An Ontario court recently refused an insurer’s attempt to rely on evidence about its insured’s prior conduct. The insurer tried to suggest that a prior loss and misrepresentations on a mortgage application suggested a propensity towards arson or fraud. The judge’s decision demonstrates the heavy burden on an insurer seeking to rely on an arson defence to a fire loss claim.
The case in Azami v. TD Home and Auto Insurance arose out of a fire in September 2012 that destroyed the plaintiff’s home. Following the fire, the plaintiff made a claim with the defendant insurer under his homeowner’s insurance policy for the loss of his home, its contents and living expenses. During a pre-trial motion, the plaintiff moved to exclude certain evidence relating to two matters of pre-loss conduct.
Ontario judge allows insured to amend claim to include additional policies and new heads of damages after expiry of limitation period
An Ontario judge recently permitted an insured to amend its claim after the limitation period had expired, to plead additional insurance policies that applied to the same claim and new heads of damages. The judge’s decision is a sensible one. It protects insureds from having to claim aggravated and punitive damages or a breach of the insurer’s duty of good faith before the evidence underlying those claims is typically available.
A recent decision by the Court of Appeal is a cautionary tale, for both insurers and counsel they appoint to defend a policyholder. The Court of Appeal's recent decision in Reeb v. The Guarantee Company of North America is an application of the test for reasonable apprehension of a conflict of interest in the context of insurer appointed defence counsel. It demonstrates what can happen where instructions given to defence counsel by an insurer conflict with the best interests of the insured.
Motion To Appoint Independent Defence Counsel Creates Confusion Over Insured’s Right To Full Indemnity Costs
In a potentially controversial ruling, an Ontario judge recently refused to grant two insured applicants full indemnity for costs on a motion related to the duty to defend. This decision is likely to create some confusion regarding an insured's entitlement to full indemnity costs in duty to defend proceedings. Appellate authority has long established that when an insured applies to the court to enforce an insurer's duty to defend, that insured is entitled to full indemnification for both the costs of the defence and the costs of the insured to litigate with the insurer over entitlement to the defence. However, in Lefeuvre v. Boekee, the court may have deviated from this general principle.
The Court of Queen's Bench of Alberta recently released what appears to be Canada's first coverage decision dealing with "social engineering fraud", which involves fraudsters deceiving an organization's employees to gain access to confidential information and funds. In The Brick Warehouse LP v. Chubb Insurance Company of Canada, the Court held that a loss arising from social engineering fraud, did not meet the requirements for coverage under a commercial crime policy. This decision illustrates a significant gap in coverage under a crime policy for these types of cyber risks.
A recent decision by the Ontario Licence Appeal Tribunal reminds us of the potential coverage issues surrounding off-road vehicles, such as all-terrain vehicles, commonly referred to as ATVs. The applicant was injured in an ATV incident on July 11, 2015, while a guest at a property in rural Ontario. He attended the property as a guest of Family A. Family A had recently purchased the property from Family B. The applicant suffered significant injuries and applied for accident benefits, under his father's insurance policy with Aviva Canada Inc. under the Statutory Accident Benefit Schedule — Effective September 1, 2010 (the "Schedule").
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.
The recent costs endorsement in Hoang v. The Personal Insurance Co. provides policyholders with a succinct reminder of the general rule that a policyholder is entitled to full indemnity costs where an insurer wrongfully denies its obligation to provide coverage.
In Coachman Insurance Co. v. Kraft, a recent decision of the Ontario Superior Court, the Court found that “use” of a “motorized vehicle” in a homeowner’s policy exclusion includes the conduct of a passenger on an ATV. Even as a passenger, one may exercise “some form of control over” a motor vehicle, sufficient to come within the definition of the term “use”.
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.