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Expired liability insurance and allegations of past harassment

It may seem unnecessary for risk managers to keep papers on expired insurance policies around. However, Alberta risk managers may find these documents useful. If an allegation about harassment that occurred a long time ago emerges, having proof of liability coverage from that time could prove helpful.

Allegations of harassment can sometimes come out months, years or even decades after an incident occurred. Depending on the type of coverage an organization had at the time and the proof it has of holding such a policy, an insurance company may be required to pay for legal expenses related to a harassment lawsuit. In a 2006 decision by the Supreme Court of Canada, it was noted that if an organization had an occurrence-based policy with an occurrence-based extension, its insurance company could be required to cover such incidents.

Liability risk can be difficult for organizations to manage, especially when it comes to allegations of past misconduct. Besides keeping records of insurance policies and exploring coverage options, having a policy in place to respond to incidents is a good idea for organizations. Risk managers should also familiarize themselves with liability laws and statutes of limitations in Alberta.

Legal standards for insurance coverage, liability and the definitions of harassment can vary from province to province. As such, it is a good idea for people or organizations both sides of a harassment case to speak with a lawyer familiar with employment laws specific to Alberta. Those looking to take action against an insurance company with regard to liability can also find support from a legal professional.

Source: canadianunderwriter.ca, "Sexual harassment lawsuit? Why it pays for a risk manager to be a pack rat", Greg Meckbach, Feb. 13, 2018

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Ridout Barron
1827 14th Street SW
Calgary, AB T2T 3T1

Phone: 587-315-8454
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