Mixed responses to bullying in home insurance policies

Home insurance can cover parents of alleged bullies who are sued by their victims, but policy wordings vary from insurer to insurer, a lawyer told claims professionals Tuesday.

Cyber bullying encompasses many activities, including defamation, promoting hatred against people and uploading intimate photos to the Internet, Miller Thomson partner Patricia Forte said during the 51st annual joint conference of the Ontario chapter of the Canadian Insurance Claims Managers Association and the Ontario chapter of the Canadian Independent Adjusters’ Association.

Children can sue and be sued. However, parents of alleged bullies are often also named as defendants when plaintiffs allege the parents failed to prevent their kids from bullying others.

Some statutes on the books specifically make parents liable while common law is evolving, Forte said. She noted some insurance products specifically cover cyber bullying while others have exclusions for intentional act, criminal acts and failure to act.

“If you write a homeowner policy or a [commercial general liability] policy, there is no standardization of these polices,” she noted, so it is not clear whether they will cover an adult sued for allegedly failing to prevent bullying.

Unifund Assurance Company had a “bomb-proof” exclusion when it went to court in Ontario. The case involved parents who were named in a lawsuit by a bullying victim. Unifund had an exclusion for “failure of any person insured by this policy to take steps to prevent sexual, physical, psychological or emotional abuse, molestation or harassment or corporal punishment.” A judge with the Ontario Superior Court of Justice originally ruled that Unifund had to defend the parents in the lawsuit, but that ruling was overturned by the Court of Appeal for Ontario, in Unifund Assurance Company v. D.E, released in June, 2015.

But is this really good news for brokers?

“There is that issue about what am I paying for?” Forte said if the Unifund verdict. “I am missing out on the bargain of my premium if you are saying you are insuring me for my negligence, but you are not insuring me for my negligence. Be careful about that.”

Some new laws were passed that impose liability on parents, driven in part by the suicides of Amanda Todd and Rehteah Parsons, victims of cyber bullying. For example, Nova Scotia passed the Cyber-safety Act, but that law was ruled unconstitutional by a Nova Scotia court in a ruling on a defamation lawsuit.

“With the proliferation of computers and the Internet and social media profiles …there is a corresponding increase in the risks associated with that technology and liability associated with the use of that technology,” Forte said. “The law in this area has taken a little while to catch up with these emerging liabilities.”