As stated in Article 1457 of the Civil Code of Québec, every person has a duty not to harm others. As a co-owner, you must be careful and respect the appropriate rules of conduct to the context and circumstances. Otherwise, you engage your civil liability and are required to make financial reparation to third parties for moral or property damage and personal injury. Civil liability insurance protects you against your own damaging act or omission. This insurance covers many situations:
It covers your civil liability for damages occurring in your home, such as if your tenant (or other occupants) suffer bodily injury caused by a defective electrical appliance.
2-The property under your custody
It also protects you against damages caused to neighbours or third parties by the property under your custody. You should know that any person is bound to make reparation for the prejudice that his property has caused to a third party under the provisions of article 1465 of the Civil Code of Québec.
For example, if the hot water tank in your private portion leaks, you may be held responsible for the damages to the movable property of your neighbours or their improvements.
Furthermore, if you lease your apartment, you should subscribe civil liability insurance to protect yourself from the risks of the tenancy. To this end, many declarations of co-ownership provide that the co-owners are jointly and severally responsible for the damages caused by their tenant.
As an owner- landlord, it is in your best interest to require that your tenant subscribes civil liability insurance. To justify your requirement, you should explain that if he is responsible for a loss, this insurance will protect him against the claims of the co-owners and of the syndicate or even from the insurers who have paid out indemnities to their insured.
4 The insurance deductible of the syndicate
Civil liability insurance covers damages caused by the occupants of your private portion or by yourself to the common or private portions. This coverage includes the losses which are not covered by the insurer of the syndicate, such as the deductible of the building insurance of the co-ownership. For example, if the deductible is $50 000 and the damages $75 000, the insurer will pay only an indemnity of $25,000.
In this case the syndicate is entitled to claim the amount of the damages for which he has not been indemnified ($50,000) from the co-owner at fault, who will in turn be reimbursed by its civil liability insurance, if any. This insurance is therefore crucial and it is foolhardy to be without it. In fact, this coverage will protect a co-owner from having to pay, out of his own funds, damages of many thousands of dollars.
Is there an obligation to subscribe insurance?
Contrary to the syndicate, the co-owners are not compelled by Law to subscribe civil liability insurance. Nevertheless, most declarations of co-ownership require the co-owners to subscribe and maintain civil liability insurance, irrespective of the fact that they are occupants or landlords. Furthermore, they must also supply evidence that this insurance is in force – each time they renew their insurance policy or change their insurer – by supplying an insurance certificate to the Board of Directors.
What does civil liability insurance cover?
Generally part and parcel of a standard residential insurance policy, civil liability insurance provides for the payment of indemnities following a loss caused by your fault. These indemnities are paid out to the victims (co-owners or other occupants of the immovable), to indemnify them for their bodily injuries or damages to their property.
Amount of the coverage
It is possible that the declaration of co-ownership imposes to each co-owner a minimal amount of coverage, even though this limit is sometime obsolete, when the declaration of co-ownership is not recent. Depending on the protection chosen, residential insurance policies provide for coverage of one or two million dollars.
WHAT YOU SHOULD KNOW! Under the terms and conditions of a civil liability insurance policy, the insurer usually has the obligation to assume your defence, under certain conditions, when a civil liability lawsuit is instigated against you. This coverage pays the lawyers’ fees and other legal costs.
WHAT TO KEEP IN MIND: Every co-owner should be insured for the risks inherent to his civil liability, irrespective of being an occupant or not. This insurance offers protection from third parties (for example: the neighbours) and from the co-ownership, from any claim not covered by the insurance of the syndicate, and more particularly the deductible.
WARNING! Failing subscribing civil liability insurance, you will stand alone against civil liability claims. It is therefore in your best interest and in the best interest of your syndicate to subscribe this insurance.
CONSULT THE PUBLICATION: Condo Insurance: Everything you should know at pages 96 and following.