Lax e-scooter insurance spells trouble for Canadian municipalities

Based on what’s taking place in other jurisdictions, lawsuits over accidents involving e-scooters will likely rise in Canada – particularly in Alberta, British Columbia and Ontario, where some municipalities permit their use on public streets, park trails, or sidewalks.

Municipalities are already having issues finding affordable insurance. But some may be at further risk of liability exposure for not enforcing bylaws around e-scooters, one source tells Canadian Underwriter.

The portability and easy access to e-scooters makes bylaw enforcement daunting. Absent higher levels of resources and funding, that’s not likely to change, says Jeff Weidman, a partner at law firm Clyde & Co. in Calgary.

“In several municipalities, there are regulations saying e-scooters may be used in areas such as bike lanes, quiet sidewalks, quiet neighborhoods. But it’s quite vague. That might be in parks and recreational areas, in bike lanes involving other bicycles, motorized or more traditional bicycles. Really, [accidents] are happening everywhere,” he says.

At some point, this inconsistent municipal enforcement could become a problem.

“What will this [eventually] look like for potential liability against municipalities? Are the municipalities that make these regulations, and perhaps failing to enforce them, putting themselves at risk for liability?” Weidman asks.

“As e-scooters become more prevalent in cities across North America, we’re going to see some creative drafting of lawsuits to involve as many parties as possible, because insurance [coverage] for the operator is not a clear-cut issue and, in fact, remains in doubt.”

Lack of clarity

Insurance-wise, e-scooters are a grey area. Websites selling the vehicles often contain links to third-party websites where buyers can obtain insurance coverage. But there’s no way to quantify how many scooter buyers actually purchase insurance.

“Most of the public won’t even think about insurance on e-scooters because it is such a novel means of transportation. They haven’t thought about it when they purchase or when they rent them. That’s a big problem,” says Weidman.

Describing e-scooter rental agreements as “very company friendly,” he says it’s safe to assume most users don’t bother to read the fine print or understand their potential liability in case of an accident.

“The public are left to their own devices in terms of there being no regulation on speeds other than what you might find on a municipality’s website,” he adds. “Who’s enforcing that, and who is enforcing where the scooters are being used, the speeds [at which they’re] being used or whether helmets are being used? There appears to be an overall lack of enforcement.

“Where I live in Calgary, the minimum age [to ride e-scooters] is 18 but if you look around the city in the summer months, there are users noticeably under the age of 18. Again, it comes down to who is regulating [and] who’s enforcing that regulation.”

E-scooter exposures 

So far, legal actions primarily revolve around e-scooters colliding with pedestrians, cyclists and motorists, Weidman says.

“Many involve personal injury claims, property damage claims,” he tells CU. “Those claims and lawsuits will include disputes over liability and quantum of damages, and will involve issues such as contributory negligence, which is a big issue in terms of the behavior of the e-scooter operators, and adherence to traffic laws.

“These legal issues are becoming more prevalent in Canada when assessing liability for e-scooter accidents.”

Most lawsuits are brought by e-scooter riders themselves – or by those who collide with them. And that’s where an inability to tap insurance makes things tricky.

“Oftentimes, when there isn’t an insurance pot of money, it dissuades claims, at least in the volume of claims that you might see otherwise,” Weidman says.

Feature image by iStock.com/viaductk