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The Wrecked, Abandoned or Hazardous Vessels Act requires all vessels over 300 GT in Canadian waters and all Canadian vessels over 300 GT to maintain Wreck Removal Insurance, ensuring financial guarantees for wreck removal costs. This insurance allows for direct recovery against the issuer if the vessel owner does not cover the costs.

The Act clarifies that Wreck Removal Insurance is not traditional insurance but a financial guarantee. Under the Wreck Removal Convention, vessel owners can only avoid wreck removal costs under specific defenses.

Insurers may include clauses to recover costs from breaches of contract. The liability under this insurance is limited to amounts established by the Limitation Convention, which for a 300 GT vessel is approximately C$2.8m. The requirement for insurance certification is expected to quadruple the number of certificates issued by Transport Canada, with a fee of C$98 per certificate.