A shopping centre owner may be entitled to a defence from their insurer for injuries caused by their tenant

Manulife, owner of a shopping centre, was a third party in this action. It sought a declaration that the third party Sovereign General Insurance owed a duty to defend in an action commenced against it. Sovereign argued that it did not owe a duty to defend based on Manulife’s position as an occupier, pursuant to the Occupiers Liability Act.

Liu (Litigation Guardian of) v. Chu, [2009] B.C.J. no. 1138, June 8, 2009, British Columbia Supreme Court, L.D. Russell J.

Manulife owns Metrotown Centre in Burnaby, B.C. and the Defendant Maxime’s Bakery was a tenant there. Maxime’s insurance policy through Sovereign named Manulife as an additional insured under the policy.

One of Maxime’s employees was delivering goods in a cart, and struck the Plaintiff Liu, causing a number of injuries. The Plaintiff commenced an action against the employee, Maxime’s and Manulife. The issue  in this application was whether the claims as alleged in the pleadings fell within the scope of Manulife’s coverage outlined in the policy. Did the event arise from legal operations performed by or on behalf of the named Insured, requiring Sovereign to defend Manulife, or did the event occur due to the statutory breaches of Manulife as an occupier under the Act?

Liu alleged that the Defendants did not take all reasonable steps to ensure the premises were reasonably safe for the operation of the cart. The delivery of goods undertaken by the employee fell within the scope of the policy. That act comprised part of the legal operations of Maxime’s and any claims arising from these actions permit Manulife to rely on the additional Insured clause in the policy. The Plaintiff’s injuries arose out of the delivery of goods, and not through an independent obligation of Manulife as an occupier. The collision was clearly connected to the operation that Sovereign agreed to insure.

In the result, the Court determined that Sovereign owed Manulife a duty to defend the action.

This case was originally summarized by Neil J. MacDonald and originally edited by David W. Pilley.

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