BC’s highest court has upheld a lower court order that an insurer must defend a municipality as an additional insured in an underlying bodily injury lawsuit. The claim arose when a man on his way to a dog training class within a District of Saanich community centre gymnasium was struck on the head by a lacrosse ball tossed by a member of a club which had rented space in another part of the same gym.
Under the terms of the facility use agreement, the club caused the municipality to be added as an additional insured under the club’s liability policy underwritten by the insurer. That coverage was restricted “solely with respect to the liability which arises out of the activities of the named insured.” The insurer refused to defend Saanich so the municipality successfully petitioned the BC Supreme Court for an order compelling the insurer to defend. The insurer appealed.
In dismissing the insurer’s appeal, the Court unanimously held that:
… The true nature of the substance of the claim is a claim arising from the lacrosse associations’ activities, in the context of Saanich’s role in facilitating them, whether or not liability attaches to the lacrosse associations. In other words, the pleadings contain allegations of the requisite unbroken chain of causation; there is no independent fault alleged against Saanich which would support an action in negligence absent the activities of the lacrosse associations. Consideration of the “errant” aspect of the lacrosse ball intimately implicates the actions of Saanich.
Neil Carfra , one of the partners with Carfra Lawton LLP, represented the District of Saanich in this matter. Please feel free to contact him if you have coverage or occupier liability concerns.
Read Canadian Underwriter’s article about it here .