Failing to obtain insurance may not give rise to an occurence under a CGL policy.

Application for a declaration of a duty to defend dismissed because there was no occurrence under the policy of insurance and there was no possibility of a duty to indemnify.

Co-operators General Insurance Co. v. Assn. of New Brunswick Cemeteries, [2012] N.B.J. No. 4, January 10, 2012, New Brunswick Court of Queen's Bench, J.L. Clendening J.


A fire occurred at Ocean View Cemetery Inc. (“Ocean View”), which destroyed a building and some equipment. Wawanesa Insurance (“Wawanesa”) issued a commercial insurance policy (the “Policy”) to the Association of New Brunswick Cemeteries (the “Association”). Ocean View was a member of the Association and was insured under the Policy.

The Policy had a limit of $100,000 and it was alleged there was no coverage for equipment at the Ocean View location. Wawanesa paid out the limit of the Policy as the loss was far in excess of the limit. Subsequently, Ocean View commenced an action against the Association for the uninsured loss. The statement of claim contained the following allegations against the Association:

(a)        Failing to advise the plaintiff that the Insurance Policy did not cover its tools, machinery and equipment;

(b)        Failing to transmit the June 2008 request for confirmation of coverage from the plaintiff to Assurance Vienneau;

(c)        Failing to communicate with Assurance Vienneau to inform it of the substance of the plaintiff’s request;

(d)        Failing to advise the plaintiff with respect to the various coverage provided by Wawanesa or other carriers regarding tools, machinery and equipment; and

(e)        Failing to advise the plaintiff to purchase insurance coverage for its tools and equipment …


The Co-operators General Insurance Company (“Co-operators”), the current insurer of the Association, applied for a declaration that Wawanesa had a duty to defend the Association in the action commenced by Ocean View.

The commercial liability coverage section of the Policy provided coverage for “bodily harm” or “property damage” as a result of an occurrence. Co-operators argued that the statement of claim alleged that the Association, Harold Steeves (the Association’s secretary) and their broker were negligent and breached their duty of care and that this amounted to an occurrence such that Wawanesa owed a duty to defend. In response, Wawanesa asserted there were no allegations relating to “bodily harm” or “property damage” in the statement of claim.

The Court found the statement of claim clearly contained allegations of a breach of duty for failing to obtain sufficient insurance coverage. However, these allegations did not fall within the coverage provisions of the Policy. The court noted there was no coverage for errors and omissions under the Policy. As a result, there was no possibility of a duty to indemnify and therefore no duty to defend.

The Court also noted that failing to obtain insurance coverage was not an occurrence as defined in the Policy. The alleged negligence of the Association did not cause the fire. Therefore, there was no occurrence under the Policy.

This case was originally summarized by Aaron D. Atkinson and originally edited by David W. Pilley.

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