Small Commercial Vessel Association April 18, 2012
Insurance Discussions SVCP
The SCVA is concerned about how insurance companies are or will react to operators whose vessels do not comply with TransportCanada’s Small Vessel Compliance Program (SVCP).
Currently, insurance companies, that I contacted, are not requiring vessels be in compliance with the SVCP however they indicated that if these requirements were being strictly enforced, they may make compliance part of their underwriting criteria.
When asked about self inspections of vessels the insurance companies were reluctant to comment as they were not familiar with the criteria. By comparison; to qualify for automobile insurance, automobiles must have safety inspections completed. These must be completed by an authorized repair facility – there is no self inspection. Should the insurance companies make compliance with the SVCP mandatory, it is hard to say whether self inspections will be acceptable.
Some insurance companies require surveys be completed by a qualified marine surveyor on vessels that are over 10 years old. They also may require periodically updated surveys as the vessels age. Other insurance companies accept that the owner is being prudent about maintaining their vessels and only ask for details of their maintenance program. This could be the same with the SVCP.
In reviewing the insurance policy wordings, I did not find an exclusion specifically relating to compliance under the SVCP. This being said, should a major loss occur and it was deemed that the loss would not have occurred had the vessel been in full compliance of the SCVP, an insurance company may try to deny or limit the loss due to the non-compliance. Similarly, a claim on a vessel with outstanding marine survey recommendations that have not been completed may also be denied or limited.
In summary, the insurance companies have not made compliance with SVCP part of their underwriting criteria however experience tells me that, as they become more familiar with these regulations, they may very well be asking for confirmation of compliance before insuring small commercial vessels.
Tim Pawlowski, CCIB
Lackner McLennan Insurance Ltd.
423 King Street North, Waterloo, ON N2J 2Z5