Section 2 protects the insured against legal liability to others.
- Bodily injury and property damage liability: pays damages the insured is legally liable to pay for bodily injury or property damage caused by the use or operation of the automobile, up to the policy's combined liability limit.
- Duty to defend: the insurer must defend the insured at its own expense for any claim that could fall within coverage, even if the claim is groundless. Defence costs are typically in addition to the policy limit.
- Worldwide territory for owned automobiles is generally limited to Canada and the United States and U.S. territorial waters (typical OAP 1 territorial clause). Trips outside this territory require a travel-specific arrangement or a separate policy.
- The OPCF 44R, Family Protection Coverage endorsement extends coverage to fill the gap when an uninsured or under-insured at-fault driver injures the insured or their family. Without OPCF 44R, the insured's recovery against an under-insured at-fault driver may be limited to that driver's low liability limits.
OPCF 44R is widely recommended because the statutory uninsured-automobile coverage (Section 4) responds at lower limits and only in narrower circumstances. 44R "tops up" the insured's recovery to their own Section 2 limit.
Common mistake: treating uninsured automobile (Section 4) as sufficient protection against under-insured drivers. Section 4 alone is generally capped at the statutory minimums; OPCF 44R extends the top-up to the insured's full Section 2 limit.
⚠️ Trap: OPCF 44R is an endorsement (optional purchase). Brokers who fail to offer it have lost coverage to E&O claims after their client was hit by a minimum-limit driver. Document the offer and any client decline.
Recall: Distinguish uninsured automobile coverage from OPCF 44R. What is the typical territorial scope of OAP 1 Section 2?