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Case Summary: Economical Mutual Insurance Company v Gill
Defence + Indemnity

B. Where a claim is advanced against a parent in negligence for injury suffered by his child, the family member exclusion clause in the parent’s homeowner’s policy was held to exclude coverage for the parent.  

Economical Mutual Insurance Company v Gill, 2017 BCCA 351, per Frankel, J. [4250]
Gill took his son to a mall in Burnaby, British Columbia. It is alleged that while at the mall, Gill’s infant son sustained serious injuries by falling nearly 25 feet from an opening by an escalator.
Gill began proceedings against the owner of the mall as the litigation representative for his son. The Public Guardian and Trustee replaced Gill as the litigation guardian. Further defendants were added and each defendant issued a third party notice against Gill for contribution and indemnity on the basis he was negligent in supervising his son.
Gill reported the third party notices to his insurer, Economical, under a home owner’s insurance policy. Economical denied him coverage on the basis of the family member exclusion in Exclusion 2(a)(5) of the policy, which provided as follows:


a. PERSONAL LIABILITY:  There is no coverage in this Section for claims arising from:

5. Bodily Injury to the Insured or to any person residing in the Insured’s household other than a Residence Employee;

[Emphasis added by the Court.]

Gill issued a third party notice to Economical, which sought dismissal of the notice on a summary trial application. This was unsuccessful at trial as the Court found there to be ambiguous wording in the context of the whole of the policy.
Issue: Does the family member exclusion exclude coverage for Mr. Gill in relation to claims advanced against him in his son’s action?
II. HELD: Appeal allowed: third party claim against the insurer dismissed because of family member exclusion.

1. The Court held the applicable standard of review to be correctness because the case involves interpretation of a standard form contract which will have precedential value and no meaningful factual issues specific to the parties.
2. There was held to be no ambiguity – the policy excluded coverage for Gill.

a. An average person reading Exclusion 2(a)(5) would understand that bodily injury to a family member who resides in the household is not covered. Courts must be cautious not to find ambiguity when none exists.

3. That more words could have been used does not mean the clear wording here is ambiguous.

a. The trial judge found ambiguity because the words “indirectly or directly” were present in other sections of the policy.
b. The Court of Appeal found the use of the phrase “directly or indirectly” appropriate in the other sections but not the one in issue.

i. The “direct and indirect” sections concerned cause-based exclusions (like terrorism and mould) versus the person-based exclusion at issue.
ii. The absence of these words does not affect the interpretation of the family member exclusion.