Cade Associates were delighted to submit the following as an article to the 2014 FOCA Lake Stewards Newsletter. To see the entire newsletter as a PDF, Click Here.

Risk Management and Insurance for Road Groups

For the hundreds of organizations across Ontario concerned with the maintenance and upkeep of roadways, frequent topics of discussion include risk management, loss prevention and insurance.

With respect to road maintenance, the efforts of individual volunteers keep thousands of seasonal and year-round properties accessible. It is critically important that these volunteers, and the property owners they serve, take measures to mitigate loss and minimize risk, and this can include arranging for appropriate and adequate insurance protection.

Many Road Associations have availed themselves of the FOCA Association Insurance Program offered as one of FOCA’s member benefits.
A Commercial General Liability (CGL) policy will respond to claims of bodily injury, property damage and personal injury (libel, slander, wrongful eviction, etc.) to third parties that arise out of the activities and operations of the Association. The CGL policy responds to investigate and defend the claim, and to pay those compensatory damages for which the Association becomes legally liable, up to the limits of the policy. Volunteers acting on behalf of the Association are insured under the policy and are protected by the Association’s CGL policy against any claims brought against them directly as a result of conducting their volunteer duties under the direction of the Association.

In the absence of an Association insurance policy, a third party claiming damage might instead list all property owners on the road, requiring the home/cottage policies of each individual property owner to respond.

It is important to note that property and liability insurance wordings are not standardized. Therefore, property owners on a private road should obtain from their own personal insurance provider written confirmation that their homeowners or cottage insurance policy will provide them with liability coverage, in the event that they are named in a claim arising from an incident occurring on their private or common access road. Some personal property insurance providers in Ontario do not offer this protection. The FOCA insurance policy automatically includes liability protection for the Association’s members ‘in good standing.’

Each road is unique and requires a customized insurance solution. If you have any questions or would like more information regarding insurance for your Road Association, call 1-844-CADE-1ST or www.cadeinsurance.com/foca. FOCA’s Association Insurance Program coverage is also available for lake, cottage, and landowning organizations. Contact Cade Associates to find out more.

With respect to risk management and roads, we do recommend that Associations specifically consider the following:

Contractors
Many Associations hire contractors to provide services throughout the year, including grading and snow removal. The Association should request that their contractor provide a Certificate of Insurance which clearly identifies the Association as an Additional Insured on the contractor’s policy. This ensures that the contractor’s policy will respond to defend the Association if the Association is named in a claim arising out of the contractor’s activities. The Certificate will also provide evidence of the contractor’s insurance limits and coverages. Contractors are able to obtain this certificate normally at no additional charge from their insurance provider. Depending on the nature of the contractor’s work on behalf of the Association, a WSIB ‘Clearance Certificate’ should also be provided by the contractor.

Signage
Signage at roadway entrances that reads ‘Private Road’ can assist in limiting access and use. Appropriate speed signs should be posted along the roadway. Further, signage should be strategically placed in advance of any significant change in the condition of the road, be it a sharp bend, blind corner or hill, or significant drop-off on the roadside.

Fee Collection
Always a difficult Association topic, Insurers strongly recommend against the posting of names of members whose fees are outstanding, to avoid exposure to claims of libel. In the unfortunate event that collection of fees requires further action, the court system (Small Claims Court) offers an alternative to a Collection Agency and minimizes exposure to claims of libel and slander.

Final note: FOCA member Road Associations can access additional resources at www.foca.on.ca (search: road)