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Policy exclusion bars claim brought by child for personal injuries

Kayter v Personal Insurance Company, 2018 NSSC 79

When Tommy Kayter was three years old his mother accidentally injured him with a ride-on lawnmower, resulting in part of his foot being amputated. Shortly after the accident, Tommy’s father submitted a claim under his home insurance policy with the Personal Insurance Company.

The Personal Insurance Company denied the claim due to an exclusion within the homeowner’s policy. The policy states that it does not cover claims arising from bodily injury to any person residing in the household other than a “residence employee”. Further, the policy provided coverage only after the “legal liability” of a resident of the home was proved by way of a judgment ordered by the Court.

The Kaytors declined to commence a civil action on behalf of Tommy. Instead, they attempted a shortcut and filed a Motion seeking a declaration of coverage against the Personal.

In his reasons, Mr. Justice Campbell ruled that the Personal was not required to provide coverage to Tommy. The policy grants coverage to a claimant only after a judgment or legally enforceable liability is obtained against a resident of the home. The Personal was entitled to be involved in the civil claim, to appoint defence counsel, and to challenge any duty to indemnify the home owners arising from a civil claim.

Justice Campbell stated that if he were to order the insurer to pay Tommy’s claim without first seeking judgment, this “would have the effect of allowing the insured to settle a case for any amount, without the involvement of the insurance company, and [permit] the insured to demand payment up to policy limits.” This was not what was agreed upon within the insurance contract.

The court established that the exclusion clause had a clear and unambiguous meaning in the context of this claim. Therefore, the exclusion applied, and the claim was denied.

You can read Kayter v Personal Insurance Company, 2018 NSSC 79, in its entirety here.

At Foster & Company, we represent institutions and individuals looking for help understanding insurance coverages and responding to claims. Contact us by phone at 506-462-4000 or reach us online for advice.

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