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
You can read Tien Lung Taekwon-Do Club v Lloyd's
Underwriters, 2015 ABCA 46 in its entirety here.
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