An additional insured under a commercial general liability policy was entitled to a defence in a claim in which the allegations of negligence against it and the named insured were the same

Insurance law – Commercial general liability insurance – Duty to defend – Additional named insured – Subcontractors – Practice – Pleadings – Underlying action

Dufferin Construction Co., a Division of Holcim (Canada) Inc. v. Dominion of Canada General Insurance, [2015] O.J. No. 5320, 2015 ONSC 6311, Ontario Supreme Court of Justice, October 13, 2015, C.J. Brown J.

The insured, Dufferin Construction Company Inc. (“Dufferin”), brought a motion for a determination of whether the Dominion of Canada General Insurance Company (“Dominion”) had a duty to defend it under a commercial general liability policy issued to The Downsview Group (“Downsview”) and to which Dufferin had been added as an additional insured. Dufferin was contracted by the City of Toronto for various repairs, construction, and improvements in relation to certain streetcar tracks and islands. Dufferin subcontracted Downsview to lay pavers on the streetcar islands. As required by the subcontract, Dufferin was added as an additional insured to the project specific CGL policy issued by Dominion to Downsview. The certificate stated that Dufferin was covered as an additional insured only with respect to liability arising out of Dufferin’s operations at the project.

The plaintiff in the underlying action alleged that she tripped and fell on a sunken paver stone on one of the streetcar islands. As against both Dufferin and Downsview she pleaded that they were both responsible for the proper care, maintenance and repair of the island. The same particulars of negligence were pleaded as against all of the defendants. Dufferin argued that there was nothing that would indicate that the allegations of negligence did or did not arise out of Downsview’s operations at the project, given that the particulars of negligence against all of the defendants were the same. Dominion argued that the plaintiff did not allege that Dufferin’s negligence or liability arose out of the work performed by Downsview but, rather, that the claim against Dufferin was for liability arising out of its own operations and work.

The court noted that the pleadings were vague, especially with respect to whether the alleged negligence, which was alleged against all defendants, could be attributable to Downsview’s work. As such, liability could be found to arise from the actions of Downsview or Dufferin. Thus, the pleadings alleged facts that, if true, would require Dominion to indemnify Dufferin for the claim and Dominion was thus obligated to provide a defense to Dufferin as an additional insured.

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