Duty to defend an insured who allegedly caused a fire using booster cables to jump a forklift

A motor vehicle insurer had a duty to defend an insured who allegedly caused a fire after using booster cables to jump start a forklift during repairs.

Insurance law – Automobile insurance – Duty to defend – Use of vehicle – Pleadings

Definity Insurance Co. v. Intact Insurance Co., [2024] O.J. No. 2524, Ontario Superior Court of Justice, June 4, 2024, V.V. Christie J.

The insured was a commercial tenant in a multi-unit building. The insured was alleged to have started a fire after draining oil from a forklift and then using a pick-up truck to boost the forklift with battery cables. Three actions were started against the insured and others arising out of the fire. The allegations in all three actions were generally the same. The insured’s CGL insurer sought a declaration that the motor vehicle insurer owed a duty to defend the insured in all three actions. The motor vehicle insurer agreed it was obliged to pay half of past and future defence costs if there was a duty to defend.

The court concluded a duty to defend arose for several reasons. These included that although the insured was not a named insured under the motor vehicle policy, there was no question he was using the truck with consent. The pleadings were replete with allegations that using the truck to boost the forklift caused or contributed to the fire. Using the truck to boost another vehicle was unquestionably an ordinary and well-known activity to which motor vehicles were put, and there was an unbroken chain of causation between use of the truck and the fire.

This case was digested by Michael J. Robinson and edited by Steven W. Abramson of Harper Grey LLP.  If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected].