February 15, 2024
Have you read your commercial general liability policy?
Coverages under these policies vary significantly. Unlike auto policies they are not uniform. Even homeowners policies are usually similar. CGLs vary company by company. Even the same company may issue different policies to cover different risks.
THE ISSUES
The wordings may result in the exclusion of risks that you expect to be covered.
Another issue you may run into is that coverage depends upon how the Statement of Claim reads. Beware that “mixed claims” may not be covered.
THE CASE
Jack-O’s Sorts Bar v. US Liability Insurance Co., is an illustration. It is a fairly typical decision of an Ontario Superior Court judge, except for the “mixed claims” aspect. That portion might well be appealed.
Claims against bars are especially difficult to find coverage for. Most policies exclude intentional or criminal acts such as assault from coverage. Over-serving however should be covered as negligence.
So why was the entire claim denied coverage?
Because the Plaintiff, in the Statement of Claim, intermingled the issues. It was possible to read the claim as describing a single incident or act. That was how the judge read it.
What was different was the policy wording which in part read :
This exclusion applies to all “bodily injury”… sustained by any person, including emotional distress and mental anguish, arising out of, directly or indirectly result from, in consequence of, or in any way involving “assault” or “battery”… arising out of or caused in whole or in part by negligence or other wrongdoing with respect to…
This is a much broader exclusion than the typical CGL, apparently custom designed to limit the insurer’s risk . That in turn leaves more uninsured risk for the insured.
It was the pleading of the actions as continuous which excluded coverage. Probably not the result the bar owner expected when they paid their insurance premium.
The key in the judge’s reasoning is the finding that this wording is clear and not ambiguous. Even if this is so, the over serving would not, in our view, necessarily be linked to the alleged assault.
TAKEAWAYS
As noted above, this decision might not hold up on appeal, but regardless, it raises the questions:
- Do you know what you are covered for?
- Is it what you expected?
- If not, can you find more appropriate coverage at a reasonable cost?
To answer the questions, you start by reading your policy.
If you are still not sure, speak with your broker, or seek legal advice. It is up to you to understand your coverage and decide whether or not it is appropriate for your risks.
WHAT WEILERS LLP CAN DO FOR YOU
Weilers LLP has existed for over 75 years. During that time, we have represented insurers, insureds, and claimants against insureds.
Our counsel, Brian Babcock, has taught insurance law at the Bora Laskin Faculty of Law at Lakehead University.
At one time, the bulk of our insurance-related work was for insurance companies. Now, we mainly advise and act for insureds, but we bring our knowledge of how insurers think and act to our work for you.
We can advise you if you have a question about your policy. If you find yourself in a dispute with your insurer, we can represent you in negotiations or a lawsuit. If you are sued, and your insurer denies coverage, we can act both to defend the claim and, if we agree that it is worthwhile, to seek coverage.
If you need advice about insurance law, Weilers LLP may be the right lawyers for you.