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LIABILITY INSURANCE - Exclusions - Household or homeowner’s policies

Friday, November 10, 2017 @ 8:39 AM  


Appeal by Economical Mutual Insurance Company (Economical) from the dismissal of its application for summary dismissal of Gill’s third-party notice. Economical issued a Residential Insurance Protection Agreement policy to Gill, covering a variety of specified risks. “Insured” was defined in the policy to include Gill and resident family members, including his spouse, relatives and children under 21 years old in Gill’s care. Gill took his son Gurjeet to a mall on June 30, 2009, where the child sustained serious injuries as a result of falling through an opening near an escalator. Gill, as Gurjeet’s litigation guardian, commenced a tort action against the owner of the mall. The Public Trustee replaced Gill as litigation guardian in August 2014. Schindler Elevator Corporation was added as a defendant. The mall issued a third party notice against Gill, seeking contribution and indemnity on the basis that he was negligent in supervising Gurjeet. Two other defendants subsequently added to the litigation also issued third party notices against Gill. Gill reported the third party claims to Economical. Economical denied coverage based on the family member exclusion to coverage for personal injuries under Gill’s policy. Gill issued a third party notice against Economical and the broker from which he obtained the policy. Economical’s application for summary dismissal of the third party claim was dismissed, the judge finding that the family exclusion clause in Gill’s policy was ambiguous with respect to whether it applied to direct and indirect claims.

HELD: Appeal allowed. Gill’s third-party notice was dismissed. There was no ambiguity. The family exclusion clause excluded coverage for all claims arising from bodily injury to any person residing in Gill’s household. The fact that the words “directly” and “indirectly” appeared elsewhere in the policy did not give rise to uncertainty with respect to the meaning of the clause. An average person reading the policy would understand that the family member exclusion meant that an insured did not have coverage for any claims arising from bodily injury to a family member residing in Gill’s household.

Gill (Litigation guardian of) v. Ivanhoe Cambridge I Inc. (c.o.b. Metropolis at Metrotown) (appeal by Economical Mutual Insurance Co.), [2017] B.C.J. No. 2033, British Columbia Court of Appeal, S.D. Frankel, E.A. Bennett and J.E.D. Savage JJ.A., October 17, 2017. Digest No. TLD-November62017010