Negligent failure to prevent bullying excluded from coverage
In Unifund Assurance Company v. D.E. et al, 2015 ONCA 423, the insurer successfully appealed after it was ordered to defend and indemnify the parents of a girl accused of bullying. The parents had been sued in negligence for failing to prevent the bullying. Their homeowner policy insurer refused to defend or indemnify, relying on two policy exclusions: one for intentional acts and the other for failing to prevent abuse or harassment.
The lower court had held that the first exclusion did not apply because the claim against the parents was properly pled in negligence and was not merely derivative of the girl’s intentional act. The second exclusion also did not apply because it was “ambiguous” in that it did not expressly state whether the “failure” to prevent abuse included negligent acts as opposed to intentional ones. The “ambiguous” exclusion was interpreted in favour of the insured and the insurer was ordered to defend and indemnify the parents.
The appellate court agreed that the first exclusion did not apply; but disagreed that the second exclusion was ambiguous. The second exclusion applied to claims arising from the “failure of any person… to take steps to prevent… physical, psychological or emotional abuse… or harassment…” The appellate court noted the Oxford Dictionary definition of “negligence” as a “failure to take proper care over something.” It also noted that the claims as pled against the parents were squarely within that definition of negligence. As a result, the unanimous appellate court held that the second exclusion applied, and consequently the insurer did not have a duty to defend or indemnify the bullying girl’s parents.
Case law summary by: Tim Wedge