Municipal Insurance – Getting Your Money’s Worth

Insurance coverage disputes don’t just effect individuals, but also municipalities, their staff and elected officials.

Just as I dealt with forcing one insurer to comply with its obligations, another one comes in the door.  This time it involved a claim made against a particular municipality, and against one of its elected officials.

The insurer readily accepted its duty to defend the municipality, but decided to hang the elected official out to dry (or at least try).

I commenced the court proceeding, and without much further debate, the insurer immediately folded.


But what was going on?

My sense is that the insurer was banking on the municipality coming to the elected official’s defence.  It is common for municipalities to have by-laws in place to do so in appropriate circumstances.

In fact the lawyer for the insurer wondered allowed as to why the municipality was not defending the elected official.  When I told him the municipality did not have the necessary by-law, the proverbial light seemed to come on.

Shortly thereafter, lo’ and behold, the insurer comes to the table.

The lesson for the municipal client.  Even if there is the required by-law in place, don’t blindly take the insurer’s “no” as the final word.  The last I looked, municipalities, on behalf of their ratepayers pay a tidy sum for insurance coverage.  Make sure you get your monies worth.

John Barzo
205-60 Collier Street,
Barrie, Ontario, Canada
L4M 1G8

#: 705-733-6245

Leave a Comment

  • Linda Loftus at 12:42 pm

    Does the insurance cover staff for negligence or any other errors/ommissions?

    • John Barzo at 12:58 pm

      Absolutely. It is a “general liability” type policy. Of course, with all such policies, there are exceptions and exclusions. The interesting part is when a party commences a lawsuit that triggers coverage for some aspects of the policy, but falls within an exclusion in relation to other aspects of the claim. As a general rule, where there are both covered and uncovered claims, the insurer is usually bound to defend all claims.