Insurance defence cases often have far-reaching implications, setting precedents that shape the future of the industry. One such notable case is Live Nation v. Aviva, which recently unfolded in the Ontario Superior Court of Justice. This case revolves around a dispute between Live Nation, a renowned live entertainment company and its insurer, Aviva.
Live Nation is a global leader in the live entertainment industry, organizing large-scale concerts, festivals, and events. This case involves an incident where a concertgoer was allegedly injured by security personnel during a concert at Budweiser Stage in Toronto. Live Nation was the operator of the venue at the time of the incident and had contracted Northwest Protection Services LTD (NWP) to provide security services. NWP had a commercial general liability policy with Aviva and Live Nation was subsequently named as an additional insured.
Aviva argued that they were only responsible for 50 percent of Live Nation’s defence costs since it had a policy with Starr Indemnity and Liability Company. Aviva argued that Starr Indemnity ought to also provide coverage. Aviva further argued that the principle of equitable contribution should apply and as such, both policies should share the risk equally.
The Court ruled in favour of Live Nation by way of a trial and stated that Aviva was 100 percent responsible for Live Nation’s past and future defence costs, subject to Aviva’s right to apply to re-apportion those costs at the end of a trial or settlement. The Judge found that Starr’s policy was considered excess which means it would only apply once Aviva’s policy was exhausted. The court held that Aviva’s policy was not in excess over the other policy since Live Nation was named as an additional insured under the Aviva policy thereby protecting them against liability arising out of NWP’s conduct. The court states that NWP was the party with the most control over how it carried out its operations and whether it carried out its operations in a manner that reduces the risk of liability. Consequently, NWP would assume the risk and has a duty to protect Live Nation from the risks arising out of NWP’s operations just as NWP would protect itself from those risks by carrying a commercial general liability insurance.
Ultimately, the court found that adopting principles of equitable contribution in this situation would relieve Aviva of the contractual bargain it made with NWP and would not be consistent with the commercial concept underlying the inclusion of additional insureds in commercial general liability policies.
The Live Nation v. Aviva case carries significant implications for insurance defence cases in Ontario and potentially beyond. It reinforces the importance of precise policy wording in insurance contracts and highlights the need for insurance providers to clearly define and delineate the scope of coverage. The ruling suggests that if a policy does not explicitly exclude certain perils or causes of loss, insurers may be required to provide coverage, even if negligence is a contributing factor. Insurers must be mindful of their obligations under the policies they issue and the potential for disputes arising out of competing insurance coverage. Whereas insured parties must ensure that they are adequately protected against liability arising out of the operations of other parties with whom they contract.
Furthermore, the decision underlines the importance of factual evidence and documentation in insurance defence cases. Insured parties must present compelling evidence to demonstrate that their losses fall within the coverage outlined in the policy. Conversely, insurers must provide substantial proof to substantiate a denial of coverage.
Live Nation v. Aviva represents a significant insurance defence case that will undoubtedly shape the future interpretation and application of insurance policies in Ontario. The ruling emphasizes the principle of equitable contribution and the necessity for clear and precise policy wording. As the legal landscape continues to evolve, insurance providers and insured parties alike should remain vigilant in understanding and negotiating their insurance contracts to mitigate potential disputes and ensure adequate protection.
See Live Nation v. Aviva, 2023 ONSC 2284