Boat Accidents And Insurance In Ontario: A Lawyer’s Perspective

The Marine Liability Act was recently changed, increasing the damages cap for loss of life or personal injury in boating accidents due to negligence from $1,000,000 to $1,500,0001¹. This 50% increase was due to inflation as the damages cap had not changed since 2001. The change exposes individuals with boat
insurance policies who have not accounted for this damage cap increase in two ways. First, they will be underinsured and exposed to personal liability (pay out of their own pocket) in the event that they are found to be negligent in a serious boat collision and do not have $1,500,000 worth of liability insurance coverage.

Second, if they have an uninsured/underinsured boater policy in place (a policy that steps in for an uninsured or underinsured defendant) for less than the $1,500,000 cap, they would be unable to recover that amount from insurance in a serious accident if an uninsured or underinsured boater was negligent; instead, they would receive only the amount up to their own uninsured/underinsured policy and they would then have to attempt to recover the remainder through the personal assets of the defendant, up to the damages cap.

With Safe Boating Awareness Week in Ontario having just concluded and this recent change to the Marine Liability Act, now is as good a time as any to revisit boat insurance and liability in Ontario. It is also very important to remember that boat insurance is not mandatory in Ontario. There are many boaters out there without insurance, and surely those boaters who went uninsured with the old $1,000,000 cap of liability exposure will not care if that exposure is now $1,500,000. The need to have uninsured/underinsured boater coverage has never been more important, as a lot of boaters out there will think they are fully insured but are only insured up to the old damages cap.

Several years ago, there was a terrible boating collision on Lake Simcoe. I was retained to represent the injured family members. My clients were fishing while anchored when they were struck by another boat. The boat operator claimed to have never seen them because his bow blocked his field of vision. The operator was charged by the York Regional Police Marine Unit.

My client had worked in Aurora and Newmarket for many years and had a serious future loss of income claim due to the injuries suffered in the accident. Though incredibly unlucky to be involved in the accident, the family was lucky that the negligent boater had his own boat insurance policy. The policy covered the negligent boat operator in the lawsuit, and this very serious case was settled prior to trial.

Not thinking about boating insurance can cost people dearly whether they or someone in their family are injured or if they harm someone while operating their boat.

There are two important scenarios to think about:

1. Injuries to You or Your Family

Due to the circumstances involved in boating accidents, including frequent user error, alcohol, high speeds, boating at night, and the lack of safety measures on most boats, the injuries suffered are often life-altering. It is very important that boaters have proper uninsured/underinsured boat policies. This will cover you and your family members if you are injured by a boat that does not have insurance. This means that your own boat insurance steps into the shoes of the uninsured boater

2. Injuries Caused by You or Your Family

It is as simple as this: You risk your house, cottage, investments, wages, etc., if you operate a boat without insurance. Look at the above case I mentioned on Lake Simcoe. If that boater did not have his own insurance, he would have had to sell off his assets to pay the Judgment against him as well as his own legal fees. It would have caused major financial hardship to his family.

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Due to the fact that boat accidents usually have such severe and life-altering injuries, it is incredibly foolish to operate a boat without appropriate (or any) insurance. Call your insurer to review your policy options. Be sure to ask about the uninsured/underinsured protection measures to cover yourself and your family in all scenarios.

Also, ask your insurance adjuster about the interplay between your home and cottage insurance policies as well as any umbrella policies that may apply to boating coverage, as some very small boats may be covered, but it often depends on factors like boat size and horsepower. Again, focus on uninsured protection for your family, as these will likely not be covered under a home or cottage policy.

Damages for boat accident cases can be substantial, particularly when assessing income loss and future care needs. If you operate your boat in an affluent cottage area, the people around you would likely have high-income loss claims if injured. Take that into account when you discuss your boat policy insurance limits with your insurer.

Though this article has focused on the marine liability damages cap and liability insurance arising from injury or death, be sure to also discuss the property damage component of your boat insurance policy, as your policy should account for a combination of damages for injury plus property damage arising in an accident, including damage to a boat itself and the costs of things like salvage for a boat wreck.

Though boating can provide great enjoyment and recreation throughout cottage country this summer, it is very important that you think about boat insurance at the start of every season, particularly this season with the recent changes to the damages cap.

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Carr Hatch is a Partner at Thomson Rogers. He has represented numerous families across Ontario in boating and marine liability cases, including cases in Muskoka, Georgian Bay, and Lake Simcoe, as well as on the Intercoastal Waterway in Florida. Carr can be reached at 416-868-3208 and chatch@trlaw.com

1. The damages cap applies for negligence but not for recklessness or intentional acts of
   the defendant boater. The recklessness standard requires knowledge that the damage
   would probably result and is very difficult to establish. ↩︎