FLOOD RISK: A Growing Concern and Yet, No Clear Solution - RIMS Canada
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FALL 2020
FLOOD RISK: A Growing Concern
and Yet, No Clear Solution
by Jocelyn Aucoin, senior associate, Clyde & Co
S
torms, power outages, How can we protect our-
landslides, and road selves against such risk? First, it
closures; as a result, should be noted that most basic
last year’s floods were identi- residential insurance policies do
fied as the weather event of not cover damage resulting from
2019 in Quebec. Indeed, tens floods caused by the overflow of
of thousands of residences a body of water. Such absence
and businesses were flooded, of coverage is explained by the
and an even greater number of fact that flood zones are clearly
citizens were affected. identified and that rising water is a
Floods of varying intensity foreseeable natural phenomenon,
occur every year in Canada. whereas the fundamental princi-
Historically, the country has been ple of insurance is that it covers
susceptible to flooding across “unforeseeable” situations.
various provinces. Manitoba's Red For several years, however,
River Valley is famous for being certain land development has
particularly subject to situational created vulnerable areas leading
vulnerability—its most severe flood to inadequate drainage infrastruc- insurers have developed products president of federal affairs of the
being recorded in 1997, which ture. In Ontario, for example, to respond to consumer demand Insurance Bureau of Canada (IBC)
damaged an estimated 1,000 changing levels in the severity of for insurance coverage specific to has addressed the limited evi-
homes. Similarly, Alberta's flood precipitation from one extreme floods. Such coverage is neverthe- dence for these claims, suggest-
in 2013 resulted in an approxi- to the other have raised concern less quite rare, and, when offered, ing the lack of correlation between
mate $6 billion in property damage for volatility and the increased generally carries high deductibles high-risk activity and income. A
and financial losses, and the likelihood of flooding. With the combined with low coverage flood model developed by the IBC
evacuation of an estimated 80,000 impact of climate change, the limits. While coverage may be determined that approximately
SHUTTERSTOCK/ EPPIC ADVENTURES
residents. These major floods damage caused by water will likely available for certain properties, 1.8 million households in Canada
and many others that cause the continue to increase in frequency those located in high flood-risk are regarded as being at very high
forced evacuation of residents, and significance. zones are almost never covered. A risk for flooding.
represent the heavy economic common misconception has been Typically, flood policies that
burden that threatens the financial INSURERS' RESPONSE that residents of high-risk zones are available for purchase are
situation of the businesses and Considering the proliferation can afford higher insurance premi- subject to a limit; however, several
citizens affected. of claims in this regard, some ums. However, Craig Stewart, vice continued on page 2
Con f e r e nc e • E du c a t ion • A d v o c a c y FA L L 2 0 2 0 / 1
R IMS CA N A D A .C A
Flood Risk: A Growing Concern and Yet, No Clear Solution
continued from page 2
insurers have implemented caused by a “flood” as defined in or a drainage ditch constituted a to compensate for the additional
additional flood endorsements to the flood endorsement. Therefore, “body of water” even though they costs of accommodation and
extend coverage for policyholders. the Ontario Superior Court of may have been dry for several food during evacuation, for repair-
While a benefit to these add-ons is Justice held that the insured was hours before an overflow. Finally, ing or replacing essential personal
they help to streamline the claims not entitled to coverage under the the Court of Appeal reiterated that property that was damaged,
process, the language used to Flood Endorsement. the provisions granting coverage, and for repairing damage to the
define “flood” has contributed to The Court of Appeal reviewed such as the flood endorsement, main residence.
disputes over application. in great detail the wording of must be construed broadly. Even so, the program is now
the policy in order to determine Construing the flood endorsement more restrictive than it was
THE COURTS' whether the event constituted otherwise would nullify coverage previously and includes several
INTERPRETATION a “flood” within the meaning of for the “obvious risks” identified limits to the amounts that may
A recent Ontario decision, Le the policy. in the endorsement and defeat be granted.
Treport Wedding & Convention The Court of Appeal con- the legitimate expectations of Nevertheless, when floods
Centre Ltd. v. Co-operators cluded that the trial judge erred the insured as to the coverage of the magnitude that affected
General Insurance Company, in importing the exclusion of purchased. Accordingly, the Quebec in the spring of 2019
2020 ONCA 487, addressed "surface water" flooding into flood endorsement applied to the occur, thousands of citizens
this topic. Following a historic the Flood Endorsement for two loss suffered by the Insured and seek support from their govern-
rainstorm event in the Greater reasons. First, the Court of Appeal caused by the flood. ment, which is then faced with a
Toronto Area on July 8, 2013, the ruled that an endorsement does However, coverage has not significant economic burden. Aid
premises owned by Le Treport not operate independently from always been granted in favour of is therefore also available through
Wedding & Convention Centre Ltd. the policy, as it does not have "a the insureds. In an earlier deci- the federal Disaster Financial
was flooded. Water entered the standalone existence" from the sion, Parker Pad & Printing Ltd. v. Assistance Arrangements (DFAA),
building through the doors, floor policy; they must be read together. Gore Mutual Insurance Company, administered by Public Safety
drains and ceilings, and caused Second, giving effect to the 2017 ONSC 3894, the Court Canada, to compensate those who
extensive damage to the premises. definition of “surface water” when dismissed the plaintiff's claim for have experienced losses and to
A claim was made to Co-operators interpreting the flood endorsement coverage under its flood endorse- finance recovery.
General Insurance under its “all- would effectively nullify or render ment, citing lack of evidence that Flood-related issues con-
risks” insurance policy. There was nugatory the intended coverage. the damaged premises surrounded tinue to be an ongoing concern
a dispute as to whether the flood Indeed, flood coverage would be a “body of water.” across the country. The federal
endorsement of the policy applied nullified in almost all cases as government recently considered
to the claim. most buildings are located some ALTERNATIVES TO creating a low-cost national flood
The Ontario Superior Court distance from water. Accordingly, TRADITIONAL INSURANCE insurance program to protect
of Justice held that the flood the flood endorsement must be In addition to insurance, alternate homeowners at high risk of
endorsement did not apply for read without giving effect to the opportunities may exist to receive flooding who are without adequate
two reasons. First, the trial judge surface water exclusion. compensation for losses sustained insurance protection. When asked
concluded that the damage to the The Court of Appeal further due to flooding. However, it is about developments for the pro-
insured's property was caused concluded that the event was a important to note these alterna- gram, Public Safety Canada did
by “surface water,” which was “flood” within the meaning of the tives are also subject to limita- not offer a direct response, simply
defined in the Policy as “water or flood endorsement. The ordinary tions. In Quebec, for example, expressing “full consideration”
natural precipitation temporarily meaning of the word “flood” citizens may be eligible for the for recommendations proposed
diffused over the surface of the included “the massive, forceful, province’s public safety depart- by IBC in its June 2019 report,
ground.” Consequently, the “sur- and fast-moving flow of water” ment’s general indemnity and titled Options for Managing Flood
face water” exclusion contained into the property. Further, the flood financial assistance program. The Costs of Canada's Highest Risk
in the policy operated to exclude endorsement did not require a program was enacted by Order in Residential Properties.
coverage. Second, the trial judge body of water to have a permanent Council on April 10, 2019, and After reviewing international
found that the event was not existence. In other words, a creek aid may be granted, in particular, experience, IBC analyzed three
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R IMS CA N A D A .C A
potential schemes that could be would be provided in cases similar measures to address the example), creates the possibility
implemented: where premiums are too issue of the insurability of flood that the premium rate paid
high. The government’s risk. The United Kingdom has will not reflect the full risk of
● Option I: A pure market solu- exposure could also be launched Flood Re, a reinsurer loss and that the funds available
tion pursuant to which private reduced by transferring some subsidized by a levy imposed on in the event of a loss will
properties would no longer of the risk to the global all insurers that offer home prove insufficient.
be eligible for government reinsurance market. insurance. The United States In short, regardless of the
financial assistance and ● Option III: Create a high-risk created the National Flood perspective from which the
the risk would be borne by flood insurance pool. A high- Insurance Program (NFIP) in issue is addressed, the allocation
homeowners. Homeowners risk flood pool of properties 1968. To benefit from NFIP of costs among citizens, their
would therefore have to move, would be separated from flood insurance, the property insurers, and both levels of
self-insure, or transfer their what is considered normally must be located in a community government after a flood is a
flood contingent liability to insurable risk. The group would that participates in the program significant challenge. For that
the private insurance market. be managed by a public-private and that agrees to apply reason, all participants must
Since premiums are risk- partnership, administered by sound floodplain management increase their efforts to implement
based, a portion of high-risk the insurance industry but gov- standards. In some cases, NFIP measures that are preventive,
homeowners would opt out of erned and guaranteed by the premiums may be subsidized. rather than corrective. Whether
the insurance market, and the government/global reinsurance The complete withdrawal of that consists of elevating critical
government could invest in market. The pool would need government aid would allow the equipment (heating, ventilation,
adaptive infrastructure. pre-capitalization to get up government to focus on mitiga- electrical transformers, communi-
● Option II: An evolved status and running as well as ongoing tion rather than disaster manage- cation systems, etc.) in commer-
quo in which the risk would capitalization that would ment, an area in which insurers cial buildings above expected
be borne by a combination be supported by premiums are generally more efficient, but flood levels or even using
of homeowners and govern- paid into the pool and levies could also lead to avoidance by technology that allows buildings
ments. As this option is the assessed on all homeowners homeowners, who may simply to float above water during a
closest to the current state of or municipal ratepayers and choose not to purchase insurance flood, there is no doubt that
affairs, the private insurance financed by levies or through and risk financial ruin in the event improving infrastructure and
market would continue to government contributions. of a loss. Conversely, placing implementing preventive mea-
provide insurance coverage too much emphasis on the sures will contribute to reducing
in accordance with its risk The governments of other coun- availability of insurance (by the risk and, in so doing, make it
appetite, and government aid tries have already implemented subsidizing premiums, for somewhat more insurable. n
RISQUE D’INONDATION: UNE PRÉOCCUPATION
CROISSANTE, TOUJOURS SANS SOLUTION CLAIRE
par Jocelyn Beaudoin, avocat sénior, Clyde & Co
TEMPÊTES, PANNES DE COURANT, été inondés et un nombre encore la rivière Rouge au Manitoba est financières d’environ 6 milliards
glissements de terrain, fermetures plus important de citoyens en ont réputée pour être particulière- de dollars, ainsi que l’évacuation
de routes : c’est en raison de ce été touchés. ment sujette à la vulnérabilité de près de 80 000 personnes.
bilan que les inondations de l’an- Des inondations d’inten- situationnelle. Enregistrée en Lorsqu’elles sont majeures et
née dernière au Québec ont été sités variables se produisent 1997, sa plus grave inondation causent l’évacuation forcée de
désignées comme étant « l’événe- chaque année au Canada. a endommagé environ 1 000 résidents, le fardeau économique
ment climatique de 2019 ». En Historiquement, le pays a été propriétés. De même, l’inondation qu’elles représentent peut mettre
effet, des dizaines de milliers de vulnérable aux inondations dans de 2013 en Alberta a entraîné des en péril la situation financière
résidences et de commerces ont diverses provinces. La vallée de dommages matériels et des pertes continued on page 4
Con f e r e nc e • E du c a t ion • R e pr e s e nt a t io n FA L L 2 0 2 0 / 3
R IMS CA N A D A .C A
RISQUE D’INONDATION généralement de franchises juillet 2013, les locaux apparte- la couverture. Deuxièmement, le
continued from page 3 élevées jumelées à des limites de nant au Treport Wedding & juge a conclu que l’incident n’avait
couverture peu élevées. Même Convention Centre Ltd. ont été pas été causé par une « inonda-
des entreprises et des citoyens si une offre de couverture existe inondés. L’eau s’est infiltrée dans tion » au sens de l’avenant. Par
affectés. pour certaines propriétés, celles le bâtiment par les portes, les conséquent, la Cour supérieure de
Comment peut-on se prémunir qui sont situées dans les zones à drains de sol et les plafonds, et justice de l’Ontario a statué que
contre de tels risques? D’abord, haut risque d’inondations ne sont a causé d’importants dommages l’assuré n’avait pas droit à une
il faut savoir que la plupart des presque jamais couvertes. aux locaux. Une réclamation a été couverture en vertu de l’avenant
polices d’assurance résidentielle Une idée fausse courante est présentée à Co-operators, une relatif aux inondations.
de base ne couvrent pas les dom- que les résidents des zones à société d’assurances générales La Cour d’appel a revu en
mages résultant des inondations haut risque ont les moyens de en vertu de la police d’assurance détail le libellé de la police afin
provoquées par le débordement payer des primes d’assurance « tous risques » (la « police »). de déterminer si l’incident
d’un cours d’eau. Cette absence plus élevées. Cependant, Craig Il y a eu un litige pour savoir si constituait une « inondation »
de couverture s’explique du fait Stewart, vice-président des l’avenant de la police portant sur au sens de la police.
que les zones inondables sont affaires fédérales du Bureau les inondations s’appliquait à la La Cour d’appel a conclu que
clairement identifiées et que d’assurance du Canada (BAC), a réclamation. le juge de première instance avait
la crue des eaux y constitue un abordé les preuves limitées de ces
phénomène naturel prévisible réclamations, suggérant l’absence
alors que le principe de base en de corrélation entre les activités
assurance est de couvrir les situa- à haut risque et le revenu. Un
tions « imprévisibles ». modèle d’inondation mis au point
Pourtant, depuis plusieurs par le BAC a déterminé qu’environ
années, certains aménagements 1,8 million de ménages canadiens
du territoire créent des zones sont considérés comme étant à
vulnérables et engendrent l’insuff- très haut risque d’inondation.
isance des infrastructures d’évac- En règle générale, les polices
uation. En Ontario, par exemple, relatives aux inondations sont
l’évolution de la gravité des soumises à une limite. Cependant,
précipitations allant d’un extrême plusieurs assureurs ont mis en
à l’autre a soulevé des inquiétudes place des avenants supplémen-
quant à l’instabilité climatique et taires contre les inondations pour
à la probabilité accrue d’inonda- étendre la couverture des assurés.
tions. Avec l’impact des change- Bien que ces avenants aident à
ments climatiques, les dommages rationaliser le processus de récla-
causés par l’eau continueront mation, le langage utilisé pour La Cour supérieure de commis une erreur en important
vraisemblablement d’augmenter définir le terme « inondation » a justice de l’Ontario a statué que l’exclusion sur les inondations
en fréquence et en importance. contribué à des litiges concernant l’avenant sur les inondations causées par des « eaux de surface
l’application. ne s’appliquait pas pour deux » dans l’avenant pour deux
RÉPONSE DES ASSUREURS raisons. Premièrement, le juge raisons. Premièrement, la Cour
Considérant la multiplication L’INTERPRÉTATION de première instance a conclu d’appel a statué qu’un avenant
des réclamations à ce titre, DES TRIBUNAUX que les dommages aux biens de ne fonctionne pas indépendam-
certains assureurs ont développé Un récent jugement en Ontario, l’assuré étaient causés par « l’eau ment de la police, car il n’existe
SHUTTERSTOCK/ EPPIC ADVENTURES
des produits pour répondre aux Treport Wedding & Convention de surface », qui était définie pas sans elle; ils doivent être lus
demandes des consommateurs Centre Ltd. c. Co-operators dans la police comme « de l’eau ensemble. Deuxièmement, donner
cherchant une couverture d’assur- General Insurance Company, ou des précipitations naturelles effet à la définition d’« eaux de
ance particulière aux inondations. 2020 ONCA 487, traitait de ruisselant temporairement sur la surface » lors de l’interprétation
Ces couvertures se font néan- ce sujet. À la suite d’un orage surface du sol ». Par conséquent, de l’avenant relatif aux inon-
moins plutôt rares et, si elles historique s’étant déversé sur l’exclusion « eaux de surface » de dations annulerait ou rendrait
sont offertes, s’accompagnent la région du Grand Toronto le 8 la police avait pour effet d’exclure effectivement inopérante la
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R IMS CA N A D A .C A couverture prévue. En effet, la locaux endommagés entouraient continuent d’être une préoccupa- par une combinaison des couverture contre les inondations un « plan d’eau. » tion partout au pays. Le gouver- propriétaires-occupants et serait annulée dans presque tous nement fédéral s’est récemment des gouvernements. Cette les cas, car la plupart des bâti- SOLUTIONS DE RECHANGE penché sur la création d’un option étant plus près de ments sont situés à une certaine À L’ASSURANCE programme national d’assurance l’état actuel des choses, distance de l’eau. Par conséquent, TRADITIONNELLE inondation à faible coût afin de le marché privé continuer- l’avenant relatif aux inondations En plus de l’assurance, il existe protéger les propriétaires de ait d’offrir une couverture doit être lu sans donner effet à d’autres possibilités pour recevoir maisons à haut risque d’inonda- d’assurance en fonction de l’exclusion des eaux de surface. une indemnisation pour les pertes tion qui ne bénéficient pas d’une sa tolérance au risque et une En outre, la Cour d’appel a subies en raison d’une inondation. protection d’assurance adéquate. aide gouvernementale serait conclu que l’incident était une « Cependant, il est important de Interrogée sur les développements offerte dans les cas où les inondation » au sens de l’avenant noter que ces options de rechange du programme, Sécurité publique primes seraient trop élevées. relatif aux inondations. Le sens sont également soumises à des Canada n’a pas offert de réponse L’exposition du gouvernement ordinaire du mot « inondation » limitations. Au Québec, par directe, exprimant simplement « pourrait aussi être diminuée comprenait « l’écoulement massif, exemple, les citoyens peuvent une pleine considération » pour en transférant une partie du puissant et rapide de l’eau » dans avoir accès au Programme général les recommandations proposées risque au marché mondial de la propriété. De plus, cet avenant d’indemnisation et d’aide par le BAC dans son rapport pub- la réassurance. n’exigeait pas que le plan d’eau financière du ministère de la lié en juin 2019, intitulé Options ● Option III: Créer un pool d’as- soit présent en permanence. En Sécurité publique. Adopté par de gestion des coûts de propriétés surance en fonction des ris- d’autres termes, un ruisseau ou un décret le 10 avril 2019, ce résidentielles les plus à risque ques élevés d’inondations. Un fossé de drainage constituent un programme vise notamment à d’inondation au Canada. groupe de propriétés à risque « plan d’eau » même s’ils peuvent compenser les frais supplémen- Au terme d’un examen d’initia- élevé d’inondation serait dis- avoir été secs pendant plusieurs taires pour se loger et se nourrir tives prises à l’échelle interna- tingué de ce qui est considéré heures avant un débordement. pendant l’évacuation, à réparer tionale, la BAC a étudié trois comme un risque normale- Enfin, la Cour d’appel a réitéré ou remplacer les biens meubles schémas potentiels qui pourraient ment assurable. Le groupe que les dispositions accordant une essentiels qui ont été endom- être mis en place: serait géré par un partenariat couverture, comme l’avenant relatif magés et à réparer les dommages public-privé, administré par aux inondations, doivent être inter- à la résidence principale. ● Option I: Une solution de l’industrie de l’assurance, prétées au sens large. Sinon, son Maintenant plus restrictif marché à l’état pur où les mais régi et garanti par le interprétation annulerait la couver- qu’auparavant, le programme propriétés privées ne seraient marché de la réassurance ture des « risques évidents » qui y comporte plusieurs limites plus admissibles à l’aide gouvernemental/mondial. sont identifiés et irait à l’encontre aux montants qui peuvent financière gouvernementale La formation de ce pool des attentes légitimes de l’assuré être octroyés. et où le risque serait assumé nécessiterait une précapital- quant à la couverture achetée. En Malgré tout, lorsque se produis- par les propriétaires-occu- isation pour sa mise en place conséquence, l’avenant relatif aux ent des inondations de l’ampleur pants. Ceux-ci devraient ainsi qu’une capitalisation inondations s’appliquait à la perte de celles qui ont frappé le Québec par conséquent déménager, permanente qui serait d’une subie par l’assuré et causée au printemps 2019, ce sont par s’autoassurer ou transférer part assurée par des primes par l’inondation. milliers que les citoyens se tour- leur responsabilité civile éven- versées et des redevances Cependant, la couverture nent vers leur gouvernement pour tuelle en cas d’inondation au prélevées auprès de tous les n’a pas toujours été accordée obtenir du soutien, lequel fait alors marché privé de l’assurance. propriétaires-occupants ou de en faveur des assurés. Dans un face à un fardeau économique Les primes étant fondées contribuables municipaux et jugement antérieur, Parker Pad très important. Il existe donc sur le risque, une partie des d’autre part financée à l’aide & Printing Ltd. v. Gore Mutual également des Accords d’aide propriétaires à risques élevés de redevances ou de cotisa- Insurance Company, 2017 ONSC financière en cas de catastrophes se retireraient du marché et tions du gouvernement. 3894, la Cour a rejeté la demande (AAFCC) du fédéral, gérés par le gouvernement pourrait de couverture du demandeur Sécurité publique Canada, pour investir davantage dans des Les gouvernements d’autres en vertu de son avenant relatif indemniser les sinistrés et financer infrastructures de protection. pays ont déjà mis en place des aux inondations, invoquant le le rétablissement. ● Option II: Un statu quo adapté mesures similaires pour faire face manque de preuve que les Les enjeux liés aux inondations où le risque serait assumé continued on page 6 Con f e r e nc e • E du c a t ion • R e pr e s e nt a t io n FA L L 2 0 2 0 / 5
R IMS CA N A D A .C A
RISQUE D’INONDATION de gestion saine des plaines l’assurance (en subventionnant plutôt que correctives. Qu’il
continued from page 5 inondables. Dans certains cas, les primes, par exemple), il y a s’agisse d’élever des équipements
les primes du NFIP peuvent être une possibilité que le taux de critiques (chauffage, ventilation,
au problème d’assurabilité des subventionnées. prime payé ne reflète pas le risque transformateurs électriques,
risques liés aux inondations. Au Un retrait complet de l’aide réel de perte et que les fonds systèmes de communication,
Royaume-Uni, on a lancé Flood gouvernementale permettrait d’un disponibles en cas de sinistres etc.) au-dessus des niveaux
Re, un réassureur subventionné côté au gouvernement de mettre s’avèrent insuffisants. d’inondation prévus dans les
par une taxe imposée à tous les l’accent sur l’atténuation plutôt En bref, quel que soit l’angle immeubles commerciaux ou
transporteurs qui souscrivent des que la gestion de catastrophes, par lequel on aborde le problème, même d’utiliser une technologie
assurances habitation. Aux États- domaine dans lequel les assureurs l’attribution des coûts entre le permettant à un bâtiment de
Unis, le National Flood Insurance sont généralement plus efficaces, citoyen, son assureur et les deux rester au-dessus du niveau de
Program (NFIP) a été créé en mais pourrait d’un autre côté paliers de gouvernements après l’eau pendant une inondation,
1968. Pour bénéficier d’une mener à de l’évitement de la part une inondation représente un véri- il ne fait pas de doute qu’en
assurance inondation dans le des propriétaires, ne souscrivant table casse-tête. C’est d’ailleurs améliorant les infrastructures et
cadre du NFIP, une propriété doit tout simplement plus à une assur- l’une des raisons pour lesquelles qu’en employant des mesures
se trouver dans une communauté ance et risquant la ruine financière chacun de ces acteurs doit investir préventives, on contribue à réduire
qui a adhéré au programme et qui en cas de sinistre. À l’inverse, en plus d’efforts dans la mise en le risque et à le rendre du même
accepte d’appliquer des normes insistant trop sur l’accessibilité de place de mesures préventives, fait un peu plus assurable. n
2019 RIMS CANADA WELCOME RECEPTION
NAMED FINALIST FOR EVENT AWARD
RIMSFest, the Welcome Reception for the
2019 RIMS Canada Conference, has been
nominated as a finalist for an International
Live Event Association Espirit Award. The
globally recognized awards honour the
best, most creative and innovative contri-
butions to the event planning industry.
Inspired by the conference theme
TRANSFORM and Edmonton’s reputation
for being Canada's festival city, RIMSFest
kicked off the 2019 RIMS Canada
Conference and brought together nearly 1,000 risk management innovators and practitioners to cele-
brate and connect in a digital arts and entertainment environment for a transformative event experience.
RIMSFest is one of nine nominees in the non-profit organization category along with events hosted in
Seattle, Los Angeles, Columbus, Charleston, Houston, Cleveland, Toronto and Fort McMurray. The event
planner, Site6 Entertainment, nominated RIMSFest for the honor.
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R IMS CA N A D A .C A ARE ADULT HOSTS RESPONSIBLE FOR THE SAFETY OF UNDERAGE PARTY GUESTS? by Janet C. Kwong, associate, Alexander Holburn Beaudin + Lang LLP I n McCormick v. Plambeck, 2020 Mr. McCormick and Mr. Plambeck both leave the party on foot, steal a car and drive it BCSC 881, the British Columbia sustained serious injuries; Mr. Plambeck’s unsafely. The court held that no duty arose on Supreme Court examined the issue of injuries proved fatal. the facts of this case. whether adults who host minors at their Mr. McCormick sued various parties seeking The court was not persuaded that the home, knowing they will be consuming damages for personal injury. In his claim plaintiff was intoxicated when he left the party. alcohol and/or drugs, owe a duty of care against the Pearsons, he alleged that as adult Nevertheless, the risk of injury to Mr. McCormick as a social host to those underage guests. social hosts, the Pearsons owed him, a minor, was possible, but not foreseeable. The Pearsons Mr. McCormick was a 17-year-old guest at a a duty of care and that they breached that reasonably assumed he was walking home party hosted by the teenage daughter of Stephen duty by allowing him to become intoxicated on from the party, which was a historical custom and Lidia Pearson at their Salt Spring Island their property and then failing to stop him from for many underage guests at these types of home. It was a general custom for parents on leaving in that state. The Pearsons denied that parties on Salt Spring Island. The stolen vehicle Salt Spring Island to host teenagers and allow they owed Mr. McCormick a duty of care, in had been unlocked with the keys inside. The them to drink alcohol and use marijuana, as the circumstances, and further that the motor evidence was this was common practice on Salt this reasonably controlled environment was vehicle accident, and the Plaintiff’s subse- Spring Island. This practice, the court found, preferable to the teens holding an unsupervised quent injuries, were caused by Mr. Plambeck’s indicated that vehicle theft was highly unlikely, gathering in the woods. negligent operation of the vehicle and not by and thus the risk of theft too remote to create a The Pearsons agreed to host the party anything they did or failed to do. duty on the Pearsons to anticipate that a guest on certain conditions: There was to be no This case required the court to revisit tort would steal a vehicle upon leaving their home. drinking and driving; car keys would be principles as they pertain to social host liability, The court went on to find the Pearsons collected from guests who drove to the party; including Childs v. Desormeaux, 2006 SCC 18, took all reasonable steps to minimize the risk Mr. and Ms. Pearson would circulate through- wherein the Supreme Court of Canada rejected of harm to their guests. The evidence was that out the party; and the party would end at 1:00 the argument that a social host owes a general the Pearsons followed through on the rules they a.m. Guests were expected to walk home, call duty to users of public highways injured by adult had established: car keys were collected; their parents for rides, or get a ride from either party guests. In Childs, The Supreme Court Mr. and Ms. Pearson were present over the Mr. or Ms. Pearson. determined injury to a plaintiff by a defendant course of the night; and at around 1:00 a.m., Mr. McCormick had been invited to the driver who was coming from a party where he the music was turned off and the lights were party through a Facebook event in which the had consumed alcohol was not reasonably turned on. Some guests were picked up, some Pearson’s daughter linked a video produced foreseeable by the hosts of said party. left on foot, and Ms. Pearson drove some guests by an anti-drinking and driving campaign and Foreseeability was also determinative in this home. There was no evidence that other guests asked those invited not to drive under the case. Mr. McCormick contended that: drove while impaired or rode with a driver who influence. He and a few friends walked to the had been drinking. party at approximately 10 p.m. and drank the proper question to be asked here is While hosting a party where alcohol is beer and smoked marijuana on the way. They whether the type of harm suffered; personal consumed by minors is a breach of the Liquor brought their own alcohol to the house, and Mr. injury, was reasonably foreseeable to someone Control and Licensing Act, R.S.B.C. 1996 c. McCormick’s evidence was that he drank fewer in the position of the Pearsons when consider- 267, that fact alone did not demand a higher than six beers at the party. ing the safety of minors who have consumed standard of care. The court took judicial notice Mr. McCormick left the party on foot with alcohol and/or smoked marijuana, leaving of the fact that graduation parties are an his friend Ryan Plambeck. But soon after, he their home at approximately 1:00 a.m. into established custom in British Columbia, not- found himself in the back seat of a vehicle the unlit, rural roads of Salt Spring Island. withstanding that they constitute, when minors Mr. Plambeck had stolen from the Pearsons’ are involved, a breach of the law. The standard neighbour. Mr. Plambeck, who did not have However, the Chief Justice determined that remains one of reasonableness; not perfection. a driver’s license, caused the car to leave the the real question was whether a duty extends to The court therefore dismissed the plaintiff’s paved roadway travelling in excess of 70 km/hr. foreseeing that one or more party guests would continued on page 9 Con f e r e nc e • E du c a t ion • R e pr e s e nt a t io n FA L L 2 0 2 0 / 7
R IMS CA N A D A .C A
ORIMS HOSTS VIRTUAL CONFERENCE
The Ontario chapter of RIMS (ORIMS) hosted a
virtual country-wide p
rofessional development
seminar jointly with Sedgwick and with the Betty Clarke Honored with
support of RIMS Canada on October 6, 2020. 2020 Donald M. Stuart Award
It consisted of three informative segments: The RIMS Ontario Chapter (ORIMS)
• HOW ARE THEY DOING? A peak into the insurance announced that Elizabeth “Betty” Clarke,
market in 2021 and beyond; manager of corporate risk and recovery
• HOW ARE WE DOING? What service providers are doing for the City of St., John’s, Newfoundland,
to meet the challenges under COVID-19 restrictions was chosen as 2020 the Donald M. Stuart
• HOW ARE YOU DOING? Well-being and coping strategies during Award winner. The Donald M. Stuart Award
the COVID-19 pandemic is widely recognized as Canada’s highest
The date was specifically selected in recognition of the annual RIMS honour within the risk management field.
Canada Conference, Vision Ottawa which was postponed this year due to the Since 1979, the annual award has celebrated Canadians who have
pandemic and is now set to take place on October 4-7, 2021. The sessions made outstanding contributions to the risk management profession.
featured speakers from the insurance industry and a variety of service Please join us in congratulating Betty for her leadership, involve-
partners, along with the help of senior risk managers acting as moderators. ment and support of the RIMS community in both Newfoundland and
ORIMS is tremendously grateful for the spectacular talent, knowledge and throughout Canada. We look foreward to celebrating with her in person at
support provided by all the event participants. the 2021 RIMS Canada Conference in Ottawa.
The first session made clear that the market factors challenging us today
are expected to continue into 2021 and perhaps beyond. Extended periods
of under-pricing risks, low interest rates, catastrophic losses, and the impact
of uncertainty on risk appetite and corporate liquidity will continue to affect
both the insurance and reinsurance markets and their subsequent risk
pricing. It was also noted that the World Economic Forum’s risk register was
dominated by risks relating to sustainability and climate change.
Session two centered around the measures service providers are
implementing in order to continue to support their clients in the face of
the pandemic, including work-from-home capabilities and new technology
RCC Welcomes The RIMS Canada Council is pleased to
employed to manage remote inspections. We were told how COVID-19 has
changed litigation and impacted indemnity payments and claims expenses.
New Members welcome two new board members:
We learned about the new demand for disinfecting services and help in Sarah Morris is the manager of commercial underwriting at Insurance
adapting workplace design, while applying stringent procedures to protect Corporation of British Columbia and actively participates in
employees who are executing these services. RIMS as the B.C. Chapter Vice President. Originally from Halifax,
Our third and final session of the day allowed us to consider the many Nova Scotia, Sarah is a maritimer at heart and has called Vancouver, B.C.
stories of resilience that have emerged throughout the pandemic. Positivity, home for the last 12 years. She has held a variety of positions in
empathy and staying connected were consistent themes and messages. the insurance and risk management sectors, including municipal
There were, however, some distressing statistics around mental illness risk management and property casualty underwriting management.
and addiction; isolation, relationship challenges; balancing home and work As an active member of the B.C. Chapter for the last 10 years,
responsibilities, and the financial stresses that are taking their toll on many Sarah is looking forward to participating on RIMS Canada Council
families. Going forward, we will need an organized plan that contemplates this term.
human behavioural factors at the centre of any cohesive and coordinated
response. Empathy and collaborative support are important in understand- Suzann Lewis is the manager of insurance at Pembina Pipeline
ing that everyone’s solution will be different. Corporation where she is responsible for the placement of the
Overall, the day was a tremendous success thanks to the pooling of corporate insurance program and claims management. She started
efforts from our guest speakers, moderators and volunteers who gave the her insurance career in Manitoba in 2001 before moving to Calgary,
attendees much to consider. If you missed it and would like to catch the Alberta in 2005 and enjoyed the opportunity to work as a broker
replay, you can find the recorded link on the ORIMS website at before moving into the area of risk management in 2013. Suzann is the
https://www.ontariorims.org/2020-orims-virtual-conference/. current president of the RIMS Southern Alberta Chapter (SARIMS) and
has been a member of the chapter since 2017.
8 / FA L L 2 0 2 0 Con f e r e nc e • E du c a t ion • R e pr e s e nt a t io nR IMS CA N A D A .C A
MOT DE LA PRÉSIDENTE
Ç a y’est, j'ai finalement
atteint ma limite avec
la pandémie COVID-19!
travail consiste non seulement à
contribuer à l'identification et au
traitement des risques, mais aussi
mini-conférence à laquelle
ont participé plus de 200
personnes et NARIMS
La dernière fois où je vous à faire en sorte que l'organisation offrira une session éduca-
écrivais, des confinements pour laquelle nous travaillons tive en octobre à tous nos
commençaient à être imposés puisse se remettre rapidement et collègues canadiens.
et maintenant, nous reculons. avec succès des perturbations. Pour moi, c'est aussi ça
Rien n'a été normal depuis 7 J’imagine que vous vous RIMS Canada: soutenir des Ce sont deux personnes
mois et nous nous demandons demandez où je m’en vais occasions d'échanges et offrir formidables et nous leur sommes
maintenant quelle sera la avec ça… des avenues pour c oordonner reconnaissants pour leur dévoue-
nouvelle normalité et quand Eh bien voici. Comme le RIMS des activités. ment; leur personnalité et leur
un retour sera possible. Canada Council est un comité Sur une note différente, sagesse nous manqueront.
Plus que jamais, nous regroupant des gestionnaires permettez-moi de souhaiter la Le comité de nomination et de
devons être résilients—et je de risques de chacun de nos bienvenue à 2 nouvelles représen- gouvernance de RIMS a mainte-
sais que je devrai l’être avec les chapitres canadiens, nous nous tantes au sein de notre équipe: nant la chance de pouvoir compter
jours plus froids qui approchent efforçons de supporter tous Curtis comme membre.
à grands pas. les chapitres afin qu’ils résistent ● Sarah Morris, directrice de Une dernière chose avant
La gestion des risques aux perturbations et continuent la souscription commerciale de vous laisser; au moment où
n’est-elle pas aussi une question de vous offrir les services que à Insurance Corporation of j'écris ces quelques lignes, nous
de résilience? Fait intéressant, vous recherchez localement pour British Columbia et représen- «célébrons» notre Action de Grâce
l'Université du Québec à Montréal poursuivre votre développement tante de BCRIMA et certains peuvent se demander
offre un nouveau diplôme d'études ou maintenir vos acquis en tant ● Suzann Lewis, superviseur à quoi rendre grâce en 2020?
supérieures en Résilience, que professionnels de la gestion des assurances chez Pembina Eh bien moi, je suis reconnaissante
Risques et Catastrophes—si des risques. La résilience est Pipeline Corporation et actu- pour une bonne santé, des liens
seulement j'avais le temps! un concept bien intégré par nos elle présidente du chapitre familiaux solides, mes amitiés
La gestion des risques consiste chapitres qui demeurent résil- SARIMS. (et un animal aimant), mon travail,
à gérer ce qui pourrait interférer ients à travers cette pandémie un endroit où vivre, et enfin, pour
avec les objectifs et la mission et continuent de vous proposer Malheureusement, leur arrivée mon rôle de présidente du RCC qui
d'une organisation, tandis que des activités éducatives, quoique signifie également qu'il faut dire me permet d’échanger avec vous.
la résilience est la capacité d'une virtuellement pour le moment. au revoir à leurs prédécesseurs: J'espère que vous avez de
organisation à résister aux Et la beauté de cette «virtualité» nombreuses raisons d'être recon-
perturbations et à rester fonction- est que nous pouvons béné- ● Jennifer Clarke qui représentait naissants. Profitez de l'automne,
nelle. C'est assez évident que l'un ficier des événements offerts BCRIMA depuis 2017 restez en bonne santé, prenez
ne va pas sans l'autre. En tant que par nos collègues. Tout réce- ● Curtis Desiatnyk qui représentait soin de vos proches et demeurez
gestionnaires de risques, notre mment, ORIMS a organisé une SARIMS depuis 2015 résilients! n
ARE ADULT HOSTS RESPONSIBLE FOR THE automatically exposing themselves to legal enhancement of risk. The finding made by the
SAFETY OF UNDERAGE PARTY GUESTS? liability because the guests have had alcohol courts in Childs and in McCormick was that
continued from page 7
or marijuana at the premises. However, as the injury was not reasonably foreseeable on
claim finding that he had failed to establish the always, this decision turns on its facts. It may the facts established in those cases. It remains
existence of a duty of care between the Pearsons be recalled that in Childs, the Supreme Court to be seen how the court will apply the law to
and himself and that, even if a duty of care had of Canada left open at least the possibility of younger teenagers, rather than the 17- year-
existed, the Pearsons met the standard of care. a different verdict had there been evidence old Mr. McCormick, where a young person
Parents may take some comfort in knowing that the host knew of the guest’s intoxication, consumes drugs or alcohol supplied at the
that if they take reasonable steps to protect was aware that he or she will be driving home adult host’s premises or where a young guest
underage guests from harm, they are not or was otherwise implicated in the creation or leaves a party visibly intoxicated or high. n
Con f e r e nc e • E du c a t ion • R e pr e s e nt a t io n FA L L 2 0 2 0 / 9R IMS CA N A D A .C A
EDITORIAL POLICY
A Message from RCC Chair Ginette Demers The RIMS Canada Newsletter is a publication
of the RIMS Canada Council and is published
periodically throughout the calendar year. The
T
opinions expressed are those of the writers
hat is it, I have finally each of our Canadian chapters, we and volunteer members of the RIMS Canada
Newsletter Editorial Committee. Articles
reached my COVID-19 strive to support all chapters so they
submitted to the RIMS Canada Newsletter for
pandemic limit! Last resist disruptions and can continue publication are subject to the approval of the
I wrote you, lockdowns were to provide you with the services RIMS Canada Newsletter Editorial Committee.
Approval of such articles is based on
starting to be imposed and now, you are locally seeking to keep newsworthiness and perceived benefit to the
we are heading backwards. developing as risk management pro- readership. All decisions of the RIMS Canada
Newsletter Editorial Committee are final and
Nothing has been normal for fessionals. Resilience is a concept not subject to appeal. Individuals submitting
the last seven months and we well integrated by our chapters who articles to the RIMS Canada Newsletter hereby
acknowledge their acceptance of the RIMS
now find ourselves questioning are remaining resilient through this
Canada Newsletter Editorial Policy.
what will be the new normal pandemic and continue to offer you
Editor
and when will going back to it educational activities, albeit virtu- Pascale Samson
PSP Investments
be possible. ally for now. And the beauty of this ● Jennifer Clarke who has
Email: Pascale.Samson@investpsp.ca
More than ever, we need to “virtuality” is that we can actually represented BCRIMA on the Tel: (514) 379-5105
be resilient—and I know I will benefit from our fellow chapter’s RCC since 2017 Thank you to all of our newsletter contribu-
have to with the colder days fast events. Just recently, ORIMS ● Curtis Desiatnyk who tors! If you are interested in writing an article
for the RIMS Canada Newsletter, please
approaching. organized a mini-conference represented SARIMS submit the article to a member of the Editorial
Isn’t risk management all about attended by over 200 participants since 2015 Committee for review. Any questions about the
production or distribution of this newsletter
resilience too? Interestingly, the and NARIMS is offering an educa-
should be directed to the Editorial Committee.
Université du Québec à Montréal tional session in October to all our They are both great people
The RIMS Canada Newsletter is produced
is offering a new graduate Canadian colleagues. To me, this is and we are thankful for their on behalf of the RCC by RIMS.
degree in Resilience, Risks and what RIMS Canada is also about: dedication; we will surely miss
Disasters—if only I had time! supporting those opportunities to them and their wisdom and the
Risk management is about exchange and provide avenues to RIMS Nominating and Governance LIKE, FOLLOW
managing what could interfere coordinate activities. Committee is lucky to count Curtis & SUBSCRIBE!
The RIMS Canada Council is here to serve
with the objectives and mission On a different note, allow me to as a member. our Canadian RIMS chapters and members,
of an organization while resilience welcome two new representatives One last thing before I let you and we invite you to reach out to us as we
are here to assist you.
is the capacity of an organization on our team: go; as I am writing these words,
Visit the RIMS
to resist disruption and remain we are “celebrating ” our Canadian Canada website at
functional. Pretty obvious that one ● Sarah Morris, commercial Thanksgiving and some may won- rimscanada.ca or simply
scan the QR code below
does not go without the other. As underwriting manager at der what should we be thankful for
on your smartphone for
risk managers, our job is to con- Insurance Corporation of in 2020? Well, I am thankful for access to RIMS Canada risk management
resources, including conference and educa-
tribute to not only identifying and British Columbia and good health, strong family bounds,
tion information.
treating exposures, but to ensure representing BCRIMA friendships (and a loving dog), my
Did you know that the RIMS Canada
that the organization we work ● Suzann Lewis, supervisor work, a place to call home, and Newsletter is available on-line? Now you can
for can quickly and successfully insurance at Pembina Pipeline finally, for my role as RCC Chair read your favourite newsletter on the go at:
rimscanada.ca/newsletter
recover from disruptions. Corporation and current Chair allowing me to write to you.
As the world evolves and technology plays
Where am I going with this of the SARIMS Chapter. I hope you have many reasons a more pivotal role in our daily lives, it is
must you think… to be thankful for. Enjoy the fall, important keep informed about topics relating
to risk management and the insurance
Here you go. As the RIMS Sadly, their arrival also remain in good health, take care
industry. Use #RIMSCanada and stay
Canada Council is a committee means we must say goodbye of your loved ones, and above all, connected by following us on social media:
regrouping risk managers from to their predecessors: stay resilient! n
www.linkedin.com/groups/4701774
@RIMSCanada
www.facebook.com/RIMSCanada
www.instagram.com/RIMSCanada
1 0 / FA L L 2 0 2 0 Con f e r e nc e • E du c a t ion • R e pr e s e nt a t io nYou can also read
