Canada Insurance Information

CIA link to demographic/economic data on Canada

General Canada Insurance Information

• Compulsory Insurance:
  
  1. Automobile;
  2. Workers’ Compensation (Government Monopoly).
• Non-Admitted Insurance:
  Not prohibited; however, a 10% Federal Tax is imposed when Insured by an unlicensed Company. Additionally, a Provincial tax can be added on top. Note: If the coverage is non-admitted, the broker cannot collect premium.
• Policy Wordings & Rates / Tariffs Controlled:
  Automobile forms must be approved at Provincial level. Automobile rates also require approval in the Provinces of Alberta, New Brunswick, Quebec, Ontario, Nova Scotia and Newfoundland. Canada is a non-tariff market except for automobile.
• Policy Language:
  English and French.
• Types of Insurance Restricted to Government Institutions:
  Automobile - Manitoba, British Colombia, Quebec and Saskatchewan operate a monopoly on primary policies.
• Policy Currency:
  Canadian Dollar (C$). U.S. Dollar insurance is available.
• Currency Restrictions / Exchange Controls:
  No restrictions except that premium and claims statistics be reported in C$. Claim payments can be paid in other currencies.
• Policy Period:
  Annual. Long Term Agreements (LTAs) are unusual but can be employed for project insurances.
• Cancellation Provisions:
  By the Insured: at any time subject to a short rate penalty.
  By the Insurer: 15 day written notice or sooner if delivered by hand.
• Premium Tax etc. paid by Insured:
  On admitted paper, taxes are paid by the insurer are only the Provincial premium taxes. The retail sales taxes in Ontario, Quebec and Newfoundland are billed by the brokers to the insured. Also, on admitted paper from Global programs where control of the placement is outside Canada, the 10% excise tax is till payable by the insured in most cases.
  Taxes vary by Province. The Excise Tax Act requires an Insured to pay a 10% tax when coverage is placed with a non-admitted Insurer. Otherwise, on admitted policies, the taxes are payable by the Insurer and included in the premium.
• Insurance Companies:
  Regulated by the Federal and Provincial Departments of Insurance.
• Brokers:
  Agents and brokers operate in the Canadian market.
• Brokerage Commissions:
  Brokerage cannot be paid to foreign brokers not registered in Canada. Commissions shown hereafter are approximate: Commercial - 20%; Automobile - 12.5%.
• Broker of Record Letters:
  Market practice dictates the use of BORs especially for commercial business.
• Reinsurance:
  It is monitored by the Federal Department of Insurance.
• Local Natural Hazards:
  Earthquake, Flood, Hail.
• Other Information:
  Commissions are actively negotiated. Reinsurance pools exist for pollution and nuclear risks.

Property Insurance

• Fire:
  Standard fire perils include - fire, lightning, aircraft, explosion, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane and vehicle impact are available in the market for an additional premium. Boiler explosion and machinery breakdown must be covered under a separate boiler policy.
• All Risk:
  Available and customary.
• Coinsurance:
  Variable.
• Blanket Insurance:
  Available.
• Business Interruption:
  Available - Gross Profits, Gross Earnings and Extra Expense.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  There are Canadian forms available comparable to comprehensive U.S. or UK forms including Business Interruption. Inspections are a statutory requirement throughout Canada.

General / Public Liability

• Forms Available:
  All forms available including manuscript. Product Recall coverage is available with some Insurers.
• Comments:
  Policies can be written on either an occurrence or a claims made basis.

Automobile / Motor

• Compulsory Limits:
  Minimum Limits (CSL) - C$200,000 – Except in Quebec where the minimum is C$50,000.
• Non-owned Automobile/Motor:
  Coverage can be purchased separately on rare occasions with supporting business; however, this is generally an extension provided for under the General Liability policy. Legal Liability for physical damage to non-owned automobiles can be purchased as part of the Owned auto policy or as part of the Non-owned auto policy.
• Comments:
  Policy forms are determined by Province. The Cost of Defense is usually included within the limit. Coverage applies to the Insured and any licensed individual driving with the Insured’s permission. Passengers are deemed to be Third Parties.

Automobile Bodily Injury is a government monopoly in Quebec. Property Damage and Physical Damage are open market coverages.

Workers’ Compensation

• Comments:
  Workers’ Compensation is a Government monopoly. The insurance industry is not involved in placing the coverage and employers must deal directly with separate provincial boards for each province in which they operate. WC is not compulsory for all business operations – i.e., farm workers, office workers, some sales classes, etc. Employers need to contact the board in their province to see if they are an exempt class.
• Employer’s Liability and voluntary compensation generally cannot be purchased on their own. This coverage is attached to a General Liability policy as an extension. There are very few instances where they can be purchased on their own. Limited Medical Expenses or Occupational Disease benefits are included in the Government Scheme.

Marine

• Available Wordings:
  There are generally no restrictions on forms or rates for this class. Forms are based on U.S., Local and the Institute of London Underwriters wordings.

Crime

• Available Coverages:
  Most types of Crime coverage and surety.