Trucks or vehicles used in freedom convoy blockades will have their insurance suspended, Deputy Prime Minister and Finance Minister Chrystia Freeland said in a press conference Monday.
For property and casualty insurance professionals, the federal government’s path may raise more questions than it answers. A lot remains unclear after Prime Minister Justin Trudeau announced he is triggering the Emergencies Act.
“As of today, a bank or other financial service provider will be able to immediately freeze or suspend an account without a court order. In doing so, they will be protected against civil liability for actions taken in good faith,” Freeland announced.
This order covers both personal and corporate accounts, Freeland said. “If your truck is being used in these illegal blockades, your corporate accounts will be frozen. The insurance on your vehicle will be suspended. Send your semi-trailers home.”
But what does that mean, exactly?
Bryan Yetman, president at First Durham Insurance, says insurers would usually have to follow a registered letter process before voiding coverage.
“Ontario’s auto insurance policy sets out pretty clearly what the provisions are to terminate a policy,” he says. “Usually that notice sets out the terms and conditions on how that has to happen, and usually it’s by registered mail with a certain notice period.”
It is currently unclear if the process for voiding policies will change with the invocation of the Emergencies Act.
“If that gives them the ability to trump provincial regulation, then my guess is it doesn’t really matter what the Ontario auto policy says,” Yetman adds.
Yetman says the federal announcement leaves some questions to be answered.
“It’s not clear to me — when they say ‘coverages suspended,’ do they mean is coverage suspended while the rigs are part of the protest? What happens when [the rigs] begin to say, ‘Okay, fine, we’re going to go home now, we’re going to vacate the city,’” he poses. “Does the coverage immediately get reinstated?”
It is also unclear how an auto accident causing personal injury would be resolved if a vehicle were to cause an accident while their policy was suspended.
“If that trucker didn’t have a policy, and the pedestrian didn’t have a policy to claim on, what would happen in that situation?” Yetman questions. “Having people who aren’t really clear as to whether they’re covered or not driving around doesn’t seem like a particularly good idea.”
Freeland also announced the federal government is broadening Canada’s anti-terrorist financing laws and laws targeting the proceeds of criminal activities to include crowdfunding websites, under the scope of the newly invoked Emergencies Act.
As of Monday, crowdfunding platforms as well as their payment processors must register with FINTRAC and report and “large and suspicious” transactions. Freeland said this will become a permanent requirement.
“We are making these changes because we know that these platforms are being used to support illegal blockades and illegal activity which is damaging the Canadian economy,” Freeland said. “This is about stopping the financing of these illegal blockades.”
“Insurance companies are financial service providers and it sounds like the mechanisms that government is putting into place will allow them to leverage this,” Yetman says.
Canadian Underwriter is awaiting further comments from industry experts. More information to come.