MARINE LIABILITY ACT
INSURANCE REQUIREMENTS FOR COMMERCIAL OPERATORS
The Marine Liability Act (MLA) deals with the liability of marine
operators in relation to passengers, cargo, pollution and property damage. The
intent is to provide a uniform method for establishing liability that balances
the interests of shipowners and passengers, and provides limits on liability.
The Act establishes maximum liability for operators of $350,000 per
passenger. It also prohibits the use of liability waivers, which were
frequently overturned by courts, leaving operators open to unlimited
liability. In addition, it establishes provisions for the apportionment of
liability according to the degree of fault or neglect by the passenger. This
framework is based on international conventions.
The Act came into force on August 8, 2001 and is applicable to all
incidents governed by Canadian maritime law.
The MLA also provides for the introduction of compulsory insurance
requirements for marine operators. While the Act determines the general
principles, the specific requirements for compulsory insurance will be set out
in regulations. The regulations have not yet been drafted and therefore
operators are not yet required to carry insurance.
Over the coming months, Transport Canada will conduct extensive
consultations with the marine, insurance and other interested industries to
develop these regulations. The department will fully consider the insurance
market situation before any new regulations are formulated. In addition,
sufficient time will be allowed for a thorough analysis and consultations with
all concerned parties.
Once a draft regulation is developed, it will be published in Part I of the
Canada Gazette, which will be followed by a 90 day consultation period
during which any interested party may submit written comments on the proposed
regulation.
This builds on earlier consultation with industry that took place in
developing the MLA. Transport Canada issued several notices to industry during
the legislative process between March 2000 and August 2001, and before the MLA
was introduced. In addition, notices were also posted through the Canadian
Marine Advisory Council.
Transport Canada officials will continue to work closely with the marine
and insurance industries in developing regulations under the MLA, and to
ensure that the MLA is well understood by all stakeholders.
The MLA applies to the carriage of passengers by any vessel used for “commercial
or public purpose”, but does not extend to “pleasure vessels”. For
guidance on the differentiation of these two categories of vessels, see
Transport Canada Guidelines and Ship Safety Bulletin 14/2000 at www.tc.gc.ca/MarineSafety/bulletins/2000/14_e.htm.
May 2006
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