Canadian Underwriter

Criminal intent is irrelevant when interpreting exclusions for criminal acts

February 16, 2007   by Canadian Underwriter

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The Ontario Court of Appeal has found that insurance companies can exclude coverage for liability on the basis of criminal acts, regardless of whether or not the criminal act was intentional.
Kirk Boggs, a lawyer with Lerners, argued the case before the Court of Appeal along with Kirk Stevens of Lerners and Laird Scrimshaw of Thunder Bay. They represented The Wawanesa Mutual Insurance Company.
The insurance industry will benefit from the decision,” Boggs said in a press release, “because it clearly defines when they can exclude coverage for criminal behaviour.
“Policies containing criminal acts exclusions are written every day throughout this country and the Court of Appeal has now clarified that intent has no place in interpreting the exclusion.
In Eichmanis v. Wawnesa Mutual Insurance Company, Ryan Eichmanis was seriously injured when he was shot by Ryan Prystay.
Eichmanis, Prystay and a third teenage boy were playing with a loaded gun in Prystays fathers home. The three boys had broken into the home, vacated by the father (who at the time was in a substance abuse rehabilitation facility), contrary to the fathers instructions not to be there. At the time, Prystay was living with his uncle and aunt.
Prystay pled guilty in Youth Court to a charge of criminal negligence causing bodily harm. Eichmanis sued the Prystay, as well as Prystays father, uncle and mother.
The motions judge found that Prystay was living with his aunt and uncle at the time. Eichmanis had sued for damages under the uncle and aunts homeowner policy, but the insurers denied coverage on the basis of an exclusion for activities caused by any intentional or criminal act.
In 2006, the Ontario Superior Court held the insurer’s exclusion did not apply, because the criminal activity in the Eichmanis case was not intentional (Prystay did not mean to shoot his friend).
But the Court of Appeal found that even if the criminal intent portion of the exclusion did not apply, the criminal act portion of the exclusion did. The exclusion applies to injury caused by any intentional OR criminal act, Ontario Court of Appeal Justice Stephen Borins wrote for the three-member panel of judges. A number of courts have held that this exclusion is clear and unambiguous. Intention is not a required element of the criminal act