The CGL Policy and the Additional Insured Endorsement in Canada


Published March 2006

While there are a variety of liability insurance policies available in Canada which contain coverages tailored to specific risks, industries or professions, the most common form of coverage issued to the vast majority of business is the so-called “Commercial General Liability” (CGL) policy. Unlike, for example, automobile insurance, the wording of liability insurance in Canada is essentially unregulated. However, standard form wordings have been formulated over the years by industry organizations such as the Insurance Bureau of Canada (IBC) and, in the U.S.A., the Insurance Services Office (ISO).

Standard form wordings have changed quite considerably over the years. Insurance companies can, and invariably do, modify the wordings. In addition, brokers may draft their own “manuscript” forms, either generally or for specific clients or risks to which insurers may subscribe. The result can be, and often is, a confusing array of wordings where slight variations in syntax can have significant impact on the extent of coverage afforded to an insured in any given situation.

And so it comes as no surprise that the wordings of Additional Insured Endorsements (AIE) to liability policies, whether labeled “standard form” or otherwise, can vary greatly as therefore will the coverage afforded under the same. This paper will briefly review the coverage afforded by an AIE, the case law considering same, and some of the issues insureds, brokers and underwriters should consider when addressing the subject.

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