ADVANTAGE DAILY: Canadian Headlines from Canadian Underwriter - June 30, 2016

Alberta’s new insurance policy for TNCs a first for a Canadian province, policy available July 1

A new insurance policy for transportation network companies (TNCs) is available to insurance firms licensed in Alberta as of July 1, in line with the provincial government’s recently announced TNC framework geared at promoting fairness and road safety.

The insurance solution for TNCs and their drivers has been approved by Alberta’s Superintendent of Insurance, notes a statement this week from the provincial government. The new policy, Alberta Standard Automobile Form – Transportation Network S.P.F. No. 9 (SPF9), is now available for TNCs.

Covering “all TNC drivers from the moment they log into their TNC’s mobile app to provide rides for hire,” the Government of Alberta reports, “the product will be available to insurance companies licensed in Alberta on July 1, 2016. TNCs may purchase the policy through a participating insurance agent or broker,” it notes.

“Alberta is the first Canadian province to develop a new policy form designed specifically for TNCs,” the government states. Pointing out that the new policy provides adequate access to insurance protection and benefits in the event of an accident, it will cover statutory accident benefits for all three periods:

  • Period 1 begins when the TNC driver activates the TNC app with no passengers, providing $1 million in contingent third-party liability, with no collision or comprehensive coverage; and
  • Periods 2 and 3 are activated when the fare is accepted and when the TNC driver has picked up a passenger. These periods provide $2 million in third-party liability coverage, with optional collision or comprehensive coverage.

The Alberta government reports it is seeking a balance of fairness and safe roadways as part of its new framework for TNCs, including ride-for-hire companies like Uber, operating in the province.

Related: Alberta introduces new regulations for ride for hire firms like Uber

As part of amendments to Alberta’s Transportation Safety Amendment Act, which received the green light from the legislative assembly during the spring session, the provincial government can regulate the responsibilities of TNC companies and their drivers. The regulation that comes into force July 1, 2016 defines five key aspects regarding TNCs by doing the following:

  • clarifying the scope and obligations that TNCs must undertake to operate in Alberta;
  • specifying that all TNC drivers must have a Class 1, 2 or 4 driver’s licence;
  • establishing minimum standards for an acceptable police check, including a vulnerable sector check;
  • defining insurance requirements; and
  • providing legal definitions of TNCs, TNC driver and other related terms.

Noting that the regulation provides clear rules and guidelines for TNCs operating in the province, “our primary goal is to ensure all of Alberta’s road users – drivers, passengers, pedestrians and cyclists – are safe,” says Alberta transportation minister Brian Mason.

The government points out that the regulation will work in conjunction with, not in place of, local municipal bylaws governing TNCs.

To date, notes an FAQ on TNCs, only Calgary and Edmonton have amended their bylaws to address TNCs. “The framework for these services announced in February 2016 aligns with these bylaws. The regulation is in effect province-wide and, therefore, will also apply to municipalities and communities that do not have municipal bylaws or rules that specifically address TNCs.”

Although not part of the provincial government’s primary insurance solution – the SPF9 – two insurance companies are also expected to begin offering TNC driver endorsements this summer.

Drivers, not the TNC, can purchase certain endorsements. One product provides additional insurance coverage for the TNC driver who works less than 20 hours a week; a second endorsement provides insurance coverage for the period when the driver has logged into the app, but has not yet confirmed a fare.

“These products are specific to the individual insurance companies, whereas any insurance company may use the new Standard Policy Form,” the government statement explains.

A bulletin on the new policy provides detailed information on what coverage is available to who and answers a number of questions.

Welcoming the approval of a new ridesharing insurance policy, Intact Financial Corporation (IFC) reports the insurer will be providing this coverage to Uber, effective July 1, 2016.

“The insurance policy, designed specifically for this new transportation alternative, will provide protection to Albertans who use ridesharing platforms with coverage that is simple and seamless,” notes a company statement.

“Every ridesharing driver operating on the Uber platform in Alberta will automatically be covered under this new ridesharing policy provided by Intact Insurance Company, a subsidiary of IFC, and purchased by Uber from the instant a ride is accepted until the passengers have exited the vehicle,” it adds.

IFC’s Intact Insurance and belairdirect will provide Uber driver-partners with personal lines coverage when they are waiting for a ride request. “Customers must call their agent or broker before participating to purchase this personal lines coverage,” the insurer advises.

“With the growing popularity of ridesharing, we are excited to offer innovative insurance products to meet the evolving needs of consumers,” Karim Hirji, IFC’s senior vice president of international and ventures, says in the statement.

“This coverage structure also provides an opportunity for the insurance industry to develop personal lines coverage options for the period during which drivers are available to accept a ride, but have yet to do so,” Hirji continues.

Aon, which worked with IFC and Uber to bring the offering to market, “is committed to driving innovation across the sharing economy” to provide an “insurance solution that meets the changing needs of riders and drivers,” adds Craig Gilmour, executive vice president for Aon Risk Solutions.

IFC reports that the company and Uber “continue to work with regulators in Ontario and Quebec to provide similar products in the coming months.”