It’s All About The Detail In The Description Of Your Operations
Ian H. Gold of Thomas Gold Pettingill LLP cited in his article in the November 2014 edition of the Ontario Broker Magazine, a recent decision by Ontario’s Superior Court of Justice that can affect your coverage – and it is all about the detail.
Intact Insurance Co. v. Virdi, 2014 ONSC 2322 is a case precedent strictly decided on the basis of the description of the business on the declaration page of the policy. Neither the conditions nor the exclusions of the policy dictated the outcome of the claim – strictly the description. The reason this analysis worked in favor of the insurer is that the description on the declaration page defines the scope of coverage on the policy whereas previously there was some doubt that an insurer could rely on this description to deny a claim. This case revolved around a lawsuit through the Commercial General Liability portion of the policy and involved a manufacturer that had a separate business not described on the declaration page of the policy. Coverage was denied. All activities, services and products that are delivered, sold, provided and published should be discussed with your broker. Careful attention to detail these as a description is now more critical than ever to insure coverage will apply.
How does this affect other businesses, child cares and schools? Not only Bodily Injury and Property Damage General Liability lawsuits depend on the accuracy of the declaration – other insurance products do as well. Professional and Miscellaneous Errors & Omissions Liability policies rely entirely on the definition of the professional services provided.
Regular attention to details on the insurance policy declaration page and related policy endorsements are very important. While it may seem self-explanatory to list daycare or school services as a descriptive summary, many in this category have had the following activities impact not only the overall risk, but the cost of insurance too.
Activities to consider:
1. After hours or week-end home tutoring or child sick-care services
2. Catering services and transport of meals with staff vehicles.
3. School supplies sales (If these products come from China , you become the domestic manufacturer) .
4. Management of other businesses whether temporary or long-term.
5. Consultant services, coordinating web-based referral services for para-medical support professionals.
6. Publishing a book and conducting workshops, training or advocacy services.
While the devil can be in the detail, consulting with CCV to accurately guide you is your best assurance of obtaining an insurance policy that fits your needs and will stand the legal test in a claim.