Insurance clause wording, schedules cover each location separately: Ontario Court of Appeal

Insurance company argued limit was for all seven business locations combined

Insurance clause wording, schedules cover each location separately: Ontario Court of Appeal

The Ontario Court of Appeal has upheld an application judge’s interpretation of a special endorsement in a corporation’s insurance policy that the maximum limit of liability covered each of the seven businesses separately rather than as a whole.

In 202135 Ontario Inc. v. Northbridge General Insurance Corporation, 2022 ONCA 304, 202135 Ontario Inc. (202) operated seven daycare centres insured through a policy issued by Northbridge General Insurance Corporation (Northbridge). The policy included a special endorsement to cover business losses arising from the pandemic. Since all the centres closed in 2020, 202 made a claim under this provision.

Both parties agree that the limit of liability was $50,000, but disagreed on the coverage. 202 alleged that it covered each location for a total exposure of $350,000, while Northbridge argued that the $50,000 was in aggregate for all locations. The application judge found that while the provisions were ambiguous, a reading of the contract as a whole led to a conclusion that the coverage applied to each location separately.

Northbridge appealed, alleging that that the judge erred in ruling that the interpretation of the limit of liability clause was ambiguous.

While the appellate court agreed that the clause was unambiguous, it nevertheless concluded that the coverage applied to each location separately.

The provision’s use of the words “or as otherwise indicated on the schedule” in relation to maximum coverage and the fact that there were seven separate schedules – one for each location – in the policy indicated that the clause contemplated an individual maximum coverage per location, said the court.

Further, the appellate court found that the policy also included an Automatic Blanket Limit Clause, which applied to “each ‘scheduled risk location.’” This supported the interpretation that the policy insured the risk locations as separate businesses, said the court.

Recent articles & video

Court of Appeal ruling helpful for future applications for bail pending appeal, says lawyer

Changes to Trademark Act will ease disputes on ‘official mark’ status: Smart & Biggar lawyer

Recent decision reaffirms scope of settlement privilege

Bennett Jones, Polley Faith continue with 233-million-dollar commercial case

FCA upholds validity of provisions implementing Foreign Account Tax Compliance Act in Canada

New court dates set for inquest, trials in Ontario construction deaths

Most Read Articles

Proposed law creating new Canada disability benefit presented for second reading

How Awanish Sinha and his public sector group at McCarthy Tétrault embrace uncertainty

Employers must be careful when it comes to electronic monitoring of workers: Roper Greyell lawyer

Ont.'s top court affirms COVID-19 pandemic will impact reasonable notice periods for terminations