Industry Wire

Vicarious Liability Cap for Rentals Introduced in Alberta

Legislation to cap vicarious liability for owners of short-term rental vehicles has been introduced in Alberta, Canada. Bill 30, introduced on March 16, would put a $1 million cap on vicarious liability exposure for owners of vehicles rented for 30 days or less. Currently, such vehicle owners are potentially subject to unlimited vicarious liability claims. To see a copy of Bill 30, please click here.

The introduction of Bill 30 follows the enactment in December 2007 of Bill 49. This legislation capped previously unlimited vicarious liability at $1 million for owners of vehicles leased for more than 30 days. TRALA is still working with its allies in Canada to urge the government to complete the drafting of regulations to implement Bill 49 and its vicarious liability reform.

Bill 49 also provides for the reversal of insurance primacy for claims involving vehicles operating under both long-term lease agreements and short-term rental agreements. This provision would reverse the current statutory regime that holds lessors and rental companies as the primary insured in the event of claims. Once implemented, the provisions of Bill 49 would make the vehicle operator the primary insured, and the lessor or rental company could only be vicariously liable for the difference between the operator’s insurance coverage and the $1 million cap.

TRALA is working with the Alberta Ministry of Finance and Ministry of Transportation to push for the implementation of Bill 49 and the passage of Bill 30. TRALA appreciates the help of its industry allies in Canada, including the Canadian Finance and Leasing Association (CFLA) and the Associated Canadian Car Rental Operators (ACCRO). For more information, contact TRALA’s Tom James at 703-299-9120 or at tjames@trala.org.