Canadian Underwriter

Freedom Convoy camps may raise coverage questions

March 7, 2022   by Philip Porado

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While Freedom Convoy protestors are no longer blocking Ottawa intersections, not all of them have left the capital area.

The CP, CBC and other news outlets have reported smaller groups of protestors have remained in the Ottawa area, camped primarily on farms. One local mayor told CTV News that the campers were obeying local bylaws, including obtaining permits for outdoor fires, and stressed the camps were on private property.

Still, camps on farmland may create a situation that could change the insured’s status, said Doug Morrow, CEO of RiskTech Insurance Services in Edmonton.

He noted it’s an issue of material risk because an insurer is reasonably entitled to be advised of changes in a property’s use. Those changes would be material to an insurer’s decision to accept the risk, its ability to rate for the use of the land, and its ability to consider and charge appropriate premiums.

“Failure to advise an insurer of such a material change in risk would likely have the effect of rendering the existing policy of insurance voidable at option of the insurer,” he said.

Should the policy remain in force, a loss associated with the originally stated use of the land wouldn’t be an issue, he added, but a loss resulting from the new exposure would likely be denied.

“The problem is that many losses are not this black-and-white,” Morrow said. “And in the grey areas where perhaps the new land use exacerbated an original insured exposure, this would also be subject to a denial of coverage.”

Morrow said it would be in landowners’ best interests to advise their insurance carriers of any change in exposure that’s unknown to their insurance carrier.

While this form of insurance doesn’t appear to fall under the now ended Emergencies Act, which acted “to cause insurance to be terminated without notice at the option of the Federal Government,” ne noted, it’s possible an insurer wouldn’t accept the change in use and risk.

In that case, the insurer would move to cancel coverage and provide 14-days’ notice by registered letter. Then, a landowner could either arrange replacement coverage, or seek to remove the changed exposure and then apply for reinstatement within that 14-day notice period.

“It is worth mentioning that in this last circumstance, there would be no guarantee that the original insurer would reinstate, even if the exposure was removed,” Morrow said.

With spring arriving, it may not come to that. The Ottawa Citizen noted warming weather and snow melt may soon lead farmers to ask campers to vacate before their fields are damaged.


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