Section 2(1) of the Compulsory Automobile Insurance Act states that “no owner or lessee of a motor vehicle shall, (a) operate the motor vehicle … on a highway [defined as any road or parking lot that is intended for or used by the general public,] unless the motor vehicle is insured under a contract of automobile insurance.”
Therefore, if you are a licensed driver living in Ontario driving on a public road, you are required by law to carry a minimum amount of car insurance. The Financial Services Commission of Ontario regulates this minimum policy under the Insurance Act as Ontario Automobile Policy (OAP 1), which includes coverages for: 1. Third-Party Liability Coverage of at-least $200,000 to pay for claims against your wrongdoing; 2. Statutory Accident Benefits Coverage comprising of a series of no-fault benefits (i.e. Med-Rehab, Income Replacement etc.); 3. Uninsured/Underinsured Automobile Coverage to compensate you where you are injured by an uninsured or unidentified driver; and 4. Direct Compensation for Property Damage Coverage (“DC-PD”) to cover property damage resulting from multi-vehicle accidents in Ontario for which another insured driver is at fault. These coverages are not only required by law, but offer important protections for the drivers who use them. If a driver is in an accident without coverage, they may be subject to personal injury and/or extensive property damage without compensation. What are “Exclusion Clauses”? Although you may have valid automobile insurance, the coverages attributed to the policy may be lost if the circumstances of a claim fall within an ‘exclusion clause.’ An exclusion clause is a term in a contract which omits or limits one of the party’s liabilities in specific listed conditions, circumstances, or situations. In the automobile insurance context, this would remove all protections under OAP 1 listed above, with the exception of Accident Benefits Coverage, which is required by law to be provided to all injured in an automobile accident in Ontario, notwithstanding an exclusion clause. These clauses range from excluding coverage for those who carry explosives or radioactive material to automobiles in operation without the consent of the owner or policyholder. It is worthwhile to note that the courts have interpreted ambiguities in these clauses in favour of the insured, so long as it is within reason. Essentially, coverage provisions must be construed broadly and restrictive provisions (i.e. exclusion clauses) must be construed narrowly. In Amos v Insurance Corp. of British Columbia, 3 SCR 405, a driver made an Accident Benefits claim after being shot in his car. Although he was originally denied because the policy required a causal link between the ownership, use or operation of the vehicle and the injury, the court construed this causal link with an “arising out of” standard rather than "caused by." Due to this lower threshold, the insured satisfied the test. “Commercial Use” Exclusion A common exclusion clause in many coverages is one that excludes compensation when the automobile is being used for ‘commercial uses.’ This is a result of the separation of personal and commercial insurance coverage. As a general rule, if you use your vehicle for the purposes of business, such as delivery or hauling gear, then you require a commercial policy in addition to your business. However, if you are driving your vehicle for activities unrelated or ancillary to employment, such as commuting to work or picking up coffee for the office, then your personal policy will likely cover you. Therefore, those who earn through the ‘Gig Economy’ (i.e. car share or delivery driver) often find themselves in a problematic situation where the line between personal and commercial activities becomes blurred and gaps in auto insurance coverage arise. These issues have been responded to differently by each ‘Gig’ Industry: 1. Car Share (i.e. Uber): Ontario has responded to these issues by instituting mandatory insurance for car-share drivers, often provided by the company that employs/independently contracts the driver. For instance, Uber has instituted a policy that automatically covers Ontario drivers. The commercial policy provides full coverages for drivers between accepting a trip and reaching the rider’s destination. These protections are maintained between trips, albeit at a lesser amount, while still logged on the app. In all other circumstances, the driver is protected by their own compulsory policy. Companies like Lyft have a similar policy. 2. Food Delivery (i.e. SkipTheDishes): While Uber maintains the above policy for their UberEats couriers (and personal injury insurance for those delivering via bicycles, e-bikes, e-scooters, or on foot), SkipTheDishes does not. They require you to purchase your own commercial insurance policies in order to have coverages. However, they do not require proof of insurance to drive for them, creating a situation that leaves many couriers uninsured. Summary Those engaging in the ‘Gig Economy’ must be cognizant of these issues to ensure that they have valid coverages through the company they work with or for. Additionally, if you have been injured in a automobile accident by a delivery driver, you have to ensure that the other driver has third party liability coverage or you have sufficient uninsurance coverage to compensate you if injured in an accident. The personal injury lawyers at Littlejohn Barristers have significant experience representing clients who have had been injured by drivers performing their employment duties during an accident. If you have been in an accident, please contact our Barrie office at 705-725-7355 to see if we can help.