OTA seeks overhaul of Facility Association insurance access
The Ontario Trucking Association (OTA) is developing a proposal to reform how commercial carriers access Facility Association (FA) insurance, aiming to limit long-term reliance on the system and address what it describes as misuse by high-risk operators.
The association said it is working with insurance experts and brokers to finalize the proposal, which it plans to submit to Ontario’s minister of finance within 30 days.
Facility Association is meant to be an ‘insurer of last resort’, providing coverage for operators unable to secure policies in the private market. It functions as a statutory insurance pool made up of every company licensed to write automobile insurance in the province. Premiums, losses and expenses are pooled and shared among insurers based on their market share.
“Facility insurance was never intended to be a permanent landing spot for carriers that fail to meet basic safety standards,” said OTA president Stephen Laskowski in a news release. “Currently, the system is being exploited by fleets playing a dangerous game of ‘whack-a-mole’ to stay on the road. We have seen mass migrations of trucks associated with Ontario-based fleets registering out of province to exploit different insurance loopholes when it suits their needs. As soon as one provincial agency realizes the situation and catches up to them, the operations simply jump to the next, less restrictive regime.”
Under the proposed changes, carriers must be rated to reflect their true safety risk. Those who cannot improve their performance within a defined period should be removed. If they remain uninsurable by the private sector, then they pose too much of a risk, OTA argues.
The association acknowledged challenges that have previously complicated reform efforts, including the need to support new entrants without Canadian insurance history, manage market volatility during tight insurance cycles, and avoid sudden disruptions to the supply chain if large numbers of carriers lose coverage.
OTA said its proposal will aim to balance those concerns by providing a limited window for improvement while preventing repeat offenders from cycling through the system.
“To make this work, we need to build hard fences around the system – rules and timelines that are absolute and cannot be manipulated by anyone,” added Geoff Wood, OTA senior vice president of policy. “By working with insurance experts, we are ensuring our policy is legally sound but uncompromising: the era of using evasive tactics to bypass safety standards is over. Improve your safety or exit the industry.”
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Facility allows the irresponsible carrier to operate with no consequences even if there’s no operational improvements. My question has always been how does a marginalized carrier manage to financially operate when carrying the burden of excessive insurance. I believe these are the carriers that participate in illegal activities so these added costs are of little or no concern. So, why government agencies don’t focus all their attention on them is simply beyond me!
There is a quiet absurdity embedded deep within Canada’s commercial trucking system—one that almost no one outside the industry understands, and even fewer are willing to confront.
It’s called Facility Insurance. And for commercial carriers, it has become a shield for failure.
Let’s be clear about what Facility Insurance was designed to do. In the personal auto world, it serves a legitimate purpose. Society has decided that driving is not optional. If you need to get to work, take your kids to school, or access basic services, you need a vehicle—and by law, that vehicle must be insured. Facility Insurance ensures that even high-risk drivers can obtain coverage. It protects the public from uninsured motorists.
That logic is sound.
But then we applied the same logic to commercial trucking—and that’s where the system breaks.
No one is forced to operate a trucking company. Running a commercial carrier is not a right; it is a privilege. It is a business decision, governed by risk, responsibility, and competence. Insurance, in this context, is not a social safety net—it is a gatekeeper.
And yet, when a carrier fails to meet the underwriting standards of the voluntary insurance market—when insurers, whose entire business is measuring risk, say “no”—we override that decision. We place that carrier into Facility Insurance, effectively saying:
You can operate anyway. The rest of the industry will carry you.
Think about what that means.
A carrier with poor safety performance, weak compliance, or questionable operational practices is not removed from the system. Instead, its risk is redistributed—absorbed by the very carriers who have invested heavily in doing things right.
This is not regulation. It is distortion.
It is a system where:
Responsible operators subsidize irresponsible ones
Safety signals from the insurance market are ignored
Competitive balance is quietly undermined
And the consequences are predictable.
First, safety erodes. When the market’s natural mechanism for removing high-risk operators is neutralized, those operators remain on the road.
Second, pricing becomes detached from reality. Carriers that should be priced out of existence continue to compete—often undercutting compliant operators who bear the true cost of risk.
Third, accountability disappears. If failure carries no consequence beyond being placed into a different insurance pool, then failure is no longer a deterrent.
This is the uncomfortable truth: Facility Insurance, as applied to commercial carriers, does not protect the public—it protects the least qualified participants in the system.
And it does so at the expense of everyone else.
When Failure Turns Catastrophic
Consider what happens when the system doesn’t just bend—but breaks.
A recent U.S. case, Melissa Dzion v. AJD Business Services & Kahkashan Carrier, resulted in a jury awarding $1 billion following a catastrophic trucking accident.
Strip away the headlines, and a harsher reality emerges.
If a carrier involved in a crash of that magnitude were operating under a facility-style insurance backstop, the outcome would follow a predictable pattern:
The insurer pays only up to the policy limit—typically a few million dollars at most
The remaining liability—hundreds of millions—falls to the carrier
The carrier collapses under the weight of the judgement
The victims recover only a fraction of what was awarded
And then, quietly, the cost begins to spread.
Insurers absorb the loss within the pool. Premiums adjust. The burden is redistributed across the system—ultimately landing on the desks of compliant operators who had nothing to do with the failure.
A billion-dollar judgement does not get paid. It gets diluted.
But the more important question is this:
Why was that carrier on the road in the first place?
If the voluntary insurance market had already determined that the risk was unacceptable, then overriding that signal is not an act of fairness—it is an act of negligence.
Facility Insurance doesn’t prevent catastrophe. It postpones accountability long enough for catastrophe to occur.
The Principle We Are Ignoring
There is a fundamental principle at stake here, one that policymakers seem reluctant to acknowledge:
Facility Insurance makes sense where insurance is mandatory for participation in society. It does not make sense where participation itself is optional.
If a trucking company cannot obtain insurance in the voluntary market that is not an injustice. It is a warning. It is the system functioning exactly as it should—identifying risk and signalling that the operator is not fit to be on the road.
Overriding that signal doesn’t solve a problem. It creates one.
A System That Chooses the Wrong Outcome
The question is not whether high-risk carriers deserve access to insurance. The question is why compliant carriers—and by extension, the broader public—should be forced to absorb that risk.
At some point, we need to decide what we value more: universal access to a voluntary business, or the integrity of a system built on safety, accountability, and fair competition.
Right now, we are choosing wrong.
Or, do not allow it at all. There is always a market solution available for a carrier who can prove to a private insurer that they are serious about lowering their risk and taking definitive measures to do that. There is nobody better suited than the private insurer to make sure this is happening.
FA insurance does not manage the risks they are taking on. They allow fleets add and delete trucks at will with no oversite. There is no check system in place to ensure the number of trucks running up and down the road is properly reported. The brokers representing the FA insurance are sometimes actively assist rogue carriers play the game with financial compensation coming from the carrier.
There is no place for FA Insurance in commercial trucking.