Despite an exclusion for bodily injury caused by the use of a gun, the insurer had a duty to defend claims the insured had breached its duties related to its capacity as an occupier of the premises where the shooting occured.
Kinkade v. 947014 Ontario Inc. (c.o.b. The Silver Dollar),  O.J. NO. 1271, March 20, 2014, Ontario Superior Court of Justice, G. Roccamo J.
An insured sought coverage under a Commercial General Liability policy for claims that the insured was vicariously liable for its employee’s negligent discharge of a firearm and personally liable under the Occupier’s Liability Act for failing to ensure the plaintiff would be reasonably safe. The policy excluded coverage for bodily injury arising out of the use of a gun.
The insurer argued that the claim related solely to bodily injury arising from ownership or use of a gun and it owed no duty to defend. The insurer took the position the allegations with respect to the insured’s pre-injury conduct, including the failure to properly supervise or train the employee and screen employees for violent tendencies were allegations derivative of the excluded claim for bodily injuries arising out of the use of a gun.
The insured argued most of the allegations against it arose out of its duty as an occupier and were unrelated to the allegations related to the use or ownership of a gun. Accordingly, the insurer was not relieved of its obligation to indemnify and defend the insured for the unrelated allegations. The insured also argued the exclusion clause should not be interpreted to mean that an excluded act by one insured, in this case the employee, vitiated coverage for all insureds.
The court held the allegations that the insured was liable in its capacity as an occupier for failing to take reasonable steps to ensure the safety of the plaintiff were sufficiently distinct from the use or ownership of a handgun. These claims were not derivative of the excluded loss and should not be subsumed under it for the purpose of applying the exclusion clause.
The court also commented on instances where accidents are alleged to be the result of two concurrent causes, one of which is excluded from coverage. The court found that the exclusion clause in the policy should be interpreted so that coverage is only excluded with respect to the excluded occurrence and the other non-excluded concurrent occurrence would still fall within coverage. The alleged concurrent cause of injury, the insured’s failure to warn and ward against danger, was not excluded. The insurer was obligated to provide a defence to the insured.
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