When A Contractor Fails To Name A Property Owner As An Additional Insured

With winter weather on the horizon, 'tis the season for slips and falls. To keep visitors safe, many property owners will contract out their winter maintenance this year. A standard obligation imposed on contractors under these winter maintenance contracts is the requirement to obtain comprehensive general liability insurance naming the property owner as an additional insured. But what happens if the contractor fails to name the property owner as an additional insured?

Duty to defend

An insurer is required to defend an insured against any claim where the facts alleged in the pleadings, if proven to be true, would require the insurer to indemnify the additional insured for the claim.[1] This is known as the duty to defend. It entails the insurer paying for and instructing legal counsel to defend a claim brought against its insured by a third party. Where a contractor has not named a property owner as an additional insured to the policy, the insurer does not have a duty to defend the property owner. However, this does not mean the property owner is left holding the bag. The following two Ontario cases illustrate this fact.

Papapetrou v 1054422 Ontario Ltd, 2012 ONCA 506

In Papapetrou v 1054422 Ontario Ltd, 2012 ONCA 506 (Papapetrou), the plaintiff, Maria Papapetrou, claimed she was injured when she slipped and fell on black ice that had accumulated on the stairs of The Galleria, a building owned by 1054422 Ontario Limited and managed by The Cora Group Inc. (collectively, The Cora Group). Prior to the alleged fall, The Cora Group contracted Collingwood Landscape Inc. (Collingwood) to provide winter maintenance and snow removal services for The Galleria. In its service contract, Collingwood promised to name The Cora Group as an additional insured on Collingwood's commercial general liability insurance policy; however, Collingwood failed to do so.

In the lower court, Collingwood was required to assume the defence of The Cora Group, a decision that was varied on appeal. Collingwood's breach of its contractual obligation to name The Cora Group as an additional insured did not create a duty to defend; rather, it gave rise to a remedy in damages. The fact that The Cora Group did not object to the form of insurance Collingwood obtained was irrelevant; Collingwood's contractual obligation remained. As such, Collingwood was liable to The Cora Group in damages.

Ordinarily, the scope of this obligation would be determined by the terms of the insurance...