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Passenger Ship Marine Insurance

Passenger Ship

As a ship operator who:

  • Is engaged in the carriage of passengers from one place in Canada to the same or another place in Canada, either directly or by way of a place outside Canada
  • Operates a commercial or public purpose ships (where no fare is charged)

you are obviously aware of the mandatory insurance requirements of your industry. As the owner and/or operator, under the Marine Liability Act, you are held liable for the death or personal injury of passengers that result from a marine incident involving your vessel.  

At ALIGNED, we too are well aware of the statutory and regulatory requirements in the shipping trade. We offer coverages that keep you in legal compliance as well as coverages that go above and beyond the minimum and that no maritime operator should be without.


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Are You Exempt from Mandatory Insurance Coverage?

According to the Government of Canada website, The Regulations do not apply to:

  • adventure tourism, as defined in subsection 37.1(1) of the Marine Liability Act (see below)
  • the carriage of a sail trainee
  • an international carriage
  • a carriage by pleasure craft, as defined in section 2 of the Canada Shipping Act, 2001 (see below)
  • search and rescue operations carried out by the Canadian Coast Guard Auxiliary
  • the Government of Canada or the government of a province (because they are self-insured), or an entity entitled to indemnification by that government

The Marine Liability Act defines “adventure tourism” as tourism activity that meets the following conditions:

  • (a) it exposes participants to an aquatic environment;
  • (b) it normally requires safety equipment and procedures beyond those normally used in the carriage of passengers;
  • (c) participants are exposed to greater risks than passengers are normally exposed to in the carriage of passengers;
  • (d) its risks have been presented to the participants and they have accepted in writing to be exposed to them; and
  • (e) any other regulations made by the Governor in Council.


And the Canada Shipping Act defines a pleasure craft as:

“A vessel that is used for pleasure and does not carry passengers, and includes a vessel of a prescribed class.”

Whether your operations exempt you from mandatory insurance coverage or not, with the amount of liability you face for passengers, property and equipment, having coverage isn’t really an option. Compensation costs for injuries or deaths and the costs resulting from damage to ship and cargo would devastate a marine based business of any size. 

We’ve outlined standard coverages for shipping operators below but first, we’ll review the requirements for those operators who have been mandated to maintain insurance coverage.


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To Be In Compliance You Must…

Maintain a minimum of $250,000 of liability insurance coverage, multiplied by the passenger capacity of the ship.

Provide proof of insurance when requested by a designated Transport Canada officer that is either:

  1. a Certificate of Insurance issued by an insurer (see attached), or
  2. a Certificate of Entry, issued by a Protection and Indemnity (P&I) Club that is a member of the International Group of Protection and Indemnity Associations

Proof of insurance may be in paper or electronic format. You must keep it on board the ship at all times.

You have 24 hours to provide proof of insurance after being asked.

Failure to provide proof of insurance could result in a fine of up to $250,000.

For Fleets

You must carry:

  • the certificate of insurance on board one ship, and
  • a copy of it on board every other ship in the fleet

And, the certificate of insurance must state:

  • the amount of insurance for each ship in the fleet, or
  • the amount that applies to the ship with the highest passenger capacity, and the number of ships for which that amounts applies, and
  • the policy provides the same coverage as a separate policy for each ship would

If there is not enough room to list all ships in the fleet on the front of the insurance certificate, they must be listed on the back.

This is a summary of the information found here. For further information, please follow the link.


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Coverage that Protects your Maritime Operations

While the mandatory insurance regulations are important to help safeguard passenger safety, having more than the minimum coverage prescribed by law is the only way to truly protect your business from economic collapse following a peril at sea. Below are summaries of the coverages we can provide that you will need to protect your operations.

Protection and Indemnity Coverage

This coverage protects your liabilities as they pertain to third parties that may be injured due to your business operations. P&I can cover the overwhelming costs resulting from:

  • Passenger illness, injury or death
  • Damage to other vessels in a collision
  • Spills and subsequent cleanups
  • Wreckage removal
  • Damage to slips and docks

Based on the costs alone, the necessity of Protection and Indemnity coverage is clear – whether required by law or not.

Hull Coverage – Considering vessel costs and the costs to repair or replace parts and equipment, Hull Coverage is insurance you can’t afford to be without. This kind of coverage protects your vessel, and other equipment, in case of peril occurring over water. Click here for more information on Hull Coverage.

Cargo Coverage – Cargo aboard your vessel is likewise valuable and expensive to replace. Having coverage that covers your load is a must for professional shipping operations and may be the difference between getting contracts and not. Cargo insurance protects cargo from any number of perils, depending on the contract. Contact us for more specific information.   

ALIGNED Coverage for your Shipping Operations

At ALIGNED we’re up-to-date on regulations affecting businesses in most sectors – including maritime operations. More importantly, we know all too well the heavy costs associated with maritime risk. Contact us today and speak with an Advocate who is on your side and knows how to keep your operations safe.  


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