Canadian Underwriter

Insurance lobby secures changes to Bill 18 in Ontario (vicarious liability)

October 17, 2006   by Canadian Underwriter

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Answering the lobby of several insurance groups and associations, the Financial Services Commission of Ontario (FSCO) has announced it is amending the Ontario Automobile Policy (OAP 1) and a number of related forms as a result of Bill 18, which deals with vicarious liability.
“Changes to these forms have been developed in consultation with stakeholders, including the Insurance Bureau of Canada, the Insurance Brokers Association of Ontario and rental and leasing groups,” FSCO announced in a statement on its Web site.
FSCO said “changes have been made to the OAP 1 to clarify that there is coverage for liability for an insured person (i.e., a person who has their own automobile insurance policy) in situations where the person rents or leases an automobile and is vicariously liable for the negligence of another person who drives the automobile.
“This situation can arise where an insured person rents or leases a car and then lends the vehicle to a friend, who is negligent in an accident while driving the car.
“If a liability claim is made against a driver, renter/lessee or owner of a rented or leased vehicle, coverage may be available from more than one automobile insurance policy. The OAP 1 has been amended to provide additional guidance on the order in which these policies will respond.”
Changes have also been made to the OPCF 2, OPCF 5, OPCF 5C and OPCF 27 forms.
According to FSCO, these changes include:
changes to the title and contents of some of the forms to reference rented or leased vehicles;
clarification that certain policies are issued to the lessee and not lessor;
amendments to reflect the new sub-limits for excess liability; and
clarification of the exclusion of liability coverage for excluded drivers.
“Please note that where the OPCF 5C is used in connection with a policy insuring a vehicle (e.g., a commercial vehicle) that is required by law to carry third-party liability coverage in excess of $1 million, the form provides for the ability to stipulate the appropriate third-party liability coverage amount.”
The revised OAP 1 and amended OPCF 2, 5, 5C and 27 are effective for new business and renewals effective on or after Jan. 1, 2007.
It is expected that changes to the OAP 1 and the endorsements will also be read-in to all policies in force on or after Mar. 1, 2006 the date the vicarious liability amendments in the Budget Measures Act, 2005 (No. 2) became effective.
Copies of the revised OAP 1 and OPCF 2, 5, 5C, and 27 are available on FSCO’s Web site at: The OAP 1 will also be published in a forthcoming edition of The Ontario Gazette.