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Ontario Chamber of Commerce urges province to ‘engage’ insurance industry on coverage gaps in ‘occasional commercial use’


August 26, 2015   by Canadian Underwriter


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The Ontario government should “engage the industry” in order to address insurance coverage gaps in the “sharing economy,” which includes Uber, Airbnb, crowdfunding websites, peer-to-peer shipping services and tool libraries, the Ontario Chamber of Commerce said in a report announced Tuesday.

The Ontario Chamber of Commerce made recommendations on addressing regulation and insurance in the sharing economy, which includes services like Uber

In association with PriceWaterhouseCoopers (PwC) Canada, the Ontario Chamber of Commerce published Harnessing the Power of the Sharing Economy, which makes five recommendations to the provincial government.

One of those is to “engage industry to fill any gaps in insurance coverage” in the sharing economy. In addition to Uber – which lets consumers order and pay for passenger transportation – the “sharing economy” can “encompass everything from crowdfunding sites like Kickstarter to transportation companies like Autoshare and Zipcar, to hospitality platforms like Airbnb and VRBO (Vacation Rentals by Owner),” the Chamber of Commerce stated in the report. “Even more emergent and diverse examples include toy, clothing, and jewelry rentals, tool libraries, peer-to-peer shipping services, and peer-to-peer currency exchange.”

Providing adequate insurance coverage for such services is a concern for regulators, the Ontario Chamber of Commerce suggested in the report, written by senior policy analyst Andrea Holmes and Liam McGuinty, the chamber’s manager of policy and government relations.

“Traditional insurance products have not adapted to account for occasional commercial use (throughout the sharing economy) and the need for products that provide this coverage,” Ontario Chamber of Commerce stated. “For example, standard homeowner’s insurance may not be valid if the home is occupied by a paying guest at the time of any insurable event. Airbnb has responded by providing a US$1 million ‘host guarantee’ that protects the property of Airbnb hosts automatically, a policy that has been underwritten at Lloyds of London. Host liability insurance has also been introduced in the United States.”

Ontario court records indicate that Uber says it has a $5-million insurance policy for passengers while on a trip arranged by Uber.

“Regulators and insurers have indicated that they cannot be certain about the extent to which Uber’s insurance policy covers drivers, as Uber has not shared their policy publicly,” Ontario Chamber of Commerce warned.

“The sharing economy continues to gain momentum as a business model that spans multiple industries while creating unique opportunities for entrepreneurs and consumers alike,” stated Ted Graham, Innovation Leader at PwC Canada, in a PwC release Tuesday announcing the report.

Related: Learning to Share

Autoshare, loan provider Borrowell, Toronto Tool Library (which lets its members borrow tools for home and community projects) and BlancRide – which lets riders contact and pay drivers for passenger transportation – are among the examples of the “sharing economy” provided by the Ontario Chamber of Commerce.

Drivers of such services include consumer wireless data services and improved data analytics, the chamber suggested in the report.

“Enterprising citizens can now generate income by renting assets as varied as drills, camping equipment, and parking spots.”

In addition to addressing insurance gaps, the Ontario Chamber of Commerce had four other recommendations for the Ontario government.

Related: Ontario politicians concerned about uninsured ‘bandit’ taxis vote to increase fines

One of those is for government at all levels to establish a “cross-jurisdictional taskforce that brings together government, experts, and industry in an effort to further institutional understanding of the sharing economy and the implications of its growth.” That task force “should identify those areas where government intervention is needed to remove barriers to innovation or protect the public interest, based on factors including existing market-driven, self-regulatory solutions.”

Another is updating regulations.

“The government should consider an ’empty the box'” approach where possible, in which a big picture lens is applied and only provisions that are necessary and relevant today are kept intact.”

Citing a report from the Mowat Centre (a research organization located at the University of Toronto’s school of public policy and governance), the Ontario Chamber of Commerce noted Toronto taxis are subject to 40 pages of licensing requirements while the hotel industry in Ontario is subject to 33 pieces of legislation, including one stipulating when a hotel owner can place a lien on a customer’s horse.

A fourth recommendation for the Ontario government is to consider the sharing economy in an existing public consultation on employment regulation. The current review “includes an investigation into the rise of non-standard working relationships, such as temporary jobs, part-time work, and self-employment,” the Ontario Chamber of Commerce said in the report. “It is important that the final findings of this review at least partially uncover the contribution of the sharing economy to the rise of non-traditional work.”

The Chamber of Commerce also recommends the Ontario government develop a “how to guide on tax compliance” and suggests Canada Revenue Agency should “study income-reporting by sharing economy participants (drivers, hosts, etc.) to determine the level of non-compliance and accordingly, develop an appropriate response.”