MISSISSAUGA, Ont. – The legalization of marijuana will have significant impacts on the insurance and transportation industry as insurance companies will have to extend coverage offerings and anticipate the risks involved in underwriting and dealing with impairment claims.
That was message delivered at the educational half-day seminar put on by Northbridge Insurance on September 13 at Mississauga’s BraeBen Golf Course. The seminar’s main focus was on the legalization of marijuana in Canada set for July 1, 2018. Northbridge had its own Lynne Cook discuss what the legalization of marijuana means for insurance companies and what fleets can expect when July 1 comes.
“The marijuana industry in Canada is estimated to be worth between $80-$100 million in Canada, so this might not be bad prospect for insurers,” Cook said.
Currently, the government of Canada proposed that come July 1, marijuana users could grow up to four marijuana plants in their own home. Cook said that because of legalization, gone will be the days where insurance won’t cover your home if you have grow operations.
“Growing marijuana in your own home has inherent problems for the insurance industry because grow operations in homes have an inherent risk of increased fire, vandalism,and burglary, which insurers don’t want to touch,” she said. “However, with legalization, insurers will potentially be able to openly provide policy and charge appropriate premiums for those who will choose to have grow operations in their home. This effect will make grow operations safer because insurance companies are going to insist on certain safety protocols and measures to reduce the risks.”
As far as transportation goes, Cook says that Northbridge still believes impaired is impaired and trusts the statistics that show marijuana causes a slowed reaction time, blurred vision, and drowsiness, all risk factors while operating a vehicle.
Currently, Canada has not outlined a minimum impairment limit on the amount of THC one can consume, though it is expected to follow the baseline rolled out by states which have legalized marijuana for recreational use. Currently, Montana, Colorado, and Washington all have a limit of 5 nanograms per microliter of blood for personal vehicles. The U.S. DOT however, has banned the use of marijuana by commercial drivers.
“And that’s not a bad standard to go by,” Cook said stating she thinks the same rule could be applied to Canadian truck drivers. “The DOT is taking a zero tolerance, because regardless of the level of impairment, what they are recognizing is the risky behavior that comes along with this. Its their stance if drugs are being used, they will end up in the workplace.”
Currently, if commercial drivers are caught driving with THC in their system, Cook said they can be charged with impairment, which could significantly alter their insurance coverage.
“Under first party property, insurers won’t pay for loss or damages if the person is unable to maintain proper control of their vehicle, while they are under the influence of an intoxicating substance,” she said warning that even if THC is detected in your blood, and not impairing you, you could be on the hook. “THC positive results can show up 6-30 days after use.”
If you’re injured in an accident while you’re found to be impaired by alcohol or drugs, benefits provided by insurance are limited to rehabilitation and attendant care, she explained.
And finally, if you’re driving impaired and get into an accident where you seriously injure or kill someone, and a claim is advanced again you, your insurance will defend you in this case.
“The courts have ruled it is against public policy to deny liability…because victims in this case would be left without compensation.”
However, Cook warned, if this happens within your own fleet there is a risk that the fleet will suffer from independent claims of negligence launched against them.
“In these cases, we often see allegations against employers who fail to implement alcohol and drug policies and fail to screen and supervise employees,” she said. “Anytime you have a driver impaired…it makes the claim must more difficult to manage and control cost.”
Therefore, Cook said, all companies should have an alcohol and drug policy rolled out as soon as possible and fleet managers should ensure that they are managing and supervising their drivers to ensure compliance before and beyond the July rule.