The Insurance Bureau of Canada released a report published this week which highlighted several safety, insurability and marketplace issues related to commercial insurance.

Since the Fall of 2019, IBC has been working with the Canadian Trucking Alliance to examine commercial insurance challenges facing the Canadian sector.

Highlights of the IBC report include:

• Incentives for fleets that deploy safety technology;
• Addressing the umbrella market (access/cost);
• Continued emphasis on fraud reduction and support for a level playing field between “regular market” and “residual market” (Facility);
• Awareness on industry rating system to better explain premium costs;
• Addressing insurability surrounding younger commercial drivers (18-25 yr. age group);
• Addressing insurance validity in real-time through provincial licensing agencies;

“The recommendations put forward in IBC’s report with respect to trucking reflect many of the key issues our members are focused on addressing.  We support and applaud IBC and the insurance sector for taking the initiative to tackle issues that can be solved through partnership with our membership,” said Stephen Laskowski, president, CTA. “One of the more topical recommendations deals with insurance fraud in our sector. We believe there is a strong correlation between fraud and the Driver Inc. problem, which is yet another reason for all levels of government to make the enforcement of Driver Inc. a top priority.”

Regarding fraud in the trucking sector, here is what the IBC report stated:

“IBC and CTA should continue discussing how to reduce fraud in the trucking sector. The Facility Association (FA), which is a non-profit insurance association that makes auto insurance available to those turned down by the private sector, carried out a study of recent closed claims in its commercial trucking book of business. It found that a number of those claims included fraud, particularly trucking firms declaring that they operated in one province but were actually based in another.  

FA also saw a large decrease in its Ontario market share and a large increase in market share elsewhere. FA determined that some trucking insurance consumers were fraudulently declaring head offices in Atlantic Canada to achieve lower premiums. As a result, FA has tightened up its documentation requirements across Canada to be in line with private insurers. IBC and CTA should support FA as it implements its new standardized documentation requirements for the trucking sector across all provinces.”

IBC’s newly formed trucking working group will begin to address the recommendations as well as other emerging issues starting in summer 2021.

“By partnering with the trucking industry, IBC and the insurance sector can move forward on issues that will make a real difference from the consumer’s perspective, further improve road safety, continue to level the playing field and significantly make the trucking industry more attractive for younger generations looking for an earlier start to their professional driving career,” said CTA Sr. VP Policy Geoff Wood

Other emerging issues, not specifically noted in the report, but ones that CTA will be tabling in the future, include indemnification clauses in shipper contracts and addressing loss-transfer provisions where necessary.

For a summary of the trucking specific recommendations, click here. For IBC’s full report click here.