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 casual conversations about the coverage. Gergley Jakab's 2007 Volvo was damaged in a July 2018 electrical fire while hauling for Clean Harbors. And that October, the owner-operator retained a lawyer to help recover the truck's value and related losses from the business or its insurer, Chubb Insurance Company of Canada.(Photo: istock)
Chubb denied coverage, noting Clean Harbors' insurance policy didn't include "comprehensive or all-perils" coverage.
While Chubb insured the company's third-party liability losses, Clean Harbors was self insured for first-party physical damage. Jakab told the court that, after signing the contract, someone had told him he was "fully covered" under the policy. The court found that statement could have correctly meant Jakab had the company's third-party liability coverage, which is required to drive on Ontario roads.
But this didn't mean the same thing as coverage for first-party fire losses to Jakab's truck. Jakab said someone at Clean Harbors should have told him this before he signed the contract, but the court pointed to a clause stating: "Clean Harbors will make all insurance, except non-owned trailer legal liability coverage, available to the contractor for the purpose of insuring the equipment and the contractor under policies of insurance obtained and maintained by Clean Harbors. "Clean Harbors makes no representation or warranty with respect to the extent or adequacy of the insurance coverage made available by it and assumes no responsibility for the adequacy of such insurance.
The contractor shall be solely responsible to satisfy himself as to the adequacy of the coverage afforded by such insurance," the contract added. It other words, the court found Jakab was responsible for ensuring he was covered for first-party damage to his truck, worth about £30,000 at the time of the fire. Even if Clean Harbors had indicated in a casual conversation that "fully insured" didn't refer to first-party fire damage to the truck, this wouldn't affect the contract.
The Clean Harbors insurance policy contained the following "entire contract" clause: "This contract, including the schedules attached hereto, form the entire contract between the parties and cancels and supersedes any and all previous written or oral contracts between the contractor and Clean Harbors; however, it may be modified or amended from time to time provided such changes are agreed to in writing between Clean Harbors and the contractor." Once the contract was signed, both parties were bound to the text.
Casual conversations about "fully covered" did not mean anything unless both parties agreed in writing to include the definitions and understandings in a contract amendment.
- With files from Canadian Underwriter