Commercial LitigationInsurance

Ontario Court Provides “Appropriate” Relief Against Statutory Limitation For Insurance Claims

Ontario's two year limitation period often becomes a trap for unwary policy holders who suffer a property loss. It is not uncommon to see claims drag on through the adjusting process, with interim payments being made, only to have insurers deny some or all of the claim more than two years after the loss. When the insured sues, insurers then claim the action is statute barred — a position our courts have accepted in a number of cases. A recent decision by Justice Paul Perell provides the insured with some relief from this trap. In Nasr Hospitality Services Inc. v. Intact Insurance ("Nasr"),1 Justice Perell confirmed that even though your claim may arise on the date of loss, it is not necessarily fully "discovered" until a later date. He concluded that where an insurer began paying on a property loss, a coverage claim was not discoverable until the insurer communicated a clear repudiation of its obligation to indemnify the insured. Read More
Commercial LitigationInsurance

The Ontario Court Of Appeal Leaves Window Cleaners Out To Dry On Window Replacement Costs

The Ontario Court of Appeal's recent decision in G & P Procleaners and General Contractors Inc. v. Gore Mutual Insurance Co. ["Procleaners"]1 is an interesting example of the application of the "your work" exclusion, particularly since the Court rejected the approach to policy interpretation that the Newfoundland Court of Appeal gave to an exclusion with very similar wording. Read More
Commercial LitigationInsurance

Ontario Court Of Appeal: Reasonable Apprehension Of Conflict Forces Insurer To Relinquish Control Of Defence

The Ontario Court of Appeal has again confirmed that an insurer's contractual right to control a defence must yield to the interests of its insured where its coverage position creates a reasonable apprehension that defence counsel would be in a conflict of interest. In Hoang v. Vicentini, the Ontario Court of Appeal ordered an insurer to relinquish control over the defence of its insured and pay for the insured's independent counsel. The Court confirmed that if a fact affecting your coverage is disputed in the underlying litigation, a conflict of interest arises. Read More
Commercial LitigationInsurance

Judge Confirms Limited Use Of Extrinsic Evidence For Duty To Defend

An insurer's duty to defend an action against its insured is triggered by the mere possibility that a claim could be made under the insured's policy. Traditionally, a court's analysis of whether this duty is triggered is based solely on the pleadings. However, in some limited circumstances the courts have permitted a consideration of "non-controversial" evidence. A recent decision of the Ontario Superior Court provides a good illustration of when such extrinsic evidence is and is not appropriate. While higher authorities have opened the door to extrinsic evidence, the court stops short of permitting insurers to engage in adversarial fact-finding inquiries. Read More
Commercial LitigationInsurance

B.C. Court Of Appeal Finds Costs To Remedy Damage Caused By Defective Workmanship Is Not Excluded By Workmanship/Design Exclusion

The British Columbia Court of Appeal recently confirmed in Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Co. that a Workmanship/Design Exclusion does not exclude the costs to remedy damage caused by defective workmanship. The lower court decision was previously reported on in Covered. Acciona is the first case in Canada to consider the LEG 2/96, "Defects Exclusion" clause used in Course of Construction ("COC") policies in Canada. While the outcome of this appeal decision is definitely pro-insured, the lasting impact of this decision will depend on whether the court's reasoning is restricted to the unique facts of this case or applied more broadly to resulting damage claims generally. Read More
Commercial LitigationProduct Liability

Pure Economic Loss Claim Applies To Patent Defects That Are Not Imminently Dangerous

The Manitoba Court of Appeal has held that a defendants' motion for summary judgment should be dismissed, rejecting their argument that claims for pure economic loss for patent defects that are not imminently dangerous should not proceed to trial. This is yet another in a long line of cases interpreting the seminal Supreme Court of Canada decision in Winnipeg Condominium Corp. No. 36 v. Bird Construction Co., where the Court held a defendant liable for a dangerous defect even though there had been no damage to persons or property (i.e. a pure economic loss claim). Read More
Commercial LitigationProduct Liability

A Cautionary Tale: The Party That Imposes Specifications For Methods And Materials Is Responsible For Its Defects

The Ontario Court of Appeal has held that where a plaintiff has imposed the methods and materials that the defendant must use to complete a project, the defendant is absolved of responsibility if the project proves to be defective, as the risk has been allocated to the plaintiff. Although this decision is not a typical products case, the considerations are similar to those that a court reviews in a case involving the implied warranty of fitness under the provincial Sale of Goods acts. Read More
Commercial LitigationInsurance

Carefully Consider That Additional Insured Endorsement – It May Still Protect You!

The Ontario Superior Court of Justice recently held that an additional insured was covered by a policy, where there was no direct claim against the named insured, even though the coverage was limited to claims arising from the negligence of the named insured. The most common additional insured endorsements are generally speaking very restrictive in their application. As this case demonstrates, such an endorsement may still provide protection to an additional insured even where the plaintiff has no direct claim against the named insured. Read More
Commercial Litigation

Product Liability Risks And Market Globalization

Globalization of industry has resulted in materials and components often being supplied from multiple markets across the world. When something goes wrong, and claims arise, it can prove difficult to enforce your contractual rights to indemnity. What could go wrong? Unfortunately, lots. If your client, as the manufacturer or local distributor, has not taken effective steps to ensure that its product is manufactured properly, your client could find itself facing substantial fines from regulatory authorities along with class actions that can put a serious dent in your client's bottom line. Read More