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 the dollar level where an excess or umbrella policy begins to pay — normally your underlying policy's limit, commonly $1 million or $2 million for Canadian households.
Attractive Nuisance
"Attractive nuisance" is American legal terminology — it isn't part of Canadian law. Canadian provinces handle child trespassers through occupiers' liability statutes instead, which impose a general duty of reasonable care rather than a distinct doctrine.
Care-First (Alberta)
Care-First is the name of Alberta's announced auto insurance reform, scheduled for January 2027. As of mid-2026 it has not taken effect — Alberta's full tort system still applies, and an at-fault driver can still be sued.
Clearance Letter (WSIB / WCB / WorkSafeBC)
A clearance letter confirms a contractor's workers-compensation account — WSIB in Ontario, WCB in most other provinces, WorkSafeBC in BC — is registered and in good standing. Request it before work starts, not after.
Contingency Fee
A contingency fee is a lawyer's payment taken as a percentage of the recovery — commonly 25% to 40% in Canadian personal injury cases — with nothing owed if the case loses. It's why suing costs an injured person nothing upfront.
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 is the feature that separates a true umbrella policy from plain excess insurance: it steps down to pay claims your underlying policies don't cover at all, above a self-insured retention.
Duty to Defend
The duty to defend is your insurer's obligation to hire and pay lawyers for you whenever a lawsuit alleges something the policy could cover — triggered by the allegations, not the outcome. It generally ends when your limit is paid out.
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 British Columbia's no-fault auto insurance system, effective May 1, 2021. It pays injury benefits regardless of fault and removed most lawsuits between BC drivers for in-province crashes — but it's an auto-only, in-province system.
Excess Liability
Excess liability insurance adds $1 million to $10 million of coverage on top of your home and auto limits. Most Canadian personal umbrella policies are actually excess policies.
Excess Limits Counsel
Excess limits counsel is an independent lawyer you retain personally — distinct from your insurer-appointed defence lawyer — to represent only your interest in the slice of a claim above your policy's liability limit.
Excess Limits Letter
An excess limits letter is the notice a Canadian insurer sends when it believes a claim against you may exceed your policy's liability limit — commonly $1 million — the point where your interests and your insurer's can start to diverge.
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 $1–$5 million of extra liability limit on top of your existing policies, on the same terms as those policies. Many Canadian personal umbrellas are follow-form at their core.
Garnishment
Garnishment is court-ordered seizure of your wages or bank accounts to pay a judgment — commonly 20–30% of net wages in Canada, and it can run for years.
General Damages
General damages compensate pain and suffering — and Canada caps them at roughly $450,000, a limit set by the Supreme Court in 1978. The big money in Canadian awards is elsewhere.
Global Limit
A global limit — also called a policy aggregate — is the total an insurer will pay across all claims in one policy period, not the amount available for any single claim, which is set separately by the per-occurrence liability limit.
Indemnity: The Rule That You Get Made Whole, Not Rich
Indemnity is the principle that insurance restores you to your financial position before a loss — no better, no worse. In liability claims, it stops exactly at your limit, commonly $1 million in Canada.
Joint and Several Liability
Joint and several liability lets a plaintiff collect 100% of a judgment from any one defendant, regardless of their share of fault — which is why the defendant with insurance and assets usually pays.
Judgment-Proof: What It Means and Why It Rarely Lasts
Judgment-proof means a defendant has no assets or income a court award can reach. But judgments in most provinces can be renewed — commonly every 10 years — so it's 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 start a lawsuit — commonly 2 years from discovery in most Canadian provinces, but claims by injured children can wait until adulthood.
Negligence: The Four Elements Behind Most Liability Claims
Negligence is a failure to take reasonable care that causes harm, proven through four elements: duty, breach, causation, and damages. It's the claim behind most Canadian liability lawsuits.
Noted in Default
Being noted in default is a formal court step recorded once a defendant's deadline to respond to a lawsuit fully expires without a defence filed. Deadlines differ by province, so confirm the date printed on your own claim rather than assuming a standard timeline.
Occupiers' Liability: Your Duty to Everyone on Your Property
Occupiers' liability is your legal duty to keep people on your property reasonably safe — a duty most provinces have written into statute. Serious claims can test the $1 million limit on most home policies.
Occurrence vs. Claims-Made
An occurrence policy covers incidents that happen during the policy period no matter when the claim arrives — even years later. A claims-made policy covers only claims made while it's in force. Canadian personal policies are almost always occurrence-based.
Personal Injury Coverage: Not What It Sounds Like
In insurance wording, personal injury doesn't mean bodily injury — it's a defined term for defamation, false arrest, and invasion of privacy. Umbrella policies, typically $200–$300 a year for the first $1 million, are where most Canadians get it.
PLPD (Public Liability and Property Damage)
PLPD stands for Public Liability and Property Damage — everyday prairie shorthand, especially in Alberta, for the basic mandatory third-party liability coverage on an auto policy, with a legal minimum commonly around $200,000.
Punitive Damages
Punitive damages punish outrageous conduct rather than compensate the victim. They're rarer and far smaller in Canada than in the US — and insurance often won't pay them.
Self-Insured Retention (SIR)
A self-insured retention is the amount — commonly $500 to $2,500 on Canadian personal umbrella policies — you pay yourself when the umbrella responds to a claim no underlying policy covers.
Social Host Liability
Social host liability is a party host's potential legal responsibility when a guest they served alcohol injures someone. Canada's Supreme Court declined to impose it on ordinary BYOB hosts in 2006 — but left the door open.
Special Damages
Special damages compensate measurable financial losses — care costs, lost income, out-of-pocket expenses. Unlike pain and suffering, they are uncapped in Canada, and they drive the largest awards.
Statement of Claim
A statement of claim is the document that formally starts a civil lawsuit in most Canadian common-law provinces, setting out what the plaintiff alleges and what they're seeking. Quebec's civil law system uses different terminology and procedure.
Strata Deductible
A strata deductible is the portion of a building insurance claim a BC strata corporation's insurer doesn't pay — chargeable back to the unit the damage originated from under the Strata Property Act, sometimes regardless of fault. Amounts vary enormously.
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 — which is how you get sued by a company even when the injured person never would. Your liability limit, commonly $1 million, is what stands in the way.
Third-Party Liability
Third-party liability coverage pays people you injure or whose property you damage — usually up to a $1 million limit on Canadian home and auto policies. It protects your assets, not your car or house.
Tort: The Law Lawsuits Run On
A tort is a civil wrong — the legal basis for suing over car crashes, slip-and-falls, dog bites, and defamation. Provinces differ sharply on how far tort rights reach: B.C. went largely no-fault for auto injuries in 2021.
Umbrella Policy
An umbrella policy adds $1 million to $10 million of personal liability coverage above your home and auto policies, typically for $200–$300 per 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, sometimes $2 million — your umbrella insurer requires you to carry and maintain. Let them slip and you pay the gap personally.
Unlisted Driver Protection (ICBC)
Unlisted Driver Protection is optional ICBC coverage in British Columbia that can respond when someone not listed on your policy drives your car — but it generally doesn't cover household members, so confirm current terms with ICBC.
Vicarious Liability
Vicarious liability makes you legally responsible for someone else's negligence — most importantly for Canadian vehicle owners, who in most provinces answer for anyone driving their car with consent.
Voluntary Medical Payments
Voluntary medical payments (often called Coverage F) is a small no-fault sub-limit on Canadian home policies — commonly a few thousand dollars per person — that pays a guest's medical costs after an injury on your property without an admission of liability.
Writ of Seizure and Sale
A writ of seizure and sale is the Ontario court instrument authorizing the sheriff to seize and sell a debtor's property to satisfy an unpaid judgment. Alberta uses a 'writ of enforcement,' and other provinces use their own differently named tools.
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