Tighter wordings are now in place, simply offering coverage for defense costs only. The allegations in the Complaint will be that the employee was dismissed because of a discriminatory act on the part of the employer, i.e. because of age, disability, sexual orientation, or race. Allegations of harassment or humiliation are often made. These allegations fall square within the definition of Personal Injury, and therefore trigger not only an obligation to defend, but to indemnify. When an action and a complaint are started, it makes sense to appoint one defense counsel to repsond to both.
Difficulties arise, however, when deciding how a settlement is configured.
If it is a settlement under the tort action, the restricted wrongful dismissal endorsement wordings apply. If it is a settlement pursuant to the OHRC, then the insurer may be exposed to defense and indemnification. A clear communication with the insured regarding their coverage limitations is imperative right at the beginning. At the end of the day, however, a negotiated arrangement between the insurer and insured is probably best, as it is always in everyone's interest to resolve the outstanding claim. What every Landlord should know . . .