Proudly presents Navigating Contractual Indemnity and Additional Insured Coverage. Gregory S. Miller, P.Eng., LLB LKLAW

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1 Proudly presents Navigating Contractual Indemnity and Additional Insured Coverage Gregory S. Miller, P.Eng., LLB LKLAW

2 Topics 1. Contractual Risk Allocation 2. Additional Insured 3. Examples

3 Contractual Risk Allocation Limitations of Liability Indemnities Covenant to Insure

4 Contractual Risk Allocation Limitations of Liability Temporal Modification of Statute / Common Law The Architect's liability for all claims of the Client shall absolutely cease to exist after a period of years from the date of Substantial Performance of the Work following which the Coient shall have no claim whatsoever against the Architect.

5 Contractual Risk Allocation Limitations of Liability Damages Cap (monetary or insurance limit) The Client agrees that any and all claims... Shall be limited to the amount of $ Type The Contractor shall not be liable to the Corporation and the Corporation hereby waives recovery from the Contractor, of all Consequential Damages.

6 Contractual Risk Allocation Indemnities You must indemnify and save harmless us and our employees and agents (each an Indemnified Person ) from any losses, claims, damages, actions, causes of action, costs and expenses which are based upon, arise out of or occur, directly or indirectly, by reason of any act or omission by you or by any of your agents in providing the Services, except liability arising out of any independent negligent act by us

7 Contractual Risk Allocation Covenant to Insure The Lessor covenants to insure the property against all risk of loss or damage caused by or resulting from fire, lightning or tempest or any additional peril defined in a standard fire insurance additional peril supplemental contract. All such insurance shall, to the best of the ability of the Lessor, be to the full insurable value of the property insured. the Contractor shall provide, maintain, and pay for the insurance coverages specified in GC INSURANCE.

8 Contractual Risk Allocation Covenant to Insure... The Owner will provide and maintain fire insurance with standard extended coverage endorsement on buildings, materials, equipment, appurtenances and other similar property to be used in or incidental to the fabrication, installation and completion of the work.

9 Additional Insured Two obvious methods of enacting covenant Definition of insured in policy Additional insured endorsement

10 Additional Insured - Definition IBC CGL (r) 1. If you are designated in the Declarations as: a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner. b. A partnership, limited liability partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business. c. A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers...

11 Additional Insured - Definition Wrap-up Liability NAMED INSURED and/or subsidiary and/or affiliated and/or associated companies and all contractors, subcontractors, architects, engineers and project managers Builders Risk In respect of ''The Construction Operations" performed by or for the Insured, additional interested parties are included in the name of the Insured only as regards to property of the aforesaid interested parties, provided that such interested parties are required by written agreement with the Insured to be insured.

12 Additional Insured - Definition CGL Each person, firm corporation or government body for whom the Insured has contracted to provide insurance is an Insured but only with respect to liability which arises out of the operations of the Insured, and only to the extent required by such contract.

13 Additional Insured Endorsem t In consideration of the premium charged, it is agreed that DEFINITIONS is modified to include the following: 5. INSURED - corporations associated with or employing the INSURED, but solely for CLAIMS arising out of an error, omission or negligent act in the rendering of INSURED SERVICES by the INSURED. It is hereby understood and agreed that the following is added to Section ll - PERSONS INSURED: Any person(s) or organization(s) listed in the schedule below but only with respect to the Operations of the Named Insured.

14 Additional Insured Endorsem t Section II. Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for injury caused, in whole or in part, by 1. Your acts or omissions; or 2. The acts or omissions of those acting on your behalf in the performance of your ongoing operations for the additional insured(s) at the location(s) designated above. each of the entities described below is to be included as an Additional Insured but only with respect to liability arising out of or attributable to the work of the Named Insured

15 Examples Covenant to Insure Rough Bay Enterprises v. Budden 2003 BCSC 172 Covenant to insure barge for benefit of all parties defeats subrogation Madison Developments v. Plan Electric 1997 CanLII 1277 (ONCA) Covenant to insure project under construction Policy read to include subcontractor as unnamed insured

16 Examples Additional Insureds Stolberg v. Pearl Assurance [1971] SCR 1026 Endorsement added president of insureds as named insured Exclusionof coverage for companies not effective re president ING Insurance v. Sportsco CCLI (4 th ) 86 Cross liability clause modified exclusion to benefit of additional insured Mercer v. Paradise [1991] NJ No. 126 Covenant to insure, certificate issued but not added Nothing to indicate only vicarious liability covered

17 Examples Additional Insureds Cowichan Valley School Dist v. Lloyds 2003 BCSC No covenant to insure, but School District covered for liability arising out of... clear nexus between broken ankle and operations of named insured Kocherkewych v. Greyhound Canada 2006 BCSC 534 R&Z covenants to insure Greyhound and policy covers as unnamed insured Greyhound covenants to insure Northland No cascade effect

18 QUESTIONS?

19 Enjoy the rest of the 2013 RIMS Canada Conference!