New compulsory insurance scheme in Canada for passenger vessels

Shipowners’ Club has notified its Members of the proposed new Canadian federal regulations dealing with compulsory insurance of passenger vessels under the Canadian Marine Liability Act, published in December 2016.

Under the proposal, any domestic carriage of passengers by any commercial or public vessel will be required to maintain minimum insurance cover of C$250,000 per available passenger space on the vessel to a total of the passenger capacity.

The proposed regulations do not apply to international carriage or to pleasure craft, but domestic carriage does include carriage of passengers between two places in Canada either directly, or by way of a place outside Canada, e.g. with a stop in an American port.

The proposal is the result of consultation since 2010 between Transport Canada and the industry. Once adopted it will enter force gradually with a 60 day period to comply. Carriers with an insurance policy will need to comply when their current insurance policy is renewed, altered or cancelled.

Shipowners’ Club informed Members that the proposed regulation would have a limited impact as, following consultation, the draft regulations had been amended so that a Certificate of Entry issued by a member Club of the International Group of P&I Clubs would be taken as acceptable evidence of insurance.

The regulation requires Members to keep the Certificate of Entry on board, or produce it within 24 hours if requested by a designated officer. Failure to provide proof of insurance may lead to detention of the vessel and/or a fine up to C$100,000.