Glossary
The words your policy and your lawyer use, defined in plain Canadian English.
44 pages
Attachment Point: Where Your Umbrella Starts Paying
The attachment point is where an excess or umbrella policy starts paying — normally your underlying limit, commonly $1 million or $2 million in Canada.
Attractive Nuisance
"Attractive nuisance" is a US term, not Canadian law. Canada covers child trespassers via provincial occupiers' liability statutes and a general duty of care.
Care-First (Alberta)
Care-First is Alberta's auto reform, effective January 2027. As of mid-2026 it hasn't started — full tort still applies and drivers can be sued.
Clearance Letter (WSIB / WCB / WorkSafeBC)
A clearance letter confirms a contractor's workers-comp account (WSIB, WCB, or WorkSafeBC) is registered and paid up. Request it before work starts, not after.
Contingency Fee
A contingency fee is a lawyer's cut of the recovery — often 25-40% in Canadian injury cases, varying by province and firm — owed only if the case wins.
Declarations Page
The declarations page is the one- or two-page summary at the front of your policy — and the fastest place to find your actual liability limit.
Drop-Down Coverage
Drop-down coverage lets an umbrella pay claims your underlying policies exclude, above a self-insured retention — what separates a true umbrella from excess.
Duty to Defend
The duty to defend is your insurer's duty to pay lawyers whenever a claim's allegations could fall within coverage — triggered by the claim, not the outcome.
Endorsement
An endorsement is a written change to your insurance policy — the mechanism for adding back coverage the base policy excludes, often for $50–$200 a year.
Enhanced Care (BC)
Enhanced Care is BC's no-fault auto system, effective May 1, 2021. ICBC pays injury benefits regardless of fault and removed most driver lawsuits — auto-only.
Excess Liability
Excess liability insurance adds $1M-$10M of coverage on top of your home and auto limits. Most Canadian 'umbrella' policies are actually excess policies.
Excess Limits Counsel
Excess limits counsel is an independent lawyer you hire personally, apart from your insurer's defence lawyer, to protect your interest above your policy limit.
Excess Limits Letter
An excess limits letter is the notice an insurer sends when a claim may exceed your policy limit, commonly $1 million — a signal to consider your own lawyer.
Exclusion
A policy exclusion is something your insurance specifically won't cover — and personal liability policies commonly carry a dozen or more of them.
Follow-Form Excess: What Most 'Umbrella' Policies Really Are
A follow-form excess policy adds $1M-$5M of extra liability limit on the same terms as your existing policies — many Canadian 'umbrellas' work this way.
Garnishment
Garnishment is court-ordered seizure of wages or bank accounts to pay a judgment — 20% in Ontario, up to 30% in BC, and more in Alberta above $2,400/month.
General Damages
General damages compensate pain and suffering — capped at roughly $450,000 by a 1978 Supreme Court ruling. The real money in serious cases is elsewhere.
Global Limit
A global limit (policy aggregate) is the total an insurer pays across all claims in one term — not the amount for one claim, set by the per-occurrence limit.
Indemnity: The Rule That You Get Made Whole, Not Rich
Indemnity is the principle that insurance restores your financial position before a loss, no better, no worse — in liability claims, it stops at your limit.
Joint and Several Liability
Joint and several liability lets a plaintiff collect 100% of a judgment from one defendant, regardless of fault share — so the insured defendant usually pays.
Judgment-Proof: What It Means and Why It Rarely Lasts
Judgment-proof means a defendant has no reachable assets today. But judgments can be renewed for 10-20 years by province — a snapshot, not a shield.
Liability Limit
The maximum your insurer will pay for a claim against you — $1 million on most Canadian home and auto policies. Everything above it is yours to pay.
Limitation Period
A limitation period is the deadline to sue — commonly 2 years from discovery in most provinces. Claims by injured children can wait until adulthood.
Negligence: The Four Elements Behind Most Liability Claims
Negligence is careless conduct causing harm, proven through 4 elements: duty, breach, causation, and damages. It underlies most Canadian liability lawsuits.
Noted in Default
Noted in default is a court step recorded once a defendant's response deadline fully expires. Deadlines vary by province — confirm yours on the claim.
Occupiers' Liability: Your Duty to Everyone on Your Property
Occupiers' liability is your duty to keep visitors reasonably safe on property you control. Serious claims can exceed a typical $1 million home policy limit.
Occurrence vs. Claims-Made
An occurrence policy covers incidents from its own policy period, no matter when the claim arrives. Canadian personal policies are almost always this type.
Personal Injury Coverage: Not What It Sounds Like
In insurance wording, personal injury means defamation, false arrest, and privacy claims — not bodily injury. It's typically added via an umbrella policy.
PLPD (Public Liability and Property Damage)
PLPD (Public Liability and Property Damage) is prairie shorthand for mandatory auto liability coverage — Alberta's legal minimum is commonly $200,000.
Punitive Damages
Punitive damages punish outrageous conduct, not compensate the victim. Canada's landmark award was $1 million (Whiten v. Pilot, 2002) — rare, often uninsured.
Self-Insured Retention (SIR)
A self-insured retention is what you pay yourself — commonly $500 to $2,500 — before a Canadian personal umbrella policy responds to a direct claim.
Social Host Liability
Social host liability is a host's possible responsibility when a guest they served alcohol injures someone. The SCC declined to impose it broadly in 2006.
Special Damages
Special damages compensate measurable financial losses — care costs, lost income. Unlike Canada's ~$450,000 pain-and-suffering cap, they are uncapped.
Statement of Claim
A statement of claim is the document that formally starts a civil lawsuit in most Canadian provinces. Quebec instead uses an originating application.
Strata Deductible
A strata deductible is the part of a BC building claim the strata's insurer won't pay, chargeable to the unit at fault — commonly $100,000 to $250,000.
Subrogation: Why Your Friend's Insurer Can Sue You
Subrogation is an insurer's right to recover a paid claim from whoever caused the loss — how you can be sued even when the injured person never would.
Third-Party Liability
Third-party liability pays people you injure or whose property you damage — commonly up to $1 million on Canadian home and auto policies, not your own.
Tort: The Law Lawsuits Run On
A tort is a civil wrong giving the injured person a right to sue. Provinces differ sharply on tort rights: B.C. moved to a largely no-fault auto system in 2021.
Umbrella Policy
An umbrella policy adds $1 million to $10 million of liability coverage above your home and auto, commonly $200-$300 a year for the first $1 million.
Underlying Limits: The Fine Print That Keeps Your Umbrella Working
Underlying limits are the minimum base-policy limits — commonly $1 million — your umbrella insurer requires you to maintain. Let them lapse and you pay the gap.
Unlisted Driver Protection (ICBC)
Unlisted Driver Protection is optional ICBC coverage for an occasional non-household driver of your car. It generally doesn't cover household members.
Vicarious Liability
Vicarious liability makes you legally responsible for someone else's negligence — most notably, owners answering for anyone driving their car with consent.
Voluntary Medical Payments
Voluntary medical payments (Coverage F) is a small no-fault sub-limit — often a few thousand dollars per person — for a guest's injury, without admitting fault.
Writ of Seizure and Sale
A writ of seizure and sale lets an Ontario sheriff seize and sell a debtor's property for an unpaid judgment. Alberta's equivalent is a writ of enforcement.
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