Background. If a vessel is involved in an incident in Canadian waters, victims can claim for death, personal injury and property damage up to certain liability limits. For larger vessels (300 metric tonnes and up), these limits are set by the Convention on Limitation of Liability for Maritime Claims. Limits for smaller vessels are set by the Canadian Marine Liability Act. Under the Act, ship owners are liable up to a maximum of C$500,000 for property damage and C$1 million for loss of life or personal injury — values that haven't changed since 2001. Amounts are subject to periodic review and we expect them to double in 2022.
Impact. If you own, operate or manage a small ship, your insurance premiums for incidents in Canadian waters are based on existing exposure limits. Once limits increase, your exposure will increase as well, but your insurance may not cover the difference.
Top tip. Review your insurance policy with your broker to ensure that when the new limits come into effect, you have coverage up to the new liability limits.
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