juil. 26. 2020

A 'Group' policy of which you are a 'Member' is not your insurance policy with the insurer

Van Huizen v. Trisura Guarantee Insurance Company, 2020 ONCA 222 (CanLII)

In Van Huizen v. Trisura Guarantee Insurance Company 2020 ONCA 222 (CanLII), Van Huizen was a professional appraiser, Van Huizen did his appraising through a professional corporation, Hastings Appraisal Services.

Barkley was a professional appraiser working ‘under the auspices of Hastings Appraisal Services’.

Being professional appraisers they were required to have and did have professional negligence insurance. Not unlike lawyers, appraisers got together under the Appraisal Institute of Canada and secured a 'group' insurance policy.

But what really is a ‘group insurance policy’? Is it precisely the same thing as the policy you as an individual get when you call up an insurer and sign a policy?

There are complications: a ‘group’ policy in this case was only the umbrella description of what the insurer offered by way of coverage. The devil is in the details: who precisely is covered by the ‘group’ policy is not determined by the ‘group’ policy. Who is covered is determined by the totality of the documents which include the ‘group’ policy and the individual contract that the insurer enters into with each ‘group’ member (para 35).

Why is it important to identify all of the documents that make up each individual’s policy?

Because loose words in the group policy might be contradicted, restricted and parameterized by more careful words in the individual policy.

When Barkley was sued for professional negligence, the plaintiff sought to add Van Huizen and Hastings Appraisal as the ‘employer’ of Barkely and therefore liable vicariously.

There is no doubt that ‘employers’ are covered for vicarious liability but for the employer to access the protection, it must come through the policy of the specific employee wrongdoer,

The fact that Van Huizen happens to be the employer through Van Huizen's corporation (Hastings), does not mean Van Huizen can automatically treat Van Huizen's personal professional indemnity policy as though it were some sort of blanket employer insurance policy.

The definition of ‘employer’ in the ‘group’ policy seemed wide enough to allow that Hastings was covered for Barkley’s wrongdoing (para 39). Just because something looks wide enough, upon a liberal interpretation, does not mean that is the correct interpretation.

Hastings could be an ‘insured’ for one event (Van Huizen’s ‘wrongful act’) and not an ‘insured’ for another event (Barkley’s ‘wrongful act’).

As it turns out the definition of ‘wrongful act’ (being the actual thing that the insured is covered for in Van Huizen's individual policy) was restricted to Van Huizen’s wrongful acts and did not extend to Barkley’s wrongful acts.In other words, Van Huizen's policy covered himself but was not some sort of blanket employer policy covering all 'employees'.

Roberts J.A. determined this by construing a unique one-to-one relationship between the 'employer' and each group ‘member’. Van Huizen and Hastings were covered for any wrongful act of Van Huizen. Under the Van Huizen policy, Hastings was covered for any vicarious issues involving Van Huizen, but no one else! There is only one insured under Van Huizen’s policy (Van Huizen personally, or Hastings as the employer of Van Huizen). Van Huizen’s policy is not some sort of corporate blanket policy covering anyone who might work for Hastings. Only Van Huizen is named in the certificate of insurance (para 57).

Van Huizen sought protection from the vicarious attack under his own Van Huizen policy whereas the proper place for Hastings to seek protection was to shelter under Barkley’s policy which protects Barkley and any Barkley employer (para 54).

My Economics Comment:

Roberts J.A. set out a mathematical-type formula where the employer-set is linked to an employee-set that contains only one named member for vicarious purposes. Think of a circle with Hastings in it; think of a second circle with Van Huizen’s name in it; connect the circles. This is the employer-employee vicarious relationship where only one name is on the insurance certificate.

There is another set of circles with Hastings in one circle connecting to Barkley in a second circle. This is the employer-employee vicarious relationship under the Barkley policy where only Barkley is named in Barkley’s certificate. Hastings might therefore be covered under the Barkley policy from Barkley’s errors.