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Obligations to Insure & Risk

Posted on November 30, 2022 | Posted in Construction, Five Liners

Capital Sewer Servicing Inc. v. Crosslinx Transit Solutions Constructors 2022 Ont CA

Just because a contract stipulates that a party must obtain insurance does not necessarily mean that the party who has to insure bears the risk of loss. That depends on the interpretation of the contract as a whole. In this case, in which a sub caused a loss to third party neighbours who sued the general contractor and the sub, the owner had to obtain a primary wrap-up liability policy, naming as insureds all contractors and subcontractors. However, since the contract called for the sub to indemnify the general contractor against all of its acts that caused loss to the general contractor, the court held that the sub had to indemnify the general contractor for defence costs, indemnity payments made, and insurance deductibles, regardless who had to obtain insurance.

 

Jonathan Speigel

 

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.

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