In Moore Equipment Ltd. v. Temple Insurance Company, 2021 ONSC 3622, the Court examined an endorsement in a comprehensive general liability insurance policy to determine whether the Applicant was entitled to coverage under the policy as an “Unnamed Insured”.
The Applicant, Moore Equipment Ltd. (“Moore”), brought an application seeking a declaration that it was either an additional insured or an “Unnamed Insured” on a policy issued by the Respondent, Temple Insurance Company (“Temple”), to Bondfield Construction Company Limited (“Bondfield”).
Temple argued that Bondfield’s failure to name Moore as an additional insured precluded coverage and that there was no duty to defend Moore.
Moore leased a scissor lift to Bondfield that was used as part of a construction project involving the installation of solar panels on the roof of a building.
Under the lease agreement, Bondfield was required to indemnify and hold Moore harmless, assume all risks, and be responsible for all damages and losses incurred while leasing the scissor lift. Further, Bondfield was required to obtain all risk liability insurance for the construction project and name Moore as an additional insured.
Bondfield obtained a commercial general liability policy with Temple but failed to name Moore as an additional insured.
The policy contained an endorsement which provided coverage for an “Unnamed Insured:
5. Any person, firm, municipality, government agency or corporation (hereafter referred to as an “Unnamed Insured”) in whose name the Named Insured has, by written agreement, contracted to effect insurance as provided by this policy. However, the insurance provided for such Unnamed Insured is restricted to apply solely to liability arising out of operations performed by or on behalf of the Named Insured in connection with contract(s) performed for such Unnamed Insured [emphasis added].
Bondfield also had a contract with the owner of the premises for its construction work. This contract included an electrical inspection of the solar panels. Bondfield obtained a comprehensive general liability policy to cover any claims resulting from the installation and maintenance of the solar panels installed by Bondfield for the owner of the premises.
During the construction, an electrical safety inspector was injured while using the scissor lift to inspect the installation of the solar panels. As a result, the inspector commenced an action in negligence against Bondfield and Moore.
Moore agued that Temple had a duty to defend Moore in the litigation on the basis that it was an “Unnamed Insured” as described in the endorsement.
The central issue before the Court was whether Moore was an “Unnamed Insured” pursuant to Bondfield’s policy with Temple, such that Temple had a duty to defend Moore in the litigation.
In interpreting the endorsement, the Court determined that Moore met the definition of an “Unnamed Insured”. However, the Court noted that the insurance coverage for an Unnamed Insured pursuant to the language of the endorsement was limiting.
The Court reasoned that the insurance provided pursuant to the endorsement was restricted to liability that arose out of the operations performed by Bondfield in connection with the contract performed “for” Moore. Bondfield was performing or fulfilling its lease contract “for” Moore by making regular lease payments. However, the Court stated that the liability did not arise out of Bondfield making lease payments to Moore, but rather arose from conducting the electrical inspection for Bondfield and the owner.
Since the liability of Moore did not arise out of the operations of Bondfield in connection with a contract performed by Bondfield for Moore (as required by the endorsement), the Court held that Moore was not entitled to insurance coverage.
The Court determined that the language in the endorsement was unambiguous, and dismissed Moore’s Application.
If the Court had determined that the language was ambiguous, it would have examined the reasonable expectations of the parties. However, this was not necessary in this case.
Of note, while Moore could have also pursued Bondfield for damages for breach of contract arising from Bondfield’s breach of the covenant to insure in the lease pursuant to Papapetrou v. 1054422 Ontario Ltd, 2012 ONCA 506, Moore’s Crossclaim had been stayed as Bondfield had declared bankruptcy.
This decision provides insight into how the Court will interpret endorsements in CGL policies that refer to an “Unnamed Insured”.