If your child destroys school property, your insurance policy may not cover it

A couple wanting having a child may bring up the pros and cons, the arguments for and against, the risks and the unknowables.  What will it mean for their financial needs and goals to add the significant costs of parenthood while reducing the family income?  What will it mean for their parents and grandparents to hold the next generation in their arms and watch them grow?  How will they respond if the child is born with a severe illness or disability?  Will the child care for them in their old age?

Everyone is someone’s child, whether you know them because of their successes or failures, their acheivements or improprieties.  The miracle and nightmare of parenthood is that you can do everything or nothing right, and your child can end up loving you or hating you, making you proud or causing immeasurable sorrow and shame, burning through your money or providing for your in your retirement.  You feel compelled to do everything you can (and there is a lot to do), but ultimately your actions are no more a determination of your child’s conduct as adults and young adults than your parents’ actions were or are a determination of your conduct today.

Kids are, in different ways at every stage of life, like bulls in a china shop.  The question for parents is whether they end up barging, head-down, through the aisles, or moving responsibly on to the next challenge.  For some parents, they think: at least I have insurance.

In the recent case of Durham District School Board v Grodesky (CanLII), a parent was told their insurance wouldn’t cut it when it came to their child’s misconduct.  Here are the facts:

  • In the spring of 2007, Colton James started a fire to the contents of his school’s plastic recycling bins that ultimately lead to damage to the school building. 
  • The school board sued Colton along with his father, Tood James, claiming that Todd failed to act in terms of providing/enforcing a curfew, supervising, disciplining and instilling in Colton a respect for private and public property.
  • Todd tried to get his insurer, ING, to defend the claim against him and to reimburse him for any related costs, but ING denied coverage on the basis of the “exclusion clause” in Todd’ policy.  This is the exclusion clause:

Exclusion Status Section II: We do not insure your claims arising from: (6) Bodily injury or property damage caused by any intentional or criminal act or failure to act by: (a) any person insured by this policy; or (b) any other person at the direction of any person insured by this policy.

In other words, even though Todd had comprehensive homeowner’s insurance that covered any personal liabilities connected to property damage anywhere in the world, his insurance company insisted this one fell outside the line.

The Ontario Superior Court of Justice agreed with the insurance company.  Here is how Justice Gunsolus summarized the law in this area (at least in Ontario):

Where an insured [e.g. Todd] seeks to enforce a duty to defend [e.g. in the lawsuit against his son and him], the onus is on the insured to show that the claim, if proven, falls within the scope of coverage provided by the policy.  Only when this threshold is met, does the onus shift to the insurer [e.g. ING] to show that the claim falls outside the coverage because of an applicable exclusion.  Where it is clear from the pleadings that the claim falls outside of the coverage of the policy, by reason of an exclusion clause, the duty to defend does not arise.

Translating from legalese, this is the idea: based on the language of the policy, Todd would need to first show that if he lost the lawsuit with the school board the resulting liabilities would be covered by the policy.  However, since in this case the lawsuit specifically claimed that Todd’s failure to act led to the property damage (and since that sort of conduct by Todd is outside the scope of the policy because of the exclusion clause), ING does not need to defend him. 

At the end of the day, the court may find that Todd did everything right as a parent in connection with his son’s misconduct, in which case ING would likely return to the fray.