Property exclusion should have specified “equipment,” Appeal Court rules

By referring vaguely to “property” damage, an exclusion contained in a marina’s all-risks insurance policy was inoperable because the exclusion didn’t specifically refer to the marina’s “equipment,” the Ontario Court of Appeal has ruled.
The Appeal Court thus rejected the appeal of the insurer against the marina in 1599624 Ontario Limited v. Lloyd’s Underwriters.
The marina attempted to make a claim against its insurance policy after a disgruntled ex-employee damaged one of the marina’s forklifts on the company premises.
Lloyd’s rejected the claim, noting an exclusion in its policy that says: “You are not insured under this section 2 against loss or damage caused by any of the following EXCLUDED CAUSES: theft, malicious damage or any attempted theft of or attempted malicious damage to property unless such property is contained in a securely locked building or compound”
“In our view, the exclusion clause is ambiguous in at least three respects,” the court ruled. “First, the term ‘property’ is not defined in the exclusion or anywhere else in the policy.
“It is therefore unclear whether, for the purpose of the exclusion, ‘equipment’ in the nature of the forklift was intended to come within the scope of the term ‘property.'”
Also, the court noted, the policy didn’t make clear when the property had to be locked up so as to trigger the exception to the exclusion.
Since the policy exclusion was ambiguous in these and other areas, the interpretation of it goes against the insurer, the court noted.