-release-details/2015/IFC-and-Uber-have-entered-into-a-cooperative-agreement-to-develop-tailored-insurance-products-for-the-Canadian-marketplace/default.aspx

[4] Aviva Canada. Press Release: Another industry first – Aviva Canada to offer personal coverage for ride-sharing drivers, January 6, 2016. Source: https://www.avivacanada.com/article/aviva-canada-offer-personal-coverage-ride-sharing-drivers

[5] "Aviva Canada says ride-sharing insurance coming in February", Alastair Sharp, Thomson Reuters, January 6, 2016. Source: http://uk.reuters.com/article/us-canada-insurance-ridesharing-idUKKBN0UK1ZI20160106

[6] "Aviva to offer insurance for UberX drivers", Oliver Sachgau, The Toronto Star, January 7, 2016. Source: http://www.thestar.com/news/gta/2016/01/07/aviva-to-offer-insurance-for-uberx-drivers.html

[7] Financial Services Commission of Ontario. Infographic: "Caution: Ride-Sharing", March 24, 2015. Source: http://www.fsco.gov.on.ca/en/auto/Pages/ridesharing-info.aspx

[8] Ibid. "Aviva to offer insurance for UberX drivers".

[9] Uber Canada. "Frequently asked Questions: Insurance", accessed: January 15, 2016. Source: http://www.driveuber.ca/faq

[10] Government of Canada, Competition Bureau. "Competition Bureau calls on regulators to modernize taxi industry regulations", November 26, 2015. Source: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04006.html

[11] Ibid. "Insurer asks policy holders: Are you driving for Uber?".

[12] "Aviva Canada's ride-sharing insurance could solve major headache for Uber", Lucy Nicholson, The Globe and Mail, January 6, 2016. Source: http://www.theglobeandmail.com/report-on-business/aviva-canada-says-ride-sharing-insurance-coming-in-february/article28031853/

[13] "UberTaxi gets a brokerage licence despite ride-sharing controversy", Jennifer Pagliaro, The Toronto Star, January 22, 2016. Source: http://www.thestar.com/news/gta/2016/01/22/uber-gets-a-taxi-brokerage-license.html

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
McCague Borlack LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
McCague Borlack LLP
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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