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Municipal Liability and Insurance Costs

Resource August 14, 2020

Municipal Implications

Municipal governments cannot afford to be the insurer of last resort. The principle of joint and several liability is costing municipalities and taxpayers dearly, in the form of rising insurance premiums, service reductions, and fewer choices. AMO believes it is unfair to ask property taxpayers to carry the lion’s share of a damage award when a municipality is found at minimal fault, or to assume responsibility for someone else’s mistake.

At the same time, Councils are being forced to redirect property tax dollars to pay rising insurance premiums.

In response to these issues, the provincial government announced a consultation with municipal governments in January 2019. In July 2019, the Attorney General wrote to all Heads of Councils seeking municipal perspectives on joint and several liability, insurance costs, and “liability chill” affecting public services.

AMO awaits the government’s response to the consultation and understands that delays are occurring due to COVID-19. However, the current environment is seeing increased liability concerns emerge as municipal governments work to manage COVID-19 and the phased re-opening across the province.


Liability reform represents a longstanding request of municipal governments. It is important to stress that municipal advocacy on this issue strives to ensure justice to injured parties that is proportionate to responsibility.

In response to the consultation, AMO submitted “Towards a Reasonable Balance – Addressing Growing Municipal Liability and Insurance Costs” in October 2019 that provides a refresh on the municipal argument to find a balance to the issues and challenges presented by joint and several liability. 

Read also the Attorney General's Joint and Several Liability Consultation Letter. July 12, 2019

AMO’s submission makes seven key recommendations that includes the government adopting a model of full proportionate liability to replace joint and several liability and to implement a cap for economic loss awards. The submission broadly illustrates to the government that options exist and to offer the reassurance that they can be successfully implemented as other jurisdictions have done.

For more information, please see The Case for Joint and Several Liability Reform in Ontario (Presented by the AMO Municipal Liability Reform Working Group, April 1, 2010) or view our 2011 Managing the Cost of Risk insurance survey results.

Joint and Several Liability
If other parties are unable to pay, damages can be recovered from any defendant, even if they are deemed just one per cent responsible.

As a result, a fraction of fault can push municipalities to pay huge damage awards. Often they are targeted deliberately as “deep pocket” insurers when other defendants do not have the means to pay.



Craig Reid
Senior Advisor