Tien Lung Taekwon-Do Club v Lloyd's Underwriters, 2015 ABCA 46
Here, an insurer attempted to deny coverage to a business for an injury claim made by a student hurt at a martial arts club.
A club user was injured by an instructor during black belt training. The club user brought an action against the instructor and the martial arts club for his injuries.
The martial arts club had purchased liability insurance from Lloyd's Underwriters and put its insurer on notice. However, the insurer denied coverage to the club based on a standard exclusion clause for injuries sustained in combat sports, including "Martial Arts". The clause read as follows:
"Any Bodily Injury caused or contributed by any Insured to any participant and/or any Bodily Injury caused or contributed by any participant in a match or practice in regards to Category 4 Sports unless specified in the Declarations."
Despite the business being described on the declarations page of the general liability insurance policy as being a martial arts club, the insurer maintained its denial of coverage.
The club brought an action against its insurer.
The Chambers judge ruled that ambiguity in the policy favoured the insured, not the insurer. The insurer was ordered to defend the action, as to enforce the exclusion clause would lead to the 'absurd result' of denying the business liability coverage, despite the insurer knowing of this risk.
The insurer appealed.
On appeal, the Court agreed with the Chambers judge that the policy was ambiguous, and that the insurer was required to defend the action.
You can read Tien Lung Taekwon-Do Club v Lloyd's Underwriters, 2015 ABCA 46 in its entirety here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
