Insurers refusing to provide coverage in CHL abuse lawsuit, court documents say

Insurance companies are threatening to withhold coverage from Hockey Canada and the Canadian Hockey League and its three major junior leagues and teams as they battle a high-stakes hazing, bullying, and abuse lawsuit, court documents say.

Hockey Canada filed a lawsuit in Ontario Superior Court in Milton, Ont., on June 9 alleging AIG Insurance Company of Canada and TIG Insurance Company have indicated they may not honour their policy obligations in connection with the lawsuit.

Hockey Canada, which argues that its insurance companies should help pay to defend the lawsuit as well as any costs related to judgments and settlements, filed a similar claim in a Toronto court on Aug. 11 against Lloyd’s of London, which runs an insurance market of syndicate members that includes AIG and Allianz Global Risk US Insurance Company.

If the insurance companies successfully argue that they should not have to cover costs and potential damages related to the lawsuit, it’s unclear how the CHL and its teams would come up with the funds.

Spokespeople for Lloyd’s, TIG and Allianz did not respond to requests for comment. An AIG spokesperson declined to comment. Hockey Canada’s allegations have not been proven and the insurance companies have not filed statements of defence.

According to documents in the lawsuit filed in Milton, TIG began selling insurance coverage to Hockey Canada’s predecessor, the Canadian Amateur Hockey Association, in 1995. Hockey Canada began buying coverage from AIG in 1996.

“Hockey Canada pleads that, to the extent the defendants fail to comply with their obligations under the policies, they are liable in damages for breach of contract,” Hockey Canada wrote in its claim.

Hockey Canada’s August filing in a Toronto court offered details about its more recent coverage.

The court filing says that between September 2015 and September 2020, Hockey Canada and its leagues, teams and participants were insured under an AIG policy that included an endorsement titled “Sexual Misconduct Liability Endorsement” that provided up to $20 million worth of coverage for claims of sexual misconduct. Sexual misconduct is defined in the policy to include both sexual and physical misconduct.

The lawsuit says the coverage is to be offered if claims are made during the policy period, and if the claimant has not lodged a complaint or started a lawsuit related to the alleged abuse before the “retroactive date” of Dec. 31, 1998. If abuse is alleged to have occurred prior to that date, it would not preclude coverage.

In addition to the AIG policy, Hockey Canada, the CHL, its leagues and participants were also insured under two other policies – a $25 million policy issued by Lloyd’s, and a $25 million policy issued by Allianz. The Lloyd’s policy lists a retroactive date of Sept. 1, 2014.

“Lloyd’s has taken the position that the AIG policy precludes coverage for alleged abuse occurring before the AIG retroactive date of Dec. 31, 1998,” Hockey Canada’s lawyers wrote in the Toronto claim. “Lloyd’s has also advised that it will not cover claims of any class members whose abuse is alleged to have occurred prior to Sept. 1, 2014.”

Attorneys for the plaintiffs and defendants in the CHL lawsuit are scheduled to return to court on Tuesday to discuss how to move forward with a path to justice for current and former players who want to join the case.

On Feb. 3, Justice Paul Perell declined to certify the lawsuit as a class action. However, he wrote in his decision that he’s convinced abuse in junior hockey is widespread and has been for decades, and applauded the bravery of former CHL players, including Dan Carcillo, Garrett Taylor, and Stephen Quirk, for sharing their stories.

Carcillo and Taylor filed a claim against the CHL in June 2020, alleging that the league, its teams, and their executives “perpetuated a toxic environment which condones violent, discriminatory, racist, sexualized, and homophobic conduct, including physical and sexual assault, on the underage players that they are obliged to protect.”

In subsequent months, 16 former CHL players filed affidavits detailing their alleged abuse. The oldest player to file an affidavit detailing abuse was 57-year-old Doug Smith, who played for the Ottawa 67’s in the Ontario Hockey League between 1979 and 1982. The youngest player was 27 and played in the OHL between 2009 and 2014.

It's unclear how many players will make a claim as the case moves forward. The plaintiffs have asked Perell to allow any CHL player since 1975 to join the litigation. Some 15,000 players have skated in the three leagues since then.