Insurance coverage

Truck insurance coverage defined by contract, not conversations, court says

An Ontario court has ruled that Clean Harbors Canada, one of North America’s largest hazardous waste haulers, will not have to cover fire damage to a truck owned and operated by one of its contractors, despite assumptions based on informal conversations about coverage.

Gergley Jakab’s 2007 Volvo was damaged in an electrical fire in July 2018 while being transported to Clean Harbors. And in October, the owner-operator retained the services of a lawyer to help recover the value of the truck and related losses from the company or its insurer, Chubb Insurance Company of Canada.

(Photo: istock)

Chubb denied coverage, noting that Clean Harbors’ insurance policy did not include “full or all risk” coverage. While Chubb was insuring the company’s liability losses, Clean Harbors was self-insured for physical damages to the first party.

Jakab told the court that after signing the contract, someone told him he was “fully covered” by the police.

The court found that this statement could have correctly meant that Jakab had the company’s liability coverage, which is required to drive on Ontario roads. But that didn’t mean the same as coverage for Jakab’s truck’s first-party fire casualties.

Jakab said someone from Clean Harbors should have told him before signing the contract, but the court pointed to a clause that said, “Clean Harbors will place all insurance except for trailer liability coverage. not held, available to the contractor for the purpose of insuring the material and the contractor under insurance policies obtained and maintained by Clean Harbors.

“Clean Harbors makes no representations or warranties as to the extent or adequacy of the insurance coverage it makes available and assumes no liability for the adequacy of such insurance. The contractor will be solely responsible for ensuring the adequacy of the cover offered by this insurance,” the contract adds.

In other words, the court found that Jakab was responsible for ensuring he was covered for first-party damage to his truck, which was worth about $30,000 at the time of the fire.

Even if Clean Harbors had indicated in casual conversation that “fully insured” did not refer to fire damage to the truck, it would not affect the contract. The Clean Harbors insurance policy contained the following “full contract” clause:

“This Agreement, including the attached Schedules, constitutes the entire agreement between the parties and supersedes all prior written or oral agreements between the Contractor and Clean Harbors; however, it may be modified or amended from time to time provided such modifications are agreed in writing between Clean Harbors and the Contractor. »

Once the contract was signed, both parties were bound by the text. Informal conversations about “fully covered” meant nothing unless both parties agreed in writing to include the definitions and understandings in an addendum to the contract.

  • With files from Canadian Underwriter