Contracts for the removal of ice and snow from commercial premises usually contain a provision stating that the contractor is to obtain a liability insurance policy in which the property owner is named as an additional insured. These “insurance and indemnity” clauses usually also state that the contractor is to indemnify the property owner for claims arising out of deficiencies in the contractor’s work.

This type of clause was the subject of a recent summary judgment decision in Papapetrou v. 1054422 Ontario Limited.  The plaintiff brought an action against the owners of a building and their snow removal contractors, saying she had been injured when she fell on some icy steps.  The building owner brought a motion for summary judgment dismissing the plaintiff’s action, or in the alternative, for an order that the snow removal contractor assume the owner’s defense.

The plaintiff did not appear, and counsel advised that the plaintiff took no position regarding the motion.  The judge who heard the motion thought this was relevant, given that the main relief sought on the motion was dismissal of the claim the plaintiff had brought against the defendant property owners.

The motions judge referred to case law indicating that in determining whether or not a claim comes within insurance policy coverage, courts are not strictly bound by the language chosen by the plaintiff, but must determine the true nature of the claim as stated in the statement of claim.

Although the allegations in the statement of claim contained claims that did not “fall within the general occupiers’ liability basket”, the motions judge concluded that the true nature of the claim was for negligence in failing to maintain the steps.  That interpretation was reinforced by the fact that the plaintiffs took no position on the property owner’s motion.  If the plaintiffs were pursuing separate claims as against the property owners (claims distinct from the failure to remove ice), then the plaintiffs would have defended those claims on the motion.

Although the defendant snow removal contractor had failed to obtain liability insurance in accordance with the contract provisions, the court held that this failure should not help them avoid responsibility for their obligation to defend and indemnify.  The court ordered the contractor to assume the property owner’s defense, and indemnify it from any damages awarded to the plaintiffs.

Richard Hayles, B.A., J.D.
Insurance and commercial litigation lawyer

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