In Realtrium Holdings Pickering Inc. v Simpson, the Ontario Superior Court of Justice considered whether an underwriter of a statutorily mandated insurance program was entitled to recover from its own insured for amounts it paid to third-party claimants.  This recent decision clarifies the boundaries insurers’ subrogation and assignment rights.

Realtrium arises from a fraudulent real estate scheme that resulted in brokerage clients losing their deposits. The Court held that the insurer was not permitted to exercise its subrogation and assignment rights to recover payments from its own insured for losses that the policy was intended to cover.

After a bridge collapsed in rural Ontario more than a half century after its construction, the ensuing litigation extended beyond questions of engineering and design. In His Majesty the King in Right of Ontario v Royal & Sun Alliance Insurance Company of Canada, the Ontario Superior Court of Justice adjudicated an issue relevant for insurers and policyholders alike: Did the insurers owe a duty to defend claims arising from damage spanning decades?

The decision provides insight into how courts will interpret pleadings and insurance policies, in determining whether insurers owe a duty to defend.

In a recent decisionof the Ontario Superior Court of Justice, the court was tasked with determining whether Fluid Hose Coupling Inc. was an insured entity under a Builders’ Risk Insurance Policy  issued by Allianz Global Risks US Insurance Company for a construction project. Fluid Hose was not referred to by name in the Policy. However, the Policy insured unnamed “subcontractors” who entered into derivative contracts to supply materials in connection with the project. The court found that this broad wording meant that Fluid Hose was a subcontractor as defined in the Policy and thus an insured entity. As a result, the court also held that a subrogated action brought by Allianz against Fluid Hose for losses allegedly caused by Fluid Hose’s negligence was barred.

In a recent decision of the Ontario Superior Court of Justice, the court interpreted a policy in which there was coverage for a “windstorm”. The policy excluded loss or damage resulting directly from “settling”. The term “windstorm” was not defined in the policy, so the court applied the ordinary dictionary definition of a “windstorm”. The parties each presented factual evidence relating to the cause of the loss. Ultimately, the court found that the plaintiff’s evidence was more thorough and persuasive and ruled that the cause of the loss was a “windstorm”, not “settling”.

In Puri Professional Corporation v. Lloyd’s Underwriters, an Ontario judge found that the underwriters of a professional liability policy had no duty to defend their insured in a lawsuit arising out of tax advice the insured gave to one of its clients. The lawsuit was excluded by virtue of the policy’s prior acts exclusions, which were put in place to ensure the Underwriters bore no liability for events occurring before they took over from the insured’s prior professional liability insurer. As discussed below, this case proves why it can be valuable for an insured to retain coverage counsel before moving to a different liability insurer, to try to avoid the coverage gap that occurred in this case.

With every passing year, the expenses plaintiffs incur to prosecute civil claims increase, such that the cost of litigation is now beyond most individuals and many small businesses. Even those who represent themselves must often incur significant expenses to bring their claims to trial, including costs for examination transcripts and independent expert witnesses often necessary to prove the claim. Moreover, if a claim is dismissed, a court will generally require the plaintiff to pay a portion of the defendant’s legal costs, which are often significant. Increasing litigation expenses and costs Judgments have led to legal expense insurance becoming more prevalent.

The Ontario Court of Appeal released a brief decision on February 3, 2025, that underscores an important principle of insurance law: plain and undefined words are to be understood by their ordinary meanings. That applies even if seemingly unintended consequences may result.

In Honeywell International Inc. v XL Insurance Company Ltd., the British Columbia Court of Appeal ( “BCCA”) overturned an application judge’s decision. The BCCA found in favour of an appellant manufacturer seeking a defence under a liability policy placed in relation to a construction project (commonly known as a “wrap up policy”). The BCCA found that the manufacturer qualified as an insured under the policy and directed a trial of several other coverage issues not yet decided.

In a recent decision, the British Columbia Court of Appeal (“BCCA”) interpreted a clause that excluded loss or damage caused directly or indirectly by “subsidence”. The court upheld the trial judge’s finding that the clause was unambiguously worded and clearly excluded coverage for the loss. In addition, the BCCA also agreed with the trial judge’s finding that the policy’s Extended Water Damage Endorsement did not extend coverage on the facts of the case.

In Truong v Jeweler’s Mutual Insurance Company, the Court of Appeal for Ontario upheld a trial judge’s decision, finding no reversible error in the judge’s decision that the insurer’s conduct amounted to bad faith and warranted an award of punitive damages.