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CCCA_V3No4_Dept-RiskMgmt-FIN.qxd:CCCA_V1No2_Dept-CrossBdr-V1.qxd 11/24/09 11:26 AM Page 11 Insurance update Risk Management Policy holders beware: CGL coverage is not what it used to be. By Elizabeth Raymer holder with $200-million in coverage. In 2005, the Insurance Bureau of Canada issued a revised wording of the CGL policy. “The attempt in the 2005 revision was to cut down on this contin- uous trigger analysis,”said Donnelly.“This has not, as far as I know, been litigated in the courts,and so the interpretation of the language is still going to be open.” The revised CGL policy reads, in part: “This insurance applies to ‘bodily injury’ and ‘property damage’ only if:… Prior to the policy period, no insured… and no ‘employee’ authorized by you to give or receive notice of an ‘occurrence’ or claim, knew that the ‘bodily injury’ or ‘property damage’ had occurred, in whole or in part.” Another clause reads: “‘Bodily injury’or‘property damage’will be deemed to have been known to have hanges in Commercial General a recent CCCA/Ontario Bar Association occurred at the earliest time when any CLiability coverage mean policy CLE seminar in Toronto. insured… or any ‘employee’ … (1) Reports holders need to be more aware when “However, if that same claim took place all, or any part, of the ‘bodily injury’ or taking out insurance, and a good insur- after 2005, it’s possible you have only $50- ‘property damage’ to us or any other insur- ance broker is more important than million of coverage to cover $175-million er; (2) Receives a written or verbal demand ever, insurance lawyers are warning. risk.So a very small change in policy might or claim for damages because of the ‘bodily Industry revisions to the CGL policy in lop off $150-million of your coverage.” injury’or‘property damage’;or (3) Becomes 2005 are serious and have not been wide- CGL coverage covers liability for proper- aware by any other means that ‘bodily ly publicized, says Thomas Donnelly of ty damage, food poisoning, explosions and injury’ or ‘property damage’ has occurred or Thomas Gold Pettingill LLP, a Toronto- damage to property, and more. Coverage is has begun to occur.” based law firm specializing in insurance triggered when bodily injuries or property and commercial disputes. damage occurs. If the injuries took place “The potential position insurers will Donnelly presented a real-life scenario from 2001 to 2005, courts have said that all take is as soon as that problem first of damages from a defective product, sold the annual policies for 2001 to 2005 will becomes known, then that’s the policy across Canada and the United States and apply, Donnelly said. In Alie v. Bertrand and that’s going to apply,”Donnelly explained. resulting in multiple class-action lawsuits, Frère Construction Co. (Ontario), the Court “That first house burns in 2001,that 2001 that took place between 2001 and 2005; of Appeal in 2002 adopted the“continuous policy will apply.The subsequent policies ISTOCKPHOTO the potential range of damages is $175- trigger” analysis: the policy would apply will not apply because it’s a known loss… from when the property damage started in And that is, in my view, a huge change in million,and the company has $200-million in insurance coverage. He was speaking at the potential coverage.” 2001 and ended in 2005,leaving the policy HIVER 2009 CCCA Canadian Corporate Counsel Association 11