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Third Party Liability Insurance Guide

Third Party Liability Insurance Guide

Tab 1

Insurance Definitions Liability Insurance Commercial General Liability Insurance

Tab 2

Third Party Liability Insurance Program for Small Craft Harbours Frequently Asked Questions and Regional Contacts

Tab 3

Templates a) Insurance Application Questionnaire b) Incident Report

Tab 4

Claims Procedure

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

INSURANCE POLICY DEFINITIONS Liability Insurance There are numerous types of liability insurance specific to particular type operations. At all times, Liability insurance will pay damages to a Third Party (liability to others) on behalf of an Insured named on the policy, on the basis of the insured having a Legal obligation (compelled by a court) to do so. In Liability insurance, a Loss incident is an event giving rise (or with potential to do so) to legal action against the insured. Such events must be reported to the insurer. A liability Claim is the legal action itself (Statement of Claim). The benefit protection of this type of insurance is that: a) It will provide Legal Defence at the insurer's cost and; b) It will pay (within the defined scope of the policy) the court awarded damages. 1. Commercial General Liability Insurance (CGL): (This is our current policy for Third Party Liability Insurance) This is the most common and important type of liability insurance. The primary basis of coverage pertains to: Bodily Injury and Property Damage (BI&PD). In other words (save for some exceptions of coverage extensions) the Third Party must have sustained either or both of these type damages in order to trigger the policy protection afforded to the Insured. The insurer will cover the damages when the insured becomes legally obligated to pay or at the insurer's discretion on mutual settlement agreement. The bodily injury or property damage must occur during the policy period. Some policies may also require that it also be discovered and reported during the policy period but that is not generally the case. Coverage revolves primarily on tort type liabilities and negligence. Compensatory damages do not include punitive or exemplary damages nor mandatory injunctions. A number of important endorsements are usually sought as extensions to the basic coverage in order to compensate for some critical exclusions in the policy. Some of these include: Cross Liability Endorsement Contractual Liability Endorsement Employees and Volunteers as Additional Insured Personal Injury Liability: This means other than physical bodily injury. It refers to the character, reputation and position of the third party in the community caused by libel or slander. It also includes false arrest, detention or confinement against one's will. Medical Payments: This part of the policy covers reasonable medical expenses incurred by a third party. There is no need to prove negligence or establish any other legal obligation on the part of the insured. This deal with minor third party claims for certain expenses promptly when the insured feels a moral responsibility to pay for an injury sustained by a third party on the HA premises. Tenant's Legal Liability: Insures against liability incurred for damages, from an insured peril, to the rented premises. Only certain perils are eligible for coverage: fire, explosion, smoke or leakage from fire protection equipment.
This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

THIRD PARTY LIABILITY INSURANCE (TPLI) PROGRAM FOR SMALL CRAFT HARBOURS (SCH) 2006-07 As part of an ongoing Fisheries and Oceans Small Craft Harbours program, Harbour Authorities (HA) across Canada are supported with a Third Party Liability Insurance program. As a result of their operations, HA are exposed to claims from third parties for loss of life, bodily injury, and property damage. Limit Insured CAD $20,000,000.00 any one accident/occurrence. All Classes (A, B, C and D) $1,500.00 any one accident/occurrence Note: Please note that the portion of the deductible paid by HAs continues to be $500 and, as in previous years, SCH will cover the portion of the deductible in excess of $500. Who is covered DFO- SCH, Harbour Authorities, their offices, employees and volunteers, while working for and on behalf of the harbour, are covered against third party liability claims.

Deductibles

Over 600 HAs across Canada currently benefit from the insurance program. The program is underwritten by Continental Casualty Company, Toronto, Canada and the brokerage firm is Marsh Canada Limited. Following are frequently asked questions that might help answer some of the concerns related to the policy coverage. FREQUENTLY ASKED QUESTIONS Q.1: Who is covered? DFO-SCH, Harbour Authorities, their elected & appointed officials, commissioners, directors, officers, employees and volunteers while working for and on behalf of the Harbour Authority.

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

Q.2:

What does Legal Liability refers to? It refers to liabilities (legal responsibilities) imposed by law (Federal, Provincial (common law or civil code). What are the key coverage? The policy covers third party liability (liability to others i.e. it does not cover damages to the HA property or of any other insured on the policy) arising out of the operations of a HA, more specifically for: Bodily Injury injury, sickness, disease, death Personal Injury libel, slander, defamation, wrongful eviction Property Damage destruction property , belonging to third parties because of the HA negligence When does TPLI insurance coverage begin? The HA has to be incorporated and listed as an insured on the policy in order to be covered for Third Party Liabilities. Process: Once incorporated, the HA has to fill out the brokers Application questionnaire (tab 3a) and send a copy to their regional contact who in turn sends the document to Marsh Canada Limited. Marsh Canada Limited will then issue a certificate of insurance to the Harbour Authority. The insurance coverage begins at the effective date of the lease between DFO and the HA. What are the key exclusions of the insurance policy? The legal liability arising out of property owned, leased or occupied by the HA; Watercraft liability of any vessel or craft owned by the Insured in excess of 26 feet in length; Employers liability (this should be done through workers compensation) and; Pollution except for sudden and accidental pollution incident. What is due diligence? Due diligence is the discharge of someones duties, in good faith, in a manner in which that person reasonably believes to be in the best interests of other party and with the care prudent persons in like positions with the same background, experience, expertise and knowledge would exercise under similar circumstances. Who is liable if: Someone is swimming in the harbour and they get hit by a boat? A child drowns in the harbour? A child is running on the docks and trips and falls? A person is swimming in the harbour and gets snagged by someone sport fishing? Answer to the above four questions: the HA insurer will defend the HA in the eventuality that the HA is sued for negligence. The court will determine the liability.

Q.3:

Q.4:

Q.5:

Q.6:

Q.7:

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

Q.8:

Should the HA ask for a certificate of insurance from participants using the harbour for an event or a festival? Absolutely, the HA policy will not respond to third party claims because of the activities of other parties on HA property, unless a claim is made against the HA. For example: parasailing, diving, etc. Should a license issued by the HA include a clause stating that insurance for liability and the vessel is required? This is recommended.

Q.9:

Q.10: Are HA owned vehicles insured while traveling on official HA business? Not on this policy; HA are legally required to have automobile insurance. Q.11: Are the commercial fishing boats insured? No, unless any damages sustained by the fishing boat are as a result of the negligence of the HA. Q.12: If the HA fuel tank leaks, is the HA covered? Damages to the environment (air, land or water) and to third parties arising from a sudden and accidental leak are covered provided that the incident is discovered within 72 hours of its occurrence and reported to the insurer within 90 days of discovery. Damage to the tank itself must be separately insured. Q.13: Are HA owned buildings and equipment covered for fire, theft or damage? No, this is a liability policy. It only responds to claims for damage to third parties. Damage to HA own property must be insured separately by HA itself. Q.14: Are vessels owned by the employees, volunteers, directors or officers covered while they are secured at the dock? No, unless the damages sustained by the boat is as a result of the negligence of the HA. Q.15: If a boat goes aground in the harbour, is the HA covered? The HA is covered against claims arising from incidents which occurs within the harbour boundaries (mentioned in the lease agreement). The grounding would have to be as a result of the negligence of the HA for the policy to respond. Q.16: Is the cost of removal of a wrecked vessel covered? The cost could be covered as long as the wreck causes a hazard to the activities of the Harbour. The cost of removal has to be approved by the Insurer prior to the removal.

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

Q.17: Is the HA covered if a visitor falls on or off the dock and injures himself? Yes, the policy will cover for the damage and for the cost of defending any suit against the HA should it be found liable, subject to the policy limits, terms and conditions. Q.18: If the harbour burns down and private property is destroyed, is the HA protected against a law suit? Yes, the policy will cover for the private property damage (third partys property) and the defence cost of defending the legal action arising from this event subject to the policy limits, terms and conditions. This is not a direct damage policy, therefore, the HA and the government are not insured for direct damage to their owned or leased property. Q.19: If a HA employee or volunteer moves a harbour users boat and damages it, is he or she covered? Yes, as long as the employee or the volunteer was in the course of performing his duty at the harbour. Q.20: Are the damages caused to third parties from a boat owned by HA covered? Yes, if the boat does not exceed 26 feet in length, the damages would be covered if the HA is found liable for the damages. Q.21: Is the HA covered if it is sued by a volunteer that has been injured while working for or on behalf of the HA? The policy will cover for damages and the cost of defending a legal action against the HA. Q.22: Are contractors hired by the HA to do work for the HA covered by our policy? No, they must have their own liability policy. Q.23: Is the HA covered when acting as a contractor to install buoys for the Canadian Coast Guard? The HA would be covered for third party liability as long as the buoys are installed within the harbour boundaries (mentioned in the lease agreement). Q.24: What type of contractual liability is covered by the insurance policy? The HA liability is assumed in contract but only to the extent of the HA obligations and with respect to the HA operations. For example: the HA leases a piece of equipment from a company and the contract requires that the HA assumes the liability of the company in the eventuality that they are being sued because of the HA negligence in using that piece of equipment (i.e. it causes damages to someone else property). The policy would pay for the defence of the HA.

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

Q.25: Are employees, directors, officers, board members or managers of the HA covered for medical payments if they sustain an injury while conducting business for or on behalf of the HA? No, this is not a group accident policy. A separate insurance policy must be purchased. Q.26: Does the policy cover Directors and Officers liability? No, this policy does not cover Directors and Officers for liability arising from wrongful acts (i.e. any breach of duty, neglect, error, misstatement, misleading statement or omission in the administration of the HA). This must be insured by a separate policy. Q.27: Is the HA insured for the death or injury to an employee? No, coverage must be purchased from the applicable workers compensation benefits available in the province. Q.28: How many claims can a Harbour Authority submit for an accident that reoccurs for the same reason (i.e. the same rock of piece or wood damaging different boats)? The HA can report as many incidents as they get. The claims come from the third party. The insurer will evaluate each claim to its own merit. Naturally, a HA that knows of a situation at their HA that is hazardous should take every step to fix it. Following a claim, the insurer can also make a recommendation for improvement of a site and advise the HA that if it does not proceed with the recommendation, the insurer can review its position on the entire account.

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

Q.29: In the event of an incident, what should a HA do?

In the event of an incident involving the liability of the HA, an incident report containing details of the occurrence must be submitted to Small Craft Harbours (SCH) Regional Office. The Regional Office in turn will forward a copy to Marsh Canada Limited and SCHHeadquarter as soon as practicable as stated in the policy. Any and all documents related to such occurrence shall be forwarded promptly to the SCH Regional Office.

Step 1

Fill out an Incident Report.

Step 2

If applicable, take pictures or video of damage or injury.

Step 3

Send the Incident Report to your regional contact.

Step 4

If a potential claim is received, forward to your regional contact.

For more information on the above program, please contact your regional contact: Regional Contacts: Pacific: 604-666-9923 Central and Arctic: 204-983-6093 Quebec: 418-648-7822 Maritimes and Gulf: 506-851-2349 Newfoundland: 709-772-8491 NCR-Ottawa: 613-993-8919

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

Please complete and forward to: Marsh Canada Limited Carling Executive Park 1565 Carling Avenue, Suite 600 Ottawa, Ontario (K1Z 8R1) Tel.: (613) 725-5253 Fax: (613)725-5270

HARBOUR AUTHORITY APPLICATION QUESTIONNAIRE 1. Name of Harbour Authority:_____________________________________________ 2. Contact Name and Address: ____________________________________________________________________ ____________________________________________________________________ 3. Telephone: _____________________ Fax:_______________________________

4. Brief description of activities and total revenues projected for each activity for the next 12 months: ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ 5. Number of employees: 6. Payroll: 7. A) Description of marine traffic: ____________________________________________________________________ ____________________________________________________________________ B) Description of operations in respect of water sounding and cleaning: ____________________________________________________________________ ____________________________________________________________________ 8. Brief description of installations (buildings, warehouse) owned by harbour, with Replacement Cost Values: ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

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HARBOUR AUTHORITY APPLICATION QUESTIONNAIRE (contd)

9. Description of harbour installations (piers, breakwaters, etc.) with Replacement Cost Values:_______________________________________________________________ ____________________________________________________________________ 10. Number of Berths: ____________ Berth Meters: __________________________ 11. Description of maintenance of harbour installations: A)Work done by Insured: _____________________________________________ ____________________________________________________________________ ____________________________________________________________________ B) Work done by independent contractors: ________________________________ ____________________________________________________________________ ____________________________________________________________________ 12. Description of all contractual agreements and leases (attach copy, if applicable): ____________________________________________________________________ ____________________________________________________________________ 13. Loss history for the past 5 years. No Losses: ________ or Details:_________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ 14. Attach approximate site plan of harbour showing location of docks and buildings.

Date:_______________

Signature:________________________________ Applicant or Authorized Officer

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

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HARBOUR ACCIDENT REPORT THIS REPORT IS REQUIRED FOR EVERY ACCIDENT CAUSING PROPERTY DAMAGE OR BODILY INJURY ARISING FROM OR INVOLVING HARBOUR OPERATIONS INCLUDING OPERATION OF HARBOUR EQUIPMENT OR VEHICLES OR MAINTENANCE OF HARBOUR FACILITIES. THIS REPORT IS USED TO CONVEY INFORMATION REGARDING ACCIDENT TO THE INSURERS AND THEIR SOLLICITORS. THIS REPORT IS CONFIDENTIAL AND PRIVILEGED. IT SERVES AS BACKGROUND MATERIAL IN DEFENDING ANY CLAIM OR LITIGATION WHICH MAY ARISE.

1. Name of Harbour Authority: ___________________________________________ Contact Name: ___________________________________________________ __ Phone Number: _______________________ Fax Number: _____________________ 2. Date of Accident: ___________________________________________________ 3. Time of Accident: ___________________________________________________ 4. Weather Conditions: _________________________________________________ 5. Description of Accident (attach sketch): ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ 6. Name and address of Owner of any property damage: _________________________ ___________________________________________________________________ ___________________________________________________________________ 7. Description of property damage: ________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ 8. Amounts of any estimates of property damage received: ___________________________________________________________________ ___________________________________________________________________

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

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9. Names and address of injured persons: ____________________________________ ___________________________________________________________________ 10. Description of bodily injuries: __________________________________________ ___________________________________________________________________ ___________________________________________________________________ 11. Names of any Harbour personnel involved: _________________________________ ___________________________________________________________________

12. Names and Addresses of any witnesses: _________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ 13. If possible, take photographs and attach to this report. 14. If the accident is serious, telephoned notification of accident to: Name:______________________________________________________________ On (date): ______________________ at (time): ____________________________ Name of person making this report: ________________________________________ Date of report: _______________________________________________________

Send report to: Small Craft Harbours Fisheries and Oceans Canada 200 Kent Street, (14N173) Ottawa (ON) K1A 0E6 Tel.: (613) 993-8919 Fax: (613) 952-6788 Marsh Canada Limited Carling Executive Park 1565 Carling Avenue, Suite 600 Ottawa (ON) K1Z 8R1 Tel.: (613) 725-5253 Fax: (613) 725-5270

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

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CLAIMS PROCEDURES 1. The HA will forward the accident/incident report and claim request to the regional contact who will forward a copy to Marsh Canada Limited and SCH HQ. This will serve as background material in defending any claim or litigation which may arise. Addresses are as follows: Pacific Region: Fisheries and Oceans Small Craft Harbours 410 Burrard Street, Suite 200 Vancouver, B.C. V6C 3S4 604-666-9923 Maritimes and Gulf Regions Fisheries and Oceans Small Craft Harbours 343 Universit Avenue P.O. Box 5030 Moncton, N.B. E1C 9B6 506-851-2349 Newfoundland Region: Fisheries and Oceans Small Craft Harbours P.O. Box 5667 St. Johns, Newfoundland A1C 5X1 709-772-8491

Central and Arctic Fisheries and Oceans Small Craft Harbours 3027 Harvester Road, Unit 506 Burlington, Ontario L7N 3G7 204-983-6093 Quebec Region: Fisheries and Oceans Small Craft Harbours and Real Property 104 Dalhousie Street Quebec, Quebec G1K 7Y7 418-648-7822

2. If the third party wishes to pursue a claim for damages, they should notify the HA who will then advise the third party of the process for laying a claim i.e. write a letter or statement of claim to the HA outlining the details of the claim. 3. Marsh Canada Limited receives the information, opens a file and sends the claim to the adjuster. The adjuster works for the Insurance company Continental Casualty Company (CNA). A copy of the letter addressed to the adjuster is also sent to SCH HQ and the SCH Region along with a file number to be used in all subsequent correspondence. 4. The adjuster will contact the HA and/or the third party if necessary. 5. If the suit is filed against Canada, a suit for which the insurance company would have the right to defend Canada as an additional insured under the contract of insurance, the
This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

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insurance company shall quickly contact the Solicitor General of Canada, by registered mail, to the address below in order to agree on the legal strategy: Chief General Counsel Civil Division Department of Justice Canada 284 Wellington Street Ottawa, ON K1A 0H8 Canada 6. The adjuster will provide his report to the insurance company. Once the claim is settled: 7. Justified claims a. CNA will send a cheque for the total claim amount (including the deductible) along with a letter to the third party and/or the company that will repair the damage.

b. A copy of this letter will also be sent to the HA and to SCH HQ so each can issue a cheque for its portion of the deductible, to the insurance company: The Continental Casualty Company (CNA). A copy of the letter will also be provided to the SCH Region for their information. c. The name of the harbour, the date of the event and the file number should appear as reference on the cheque issued by the HA and SCH Headquarters. The cheques should be sent to the insurance broker at the following address: Senior claims counsel Marsh Canada Limited 1565 Carling Avenue, Suite 600 Ottawa, Ontario K1Z 8R1 8. The senior claims counsel will send the cheque to the Insurance Company. 9. Unjustified claims a. The adjuster from CNA will send a letter to the third party with a copy to the HA and Marsh Canada Limited to inform them of the decision taken; b. Marsh Canada Limited will also notify SCH HQ and the SCH Region. 10. SCH HQ will update a database with the accident reports received from HAs. This database will be sent to the regions annually.

d.

This document is not intended to replace professional advice. The content of this document should not be taken as being official or unofficial policy of any government body.

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