July 5, 2011 by Canadian Underwriter
A McMillan LLP article says insurance companies should be discussing any expectations placed on clients and restrictions on activities permitted on insured premises or within an insured vehicle, based on an Ontario arbitrator’s ruling in Whipple v. Economical Mutual Insurance Company.
In Whipple, now under appeal, Daniel Whipple, 62, was paralyzed after attempting to do a handstand on a “stripper pole” inside a luxury limousine coach. The bus was taking a party of 12 home following a round of golf.
The Economical denied benefits, arguing the handstand attempt did not amount to an “accident” because the effort had nothing to do with the ordinary use or purpose of a vehicle.
The arbitrator ruled against the insurer, saying the presence of the stripper pole inside the so-called “party bus” invited the kind of behaviour that resulted in the injury.
In an article for the International Law Office, McMillan LLP lawyer Hartley Lefton says insurers need to work closely with clients to identify expectations about conduct and whether it will be insured.
“It is likely that the limousine coach owner and the insurer had different conceptions of permitted activities,” Lefton noted.
Lefton suggested insurers and their clients “work together to develop a written policy or contract dictating how the insured vehicle or premises should be used by clients.”
He further observed “no rules or policies were communicated to Daniel Whipple when he rented the bus, nor was there any evidence of any express or implied waiver.”
Also, Lefton wrote, “it is important to review the marketing by insureds of their premises or vehicles. “The fact that the vehicle was referred to as a ‘Party Bus’ designed to provide ‘service and transportation needs to fit the client requests’ weighed heavily on the arbitrator in her determining that Whipple’s activities were not outside of the scope of the vehicle’s use and operation.”
Finally, “it is important to review the insured premises and vehicles,” Lefton says.