What is the test for using the word "discrimination" in an insurance policy?
British Columbia, Canada
The following excerpt is from Vancouver Gen. Hosp. v. Scottish & York Ins. Co., 1988 CanLII 3228 (BC CA):
What I had in mind was this: Words in a contract - and an insurance policy is a contract - are to be construed according to the circumstances known to the parties at the time of making and the object which they had in view: see Prenn v. Simmonds, [1971] 1 W.L.R. 1381, [1971] 3 All E.R. 237 at 239 (H.L.), per Lord Wilberforce. Thus, if an insurer today were to issue a policy covering the risk of damages from "discrimination", it might well be argued that, as it is now known that actions for damages for breach of s. 15 may lie, the word should be taken as including such a claim. But if the insurer and the insured had had a continuing relationship for a number of years in which the policy in force before the new cause of action was created used the word "discrimination", it might be argued that the present policy covers the same risks as the old policies and not the new risk created by the Charter. What is at stake is what risks were contemplated by the contract.
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