No coverage for additional insured where claim against additional insured did not arise solely out of the operations of the primary insured

Insurance law – Liability insurance – Duty to defend – Additional named insured – Practice – Underlying action

Brookfield Johnson Controls Canada LP (c.o.b. Brookfield Global Integrated Solutions) v. Continental Casualty Co., [2017] O.J. No. 5173, 2017 ONSC 5978, Ontario Superior Court of Justice, October 5, 2017, J.E. Ferguson J.

The insured sought a declaration that the insurer had a duty to defend the insured with respect to an action brought by two plaintiffs for personal injuries sustained on premises managed by the insured.

The insured had a contract with Olympic Dust Control. Pursuant to the contract, Olympic was to supply rental floors mats for a variety of CIBC branch locations.  Further, Olympic was to name the insured as an additional insured on its policy of insurance.  The plaintiffs’ claim for personal injuries arose out of a trip on a floor mat that was loose and not level.  It was alleged the floor mat which gave rise to the accident was supplied by Olympic.  In the action, the plaintiffs alleged the injuries were caused by the negligence of the insured (and other defendants).

The insurer submitted there was no coverage available to the insured because the claims made against the insured were not in substance claims “arising solely out of the operations of Olympic”. Rather, the claims made against the insured were in substance and true nature claims arising out of its own allegedly negligent operations as a property manager.  The insurer submitted the coverage provided to the insured as an additional insured is limited to any liability that may be imposed on the insured because of the supply or removal by Olympic of floor mats.

The Court held there was no coverage available to the insured through the insurer because the claims made against the insured were not in substance claims arising solely out of the operations of Olympic.

This case was digested by Cameron B. Elder, and first posted on Quicklaw and published in the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Cameron B. Elder at celder@harpergrey.com.

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