Hot Water Tank Failures
Does your company have a hot water tank program? MEARIE previously issued a bulletin on this topic discussing how you, as owner of the tanks, are responsible for any damage resulting from a failure. There has been a recent appeals court case illustrating this point. On December
7, 2011 the Ontario Divisional court released a decision on two appeals involving Reliance Home Comfort and leased hot water tanks.
The case sited involved two appeals that both described property damage caused by the failure of leased hot water tanks. In each case the hot water tank, located in the homeowner’s basement, developed a leak which resulted in damage to the home and contents. In one case the hot water heater was 10 years old; in the other case, 19 years. The defendant argued that, due
to the age of the leases, the warranty no longer could apply, but in both cases the appeals were denied. The court decision ruled that “a lessor... has an obligation to supply a safe and properly functioning product in each and every lease payment period, and will be liable for loss or damage resulting from a breach of that obligation, regardless of how far into the lease term that might occur. The decision stands for the proposition that, unless the contract provides otherwise (and is capable of so providing), those implied warranties will be effective throughout the term of the lease, regardless of how long a time has passed since the start of the lease, and not just during some relatively short period of time after that start date.”1
This case serves to illustrate how the owner of leased hot water tanks is always responsible to the leaseholder, regardless of the age or condition of the tank in question. If you provide hot water tank rentals, review you Policies and Procedures related to hot water tank rentals to see if you may reduce your exposure. For details on this specific ruling, click here: http://www.mccagueborlack.com/emails/articles/reliance.html
Update on the MEARIE Privacy, Cyber and Network Security Endorsement
The response to the introduction of the new Privacy, Cyber and Network Security Endorsement has been tremendous. The majority of Subscribers who have submitted their renewal documentation thus far have accepted this endorsement as part of their Liability Insurance Renewal. MEARIE is very pleased with the support of this insurance product. More risk management support will be delivered in 2012 to help you manage privacy risk.
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The MEARIE Group’s Reciprocal News is an electronic publication intended for Subscribers of The MEARIE Group’s Insurance programs. It is published on a periodic basis and is intended for information purposes only. In the event of specific claims, incidents or legal actions against the Subscriber, coverage will be determined by MEARIE policy interpretation.
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