Car-Sharing Insurance – Are You Covered?

pictogram image on the street of a blue car with two people entering on either side, representing 'car sharing'

Recently, car-sharing has taken off across Canada. You can “borrow” or rent a car for a fee determined by how long you use the car. Some of the most popular car-sharing companies are:

  • Car2Go
  • EVO (in BC only)
  • AutoShare (in Toronto only)
  • Zipcar
  • MODO

Car-sharing works great if you don’t want to deal with the stress (or expense) of car ownership, including parking, maintenance and all those other fees that add up over time. Plus, less vehicle ownership is great for the environment and for reducing traffic congestion.

Generally, these car-sharing services charge a per minute or per hour or per day fee. Some also charge a membership fee. Your parking, insurance, and fuel can be included by some companies, but for other’s, you’re still responsible for covering some of these expenses.

But what happens if you’re involved in an accident? Are you covered? Will you be paying out of pocket to repair the car-sharing vehicle or for injuries?

 

Car-Sharing Insurance

The company providing the car-sharing service also supplies insurance. It’s generally included as part of the rental cost, although it may be an additional fee (for example, Car2Go charges a $1 fee for insurance each time you rent a car). This coverage is generally centred around third-party liability insurance: covering the costs associated with property damage and injuries if you cause an accident behind the wheel of your car-sharing vehicle. However, there are some conditions:

  • You must be in compliance with the terms and conditions of the service
  • You must have been the one driving (if using your account)
  • Your driver’s license is valid
  • You are responsible for a deductible (usually $1000)
  • You notify the car-sharing service immediately of any incident

You may also be held liable for any excess losses that exceed the insurance coverage offered by the car-sharing service. What does this mean? If your car-sharing service covers $1 million in third-party liability but you’ve caused an accident that has caused $2 million in damages and injuries (including legal expenses if you’re sued), you’d be on the hook for the extra $1 million not covered. That’s why continuing to have personal car insurance can be a good idea, depending on the amount of protection provided by the car-sharing service.

What if you’re not at fault? In that case, the driver who is at fault should have third party liability insurance to cover these expenses.

Additional Car-Sharing Insurance Coverage

Regular users of car-sharing services could benefit from¬†additional third-party liability insurance. This can help you cover the gap between what the car-sharing service will cover and the true cost of an at-fault accident. Like the example above, if the car-sharing service provides $1 million in third-party liability protection but all the costs add up to $2 million… you’d definitely hope you had your own third-party liability insurance to protect yourself financially!

Talk to one of our brokers to learn more about car-sharing insurance and third-party liability. It’s always better to know what your options are and be prepared before an accident happens.

4 Tips For Using Commercial General Liability Insurance to Protect Your Business

An insurance broker and two employees reviewing their commercial general liability insurance policy.

4 Tips for Using Commercial General Liability Insurance to Protect Your Business

Commercial general liability insurance helps protect your business, no matter what industry you’re in. Also known as a CGL policy, this coverage is the starting point and essential for any company. Here are 4 tips to help you make the most out of your commercial liability insurance to protect your business:

  1. Take advantage of risk management resources.
  2. Understand what is and what isn’t covered.
  3. Use your broker as a resource.
  4. Consider your CGL policy as a last line of defence.

We’ll discuss these each in a little more detail below.

 

1. Take Advantage of Risk Management Resources

As part of your commercial general liability insurance, you should have access to a variety of risk management resources. These are provided by insurance companies or associated third parties to help you minimize your chance of injury or property damage occurring on your business premises or wherever you operate. This can include everything from a phone line staffed with experts to training webinars to brochures and pamphlets. These resources are a great way to protect your business and learn how to handle potential lawsuits. For example, check out the Insurance Bureau of Canada’s risk management resources.

2. Understand What Is and What Isn’t Covered with Your Commercial General Liability Insurance

Commercial general liability insurance is basic coverage for all businesses, regardless of the industry you operate in. It protects you if you’re held liable for bodily injury or property damage to third parties. It will help reimburse you for your legal expenses, including any settlements and awards, up to your policy limit. You’ll also be required to pay a deductible. For example, let’s say someone walks into your store or office in the winter and slips in the front entrance. They fall and break their arm. They hold your company liable for damages. This type of scenario would likely be covered by your CGL policy.

But not everything is covered. For example, if you’re sued for causing financial loss as a result of your advice or professional service, you wouldn’t be covered by this type of policy. You’d need a professional liability insurance policy (also known as errors & omissions insurance) in order to protect yourself in that scenario.

That’s why it’s critical that you understand your policy, including what is and what isn’t covered. You should also understand how your insurance works and what you need to do in the event of a claim (or if you’re aware you might need to make a claim).

3. Use Your Broker as a Resource

Your broker is there to help you. Not only do they do the price shopping and research to find you competitive quotes that match your company’s insurance needs, but they’re also there to answer your questions and advocate you through the claims process. They’re there to ensure you’ve got the insurance you need and to help you will all things related to insurance. They can provide additional risk management resources and help you understand your coverage.

4. Consider your CGL policy as a last line of defence.

Insurance should always be your last line of defence. While you may be covered, you’ll still need to pay a deductible and your policy has limits. You may also see a rise in your premiums after a claim (although this is not always true). Plus, lawsuits aren’t many people’s idea of fun.

Your insurance should be just one part of a risk management plan to protect your business’ financial security. If you can prevent lawsuits in the first place, you will likely save money in the long run and save you from many headaches that come with legal action.

Do I need commercial general liability insurance?

In short, yes. This is essential, basic coverage to protect your business if someone is injured or has their property damaged while on your company’s premises. Lawsuits can be extremely costly, and this insurance provides you with a measure of financial security and peace of mind. It’s also important to note that some contracts require insurance coverage.

Talk to one of our brokers for more information or to get a quote today. They can help you determine your small business’ insurance needs and which commercial general liability coverage suits you best.