Insurance law – Liability insurance – Commercial general liability insurance – Interpretation of policy – Duty to defend – Additional named insured
Carneiro v. Durham (Regional Municipality),  O.J. No. 1842, 2015 ONSC 2427, Ontario Superior Court of Justice, April 15, 2015, G.D. Lemon J.
The applicant municipality sought an order that its snow removal contractor’s insurer defend the municipality with respect to all claims made against it by the plaintiffs. The plaintiffs brought an action against the municipality and contractor for damages arising out of a car accident. The action alleged that the road was improperly maintained as well as negligently designed and built.
The municipality contracted out the plowing, sanding, and salting of the road to the contractor. That contract also required the contractor to obtain liability insurance “in respect of all operations performed by or on behalf of” the municipality. The contract expressly excluded the contractor from an obligation to indemnify the municipality for the negligence of the municipality or municipal employees. The contractor obtained a policy of insurance naming the municipality as an additional insured. The policy limited coverage to the municipality to any liability caused by the contractor’s acts or omissions or that arising from the contractor’s operations or work performed pursuant to the contract.
The court dismissed the applicant’s motion on the basis that the plaintiffs’ claims went beyond what was covered by the contractor’s insurance policy. The insurer needed to defend the municipality only with respect to the claims insured for the contractor. The municipality was to continue with its own counsel to defend with respect to all other causes as alleged in the claim.
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