Insurance-Indemnification of a Property Owner from Claims arising from a Negligent Contractor

Commercial and residential property owners commonly enter into service contracts with third-parties for services such as snow and ice removal from their premises. If a contract is properly drafted it will contain insurance and indemnification provisions intended to allocate responsibility to the contractor. For example, to carry liability insurance with specific terms and in minimum amounts with the owner named as an additional insured, and to indemnify and save harmless the owner for claims made by third-parties such as a “slip and fall” due to the act or omission of the contractor.

In August 2011, the Ontario Superior Court of Justice in Papapetrou v. 1054422 Ontario Limited dealt with a motion for summary judgment by a building owners against their contractor as a result of the owners and contractor being sued for injuries suffered by a woman when she fell on icy steps. The owners' motion sought the plaintiff’s action be dismissed against the owners, or in the alternative, for an order that the snow removal contractor assume the defense of the owners.

The contract with the snow removal contractor provided for the contractor to:

A.  maintain a commercial general liability insurance policy with minimum limits of $2,000,000;

B.  name the Owners as additional insureds under the policy;

C.  assume sole responsibility for its work, take all reasonable and necessary precautions to protect persons and property from injury or damage and to indemnify and save harmless the Owners against all claims etc. incidental to or arising out of the performance or non-performance of the contract by the contractor.