Insurance law – Homeowner’s insurance – Duty to defend – Exclusions – Bodily injury – Intentional acts – Duties and liabilities of insurer
R.C. v. Western Assurance Co.,  O.J. No. 21, 2022 ONSC 100, Ontario Superior Court of Justice, January 5, 2022, K. Muszynski J.
The insureds sought a defence under their homeowner’s policy for a claim relating to an alleged schoolyard assault by the insureds’ son. The plaintiff in the underlying action alleged that the son physically and emotionally assaulted the plaintiff, filmed the assault, and uploaded the video to social media where it was widely circulated. The claim against the insureds was that they failed to prevent their son’s actions.
The insurer denied coverage on the basis of an exclusion for personal injuries caused by any intentional act by insureds (the “deliberate acts” exclusion), and an exclusion for the failure of an insured to take steps to prevent physical, psychological or emotional abuse, molestation or harassment or corporal punishment (the “failure to prevent” exclusion). The policy also excluded the distribution of data by means of the internet. The insureds acknowledged that the exclusion relating to the distribution of data applied, and that the insurer did not owe them a defence regarding the uploading of the video to social media. However, the insureds argued that the deliberate acts and failure to prevent exclusions did not apply.
Citing Unifund v. E(D), 2015 ONCA 423, the court agreed with the insureds that the deliberate acts exclusion did not apply. The allegations against the insureds were based in negligence, and were distinct from the intentional tort claim made against their son. On the other hand, the failure to prevent exclusion applied to preclude coverage. The court rejected the insureds’ argument that the language of the exclusion suggested an ongoing occurrence, and that the exclusion applied to “physical abuse” but not to an “assault” as alleged in the underlying action. Read as a whole, the substance of the allegations in the statement of claim amounted to physical abuse, and arguably harassment. The failure to prevent exclusion did not contain any wording limiting its scope to ongoing activity or multiple acts.
This case was digested by Joe Antifaev, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Joe Antifaev at firstname.lastname@example.org.
To stay current with the new case law and emerging legal issues in this area, subscribe here.