The Court held that the insured’s coverage in a standard automobile insurance policy for loss or damage to the “automobile, including its equipment” did not extend to the insured’s surveillance equipment. The surveillance equipment was not integral to the automobile’s use as a mode of transportation.

I.C.U. Investigation Inc. v. Royal & SunAlliance Insurance Co. of Canada, [2005] N.B.J. No. 490, New Brunswick Court of Queen’s Bench

The insured was a company which carried on the business of surveillance and private investigations. The insured had a standard automobile insurance policy with the insurer which contained the following terms: “The insurer agrees to indemnify the insured against direct and accidental loss or damage to the automobile, including its equipment”. The sole issue to be resolved was whether the surveillance equipment contained in the van for the insured’s business was covered under the policy.

The Court noted that “its equipment” was a composite term which must be considered in its immediate context. The Court held that “its equipment” and/or “an automobile’s equipment” includes only equipment that is integral to the automobile’s use as a mode of transportation or which is permanently affixed, designed and manufactured specifically for the automobile which enables it to perform a function in addition to the automobile’s use as a mode of transportation. In the result, the insured was awarded damages only for the loss of the van and not for the loss of the surveillance equipment.

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