Trucking insurance: Coverage determined by contract, not talks, court sees

Trucking insurance: Coverage determined by contract, not talks, court sees

A court in Ontario has ruled that Clean Harbors Canada, one of North America’s largest transporters of hazardous waste, will not have to cover fire damage to a truck owned and operated by a subcontractor. Contractors, despite assumptions based on informal conversations about coverage.

A 2007 Volvo Gergely Jakab was damaged in an electrical fire in July 2018 while transporting goods to clean ports. In October, the valet service hired an attorney to help recover the value of the truck and related losses from the company or its affiliate insurance company, Chubb Insurance Company of Canada.

(Photo: iStock)

Chubb declined to pay, stating that Clean Harbors’ insurance policy does not include “full or all-inclusive” coverage. While Chubb was insuring company liability losses, Clean Harbors was self-insured for first-party physical damages.

Mr. Jakab told the court that after signing the contract, someone told him it was “fully covered” by the document.

The court concluded that this statement could have correctly implied that Mr. Jakab has corporate liability coverage, which is mandatory for driving on Ontario roads. But that does not mean covering the damage caused by Mr. Jakab’s truck fire.

Mr. Jakab said someone at Clean Harbors should have told him this before he signed the contract, but the court noted a provision that “Clean Harbors will provide the contractor with all insurance, except for non-owned trailer liability coverage, for equipment and contractor insurance.” Under the insurance policies obtained and maintained by Clean Harbors“.

“Clean Harbors makes no representations or warranties as to the extent or adequacy of the insurance coverage it provides and assumes no responsibility for the adequacy of such insurance. The subcontractor will be solely responsible for ensuring the adequacy of coverage provided by this insurance,” we can read in the contract.

In other words, the court found that Mr. Jacob was responsible for ensuring that he covered first-party damages to his truck, which was worth about $30,000 at the time of the accident.

Even if Clean Harbors indicated in casual conversation that “fully insured” did not refer to fire damage to the truck, it wouldn’t affect the contract. The Clean Ports Insurance policy contained the following “full contract” clause:

“This Agreement, including any schedules attached to it, constitutes the entire agreement between the parties and supersedes and replaces all prior agreements, written or oral, between the Subcontractor and Clean Harbors; however, it may be changed or modified from time to time, subject to agreement on such changes in writing between Clean Harbors and the subcontractor.”

Once the contract was signed, both parties were bound by the text. Informal conversations about “full coverage” mean nothing unless both parties agree in writing to include definitions and agreements in the contract modification.

  • With files from the Association of Insurance Companies of Canada

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