Currently, non-negligent vehicle renting and leasing companies are subject to unlimited liability for acts committed by vehicle operators. This liability is based solely on the companies’ ownership of the vehicles involved.

Alberta is currently one of a handful of North American jurisdictions which holds the owner of a vehicle vicariously liable for the actions of the operator of the rented vehicle. The legislation, Bill 49, amends the Traffic Safety Act to establish a $1 million cap on vicarious liability for owners of vehicles leased for a period of 30 days or more. The $1 million cap is less any amount that is recovered under third party liability policies.

The government, however, did not agree to TRALA’s efforts to extend the liability cap to owners of short-term rental vehicles at this time. The bill also amends the Insurance Act to provide the authority for the government to reorder insurance primacy through regulation.

These new regulations, expected to be completed in 60 to 90 days, will make the responsible operator of a rented or leased vehicle the primary insured in the event of a claim. The government has agreed to consult with TRALA and its industry allies during the drafting of these insurance regulations. Bill 49 is expected to move to second reading and then to final passage before the Legislative Assembly rises this week.

TRALA has already been successful in getting vicarious liability reform passed in Ontario and is working with B.C. officials to enact similar changes in that province as well.