B.C. caps vicarious liability for vehicle rental companies

The B.C. government has capped at $1 million the vicarious liability car rental companies–and by extension, their insurers–face for accidents and damages caused by customers who rent vehicles.

“Currently, car rental companies face unlimited liability for accidents and damages caused by their customers,” the B.C.’s attorney general said in a press release. “Changes will limit companies’ liability to $1 million for bodily injury and property damage claims and shift some responsibility to the driver.”

British Columbia’s attorney general says the move, which was one of many recent amendments to the Motor Vehicle and Insurance (Vehicle) Act portion of Bill 35, will serve to bring B.C. up to speed with other North American jurisdictions with regard to vicarious liability. In addition, the changes will help business in B.C., such as the car rental industry, to support tourism, the ministry says.

The Trial Lawyers Association of British Columbia (TLABC), on the other hand, said the new legislation will be bad for any B.C. motorist who is involved in an accident while driving a leased or rented vehicle.

“The changes mean the most seriously of injured accident victims would be without sufficient insurance coverage,” Rose Keith, TLABC president, said in a release. “At the same time, the legislation unjustly benefits the automotive industry and financing companies by unfairly limiting the liability of lessors.”

The bill protects the lessor, leaving the lessee exposed in the event of an accident, the TLABC said.

The amendments passed first reading on Apr. 2 and second reading on May 14. It is expected that the law will be passed before the legislative session ends on May 31.

The IBC was unavailable for comment.