May 16, 2018
Congratulations to Hughes Amys' Greg Bailey, Sabina Arulampalam and Ryan Khan in SABS priority dispute in which Arbitrator found rideshare policy was higher in priority and obliged to provide benefits to a ridesharing passenger
Author Michael S. Teitelbaum
Related Lawyers Sabina Arulampalam, Ryan A. Khan and Greg Bailey
Northbridge Insurance and Intact Insurance
, a 20-page decision by Arbitrator Vance Cooper in a SABS priority dispute, dealt with a novel issue arising from the shared economy services phenomenon:
Which insurer, as between an owner's policy and a rideshare policy, is higher in priority for a SABS claim by a ridesharing passenger?
Well Done and Congratulations to Greg Bailey and Ryan Khan, who acted as counsel in the arbitration, and Sabina Arulampalam, who helped with the preparatory work, in successfully advocating that it was the rideshare policy which had priority.
A non-cuttable and non-pasteable version of the decision is attached.
The following is a brief summary of the facts and result:
On November 13, 2016, the SABS claimant was a ridesharing passenger in a 2012 Honda Odyssey that was being driven by a ridesharing driver. Northbridge insured the vehicle under a standard Ontario Automobile Policy. It was unaware that the driver was operating the vehicle as a ridesharing driver. Intact issued a policy of insurance to Rasier Operations B.V. for the period of July 7, 2016 to July 7, 2017 under which any ridesharing driver and any ridesharing vehicle owner were named insureds and Uber Canada Inc. was an additional named insured.
At the time of the accident, the vehicle was in the "post-acceptance period" as defined in the Intact policy. This period commences from the moment the ridesharing driver accepts a request for transportation services for compensation through the digital network, including while the vehicle is en route to pick up a ridesharing passenger, and is carrying that passenger including the dropping off of such passenger, and ends when the last passenger departs from the vehicle, the trip is ended or the trip is cancelled, whichever is the later.
Arbitrator Cooper stated at pages 8-9 of his reasons:
I am satisfied, on a plain reading of IPCF 6TN - Coverage for Ridesharing Endorsement, that Intact provides primary coverage for statutory accident benefits in relation to the claim of Romello B., being an occupant in the rideshare vehicle during the post-acceptance period and by reason of Romello B. having no access to any other policy of insurance (apart from the Northbridge policy).
Intact argues that Romello B. could have applied to either Intact or Northbridge. Both insurers provided accident benefit coverage to the owner [of] the vehicle such that there would be a tie for priority under section 268 of the Insurance Act. Intact argues that the "super priority" specified in section 2 of IPCF 6TN -- Coverage for Ridesharing Endorsement does not apply to Romello B. as the occupant. Romello B. applied to Northbridge and that should end the matter. However, this approach ignores the clear and unambiguous statement in the change form under consideration. The Intact coverage as outlined in the certificate of insurance (which includes accident benefit coverage) is primary coverage
(emphasis added). The FSCO bulletin, described above, contemplates priority disputes.
It is agreed between the parties that Northbridge was unaware that Ali P. was operating his vehicle as a rideshare driver. It stands to reason that Northbridge would not have been able to assess the risk associated with the Ali P. vehicle being used as a rideshare vehicle. Northbridge was certainly not in a position to price the risk and charge premiums to address this risk. It is one thing for Ali P. to transport family and friends in his vehicle as a courtesy or favour. In these cases, such occupants could well look to Northbridge for accident benefit coverage. It is another thing for Ali P to operate his vehicle for several hours per day and potentially for several or many days per week as a rideshare vehicle, take on unrelated and unknown individuals for compensation and for such individuals to look to Northbridge for accident benefit coverage. This is a risk specifically contemplated by Intact under its ridesharing endorsement. Presumably, Intact received premiums to address this risk.
Individuals, such as Romello B., when an occupant of the rideshare vehicle during the pre-acceptance or post-acceptance period, should look to Intact for accident benefit coverage (assuming that they do not have access to their own accident benefit coverage as a named insured, spouse of named insured, deemed named insured, listed driver, etc. under a separate policy of automobile insurance).