Executive is employee for purposes of insurance exclusion

A nice little contract interpretation case this week from the Ontario Superior Court of Justice. Is a company executive an “employee” for purposes of a general commercial liability nsurance policy that excludes coverage for “‘Bodily injury’ to an employee of the insured arising out of the and in the course of employment by the insured.”

Most of the employer’s workforce was covered by Canadian workers’ comp insurance, but the company opted out of coverage for senior executives because it could get better insurance for them cheaper than through the WSIB. It got such insurance, which apparently lapsed at some point. It acquired a general commercial liability policy from the insurer which excluded workplace injuries — presumably because those would ordinarily be covered by the WSIB insurance. When a senior executive was run over by a large crane and lost his leg, the insurer denied liability. The Ontario court held that the exclusion was proper, since an “executive officer” is an “employee.”

The case is Sam’s Auto Wrecking Co. v. Lombard General Insurance, 2011 ONSC 6441. Via Mondaq , Ontario’s Siskinds LLP has a summary and some commentary here.

FGS