An insurer has the right to appoint counsel of their choice to defend a claim brought against an insured, unless the insured has a reasonable apprehension that the appointed counsel has a conflict of interest

An application by an insured for an order permitting it to instruct counsel of its choosing at the expense of the insurer and for an order confirming that it had not forfeited coverage.

137328 Canada Inc. (c.o.b. Alliance Security Systems) v. Economical Mutual Insurance Co., [2011] O.J. No. 751, February 22, 2011, Ontario Superior Court of Justice, R.J. Smith J.

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When interpretating insurance contracts exclusion clauses will be interpreted narrowly and specific clauses will trump general clauses.

The Court granted an insureds' appeal from a judgment finding that damage suffered to their home was excluded under the policy of insurance.  When two clauses in an insurance contract are contradictory, the Court will apply the contra proferentem rule, the principle that exclusion clauses are to be interpreted narrowly, the primacy of a specific clause over a general clause, and the commercially reasonable expectations of the parties.

Buchanan v. Wawanesa Mutual Insurance Co., [2010] B.C.J., June 29, 2010, British Columbia Court of Appeal, M.V. Newbury, K.E. Neilson and H. Groberman JJ.A.

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A limitation period may not be postponned by ongoing settlement negotiations

The Court granted the insurer’s application for dismissal of the claim against it on the basis that the action was not brought within the time limitation set out in section 22(1) of the Insurance Act.  The insured was put on notice of the limitation date and he lost the ability to bring a claim when he sought to continue to negotiate his claim beyond the limitation date.

Treasures of the Nile Imports Ltd. v. Crawford Global Technical Services, [2010] B.C.J. No. 1319, British Columbia Supreme Court, June 30, 2010, B.M. Greyell J.

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A court may consider third party notices when determining whether a duty to defend an insured exists under a policy of insurance.

Successful application by an additional insured for a declaration that the insurer was required to defend the action and third-party claims against it.

Kelowna (City) v. AXA Pacific Insurance Co., [2010] B.C.J. No. 1287, June 1, 2010, British Columbia Supreme Court, C.A. Wedge J.

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An insured may be entitled to punitive damages from an insurer but not aggravated damages.

The insured brought a claim for aggravated and punitive damages on the basis of the insurer’s decision to terminate the insured’s benefits. The Court awarded punitive damages in the amount of $7,500.00, plus indemnification of part of the insured’s solicitor’s costs and disbursements, but declined to award aggravated damages as the mental distress suffered by the insured was not sufficient to warrant compensation.

Wilson v. Saskatchewan Government Insurance, [2010] S.J. No. 350, June 15, 2010, Saskatchewan Court of Queen's Bench, C.L. Dawson J.


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Morally blameworthy civil conduct proved on balance of probabilities

In this case, a homeowner ("Johnson") brought an action against his insurer ("AXA").

Following a fire at his house, AXA denied coverage for a fire loss because it alleged Johnson failed to disclose the presence of a massage parlor in his basement suite and, further, that Johnson himself had started the fire.

The court held that Johnson had made a material misrepresentation in the application for insurance and had committed arson with respect to the fire loss at issue, and upheld the denial of coverage.

In doing so, the court reaffirmed that morally blameworthy civil conduct, such as arson, need only be proved on a balance of probabilities.

Johnson v. AXA Pacific Insurance Co., [2011] B.C.J. No. 414, March 14, 2011, British Columbia Supreme Court, T.C. Armstrong J.

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An appendictomy may be covered by travel insurance despite pre-existing abdominal pain

An insured brought a claim against her travel insurer for medical expenses incurred while on vacation. Her claim was allowed.

Turpin v. Manufacturers Life Insurance Co. [2011] B.C.J. No. 1633, August 26, 2011, British Columbia Supreme Court, R.D. Wilson J.

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Is dancing at a nightclub within the scope of employment?

An articled student, Danicek, was injured when an associate lawyer from the same firm, Poole, fell on her on the dance floor of a nightclub.  Both had attended a firm dinner and then proceeded to the night club.  Poole sought a declaration that he was entitled to a defence and indemnity under the firm's insurance policy for an action brought by Danicek.  The court held that while the duty to defend was triggered by an allegation in the pleadings that Poole was acting within the scope of his employment, there was no duty to indemnify because it was established at trial that Poole was not, in fact, acting in furtherance of the firm's business.

Danicek v. Alexander Holburn Beaudin & Lang, [2011] B.C.J. No. 78, January 21, 2011, British Columbia Supreme Court, S.F. Kelleher J.

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A car rental company is a proper defendant in a claim involving an unidentified driver of one of their vehicles.

The defendant rental vehicle company was found to be the proper defendant in an action involving one of its vehicles driven by an unidentified motorist.

Perret v. John Doe [2011] B.C.J. No. 1646, August 30, 2011, British Columbia Supreme Court, N. Affleck J.

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