The Ontario Court of Appeal has ruled in Truscott v Co-operators General Insurance Company, 2023 ONCA 267, that the appraisal process under Ontario’s Insurance Act may be iterative. Where the parties limit the appraisal, the award that results need not decide the entire valuation dispute between the parties.
In Gill v The Wawanesa Mutual Insurance Company, the British Columbia Court of Appeal was tasked with determining what parts of a home are “within the dwelling” when interpreting coverage provisions in a homeowner’s insurance policy. In overturning the decision below, the Court found that the trial judge appeared to interpret the policy from the perspective of an average person that was “erroneously disconnected from the language of the policy.” It held that, in interpreting the ordinary meaning of policy language, the Court must consider the policy from the perspective of an average person purchasing insurance.
In 4268113 Canada Ltd. v. King et al., a Manitoba judge found an insurance brokerage and two employees liable in negligence for failing to obtain replacement cost insurance on an apartment building, as requested by the insured. The brokers’ submission to the insurer did not clearly request such coverage. The brokers failed to review the policy documents issued, which only covered the actual cash value of the property (“ACV”). After a fire, the insurer only paid the ACV of the damaged property. The brokers had to pay the plaintiffs the difference between ACV and replacement cost (i.e., the cost to repair the damage).
Abbas v Esurance Insurance Company of Canada establishes a bright-line rule under section 554(1) of the Alberta Insurance Act. The Alberta Court of Appeal found that to deter insureds from making willfully false statements in support of a claim, the giving of a fraudulent statement in respect of one claim bars the insured from recovering for any other claim arising out of the same underlying event. The insured, Mr. Abbas, forfeited both his claims arising from the same event and insurance policy, when he willfully made false statements in support of one of the claims. The court noted that although its ruling might seem draconian, taking a strong stand on this issue was necessary to deter fraudulent claims and to ensure respect for the duties of good faith an insurer and insured owe each other.
In Sir Corp v. Aviva, an Ontario judge dismissed an application by a restaurateur for a declaration of coverage for business interruption losses. The losses resulted from orders made in March 2020, following the outbreak of Covid-19 across Ontario. This is the first decision our office is aware of addressing the merits of a Covid-19 business interruption claim. Aviva’s policy contained language very different from other Aviva business interruption policies that are the subject of Covid-19 claims. Therefore, although Aviva succeeded in this case, it may not be victorious in other claims.
In AIG Insurance Company of Canada v. Lloyd’s Underwriters, the Court of Appeal for Ontario considered to what extent extrinsic evidence could inform a duty to defend analysis. The Court rejected the appellant insurer’s argument that it was not obligated to equitably contribute to the defence of a mutual insured. The appellant insurer submitted that the alleged progressive property damage in the underlying action did not result in an “occurrence” during the policy period, or if it constituted an “occurrence”, the “Expected or Intended Injury” exclusion applied in the circumstances.
The Court found that the appellant insurer’s argument relied upon “premature” evidence. It held that using such evidence is impermissible in a duty to defend application because it would require the application judge to make findings before trial that would affect the underlying litigation.
In KBK No. 11 Ventures Ltd. v. XL Insurance Company Ltd., the BC Supreme Court ruled for the insureds in a petition brought after their insurer, XL Insurance Company refused to defend an action alleging negligent construction of a tower . The judge rejected XL’s arguments that would have either permitted it to disclaim or severely limit the scope of its defence obligation. XL was ordered to fully defend its insureds.
In GFL Infrastructure Group Inc. v. Temple Insurance Company, the Ontario Court of Appeal (ONCA) ruled for the insureds on an application brought after two insurers (the “Insurers”) refused to defend an action alleging negligent construction of a condominium building. The Court rejected the Insurers’ argument that damages and defence costs associated solely with excluded claims could be distinguished from potentially covered damages and costs. These issues could not be addressed until after the underlying action was tried. The insurers had to provide a full defence.
Jeffrey Brown and Dylan Cox from our office acted for the insureds who took the lead on this appeal and the underlying application.
In 202135 Ontario Inc. v. Northbridge General Insurance Corporation, the Ontario Court of Appeal (ONCA) ruled for the insured on an issue raised by its claim for business interruption losses caused by the Covid-19 pandemic. To our knowledge, this is the first decision by any Canadian appellate court dealing with these kinds of claims. However, it does not shed any light on the principles a court might apply to determine when Covid-19 is a covered event, because the insurer did not dispute that point. The sole issue was whether the limit of liability applied per location or to all locations.
Last year we reported on Northbridge General Insurance Corp v Ashcroft Homes-Capital Hall Inc, in which Justice Perell gave a primer on insurance appraisals in Ontario. In a recent decision, the Ontario Court of Appeal has confirmed the lessons from that case.