An Insurer has no Duty to Investigate Accuracy of Information Provided by Insured

The insurer had no duty to investigate the information provided by the insured to unearth misrepresentations by the insured.  A broker was held liable for failing to make inquiries into whether an insured’s representative who completed the insurance applications had the necessary training or experience to do so and if not to discuss the benefits of property inspections with him. The insured was apportioned 50% liability for failing to ensure that its representatives handling the placement of insurance had sufficient knowledge of the properties to place coverage.

Grafton Connor Property Inc. (c.o.b. Grafton-Connor Group) v. Lloyd’s of London Underwriters, [2015] N.S.J. No. 270, June 30, 2015, Nova Scotia Supreme Court, A.J. LeBlanc J.

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Horse Rider Training does not Fall within Scope of Farm Insurance Policy

Insured failed to inform the insurance broker of all equine activities he engaged in when he purchased the policy.  In particular, the insured failed to inform the broker that he may engage in the activity of providing horseback riding lessons, which was not found to be a "farm activity" under the policy. The Alberta Court of Appeal upheld the trial judge’s decision that the action as against the insurer was dismissed.

Burch v. Intact Insurance Co., [2015] A.J. No. 735, July 3, 2015, Alberta Court of Appeal, E.I. Picard, P.A . Rowbotham and B.K. O'Ferrall JJ.A.

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Insurance Broker was Negligent in Failing to Inform Insured of Gap In Coverage

An insured was advised by its broker that the broker had arranged for the excess insurer to provide umbrella insurance coverage for the insured's vehicles; however, the broker failed to advise there was a gap in excess coverage with respect to the insured's long-term leased vehicles. Following an accident involving one of the insured's long-term leased vehicles, the insured sought coverage from the excess insurer, but was denied. The insured successfully brought an action in negligence against the brokers for their failure to properly advise the insured with respect to the umbrella coverage obtained for the vehicles.

Dustbane Products Limited v. Gifford Associates Insurance Brokers Inc., [2015] O.J. No. 854, February 18, 2015, Ontario Superior Court of Justice, M.L. Edwards J.

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The insured’s application for long-term disability benefits was denied by the adjuster for five months after the time of her claim. The insured alleges that in denying her claim, the adjuster and the insurer did not act in good faith. The Court refused to summarily dismiss the insured’s claim against the insurer and adjuster for breach of contract and the duty of fairness and good faith; however, the insured’s claims against the adjuster for inducement of breach of contract and interference with contractual relations were dismissed.

Frank v. Kalokina, [2014] B.C.J. No. 2496, September 17, 2014, British Columbia Supreme Court, R.A.M. Baird J.

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At appeal, the court upheld the trial judge’s decision that a tenant’s insertion of cardboard into furnace controls which caused the furnace to run continually until failure, did not fall within the mechanical breakdown or pollution exclusion under the insured landlord’s all-risk insurance policy. The court also upheld the lower court’s decision that the letter from the adjuster advising no proof of loss was required constituted waiver of the insured’s requirement to file the proof of loss.

O'Byrne v. Farmers' Mutual Insurance Co., [2014] O.J. No. 3303, July 11, 2014, Ontario Court of Appeal, G.J. Epstein, S.E. Pepall and K.M. van Rensburg JJ.A.

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A broker can crossclaim against an insurer where a declaration on the issue of coverage could provide the broker with a complete defence.

JBI v. ACE Ina Insurance, [2014] O.J. No. 2615, May 30, 2014, Ontario Superior Court of Justice, Master J. Haberman

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The insurer had separate policies of insurance with the plaintiff and the defendant. The plaintiffs argued that because they were also policy holders with the insurer, the insurer owed them a duty of good faith and fair dealing and the insurer was obliged to settle the plaintiffs' action against the defendants. The plaintiffs' action against the insurer was dismissed because the insurer owed no duty to the plaintiffs simply because the plaintiffs had an insurance policy with the insurer.

Sweet v. Sweet, [2014] S.J. No. 84, January 27, 2014, Saskatchewan Court of Queen's Bench, R.C. Mills J.

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Plaintiff's claim against defendant insurance brokers dismissed on basis that plaintiff adduced no expert evidence of standard of care and there was sufficient insurance available to plaintiff.

Midas Investment Corp. v. Dominion of Canada General Insurance Co., [2013] O.J. No. 3403, July 22, 2013, Ontario Superior Court of Justice, K.E. Swinton J.

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Summary trial application by the beneficiaries of a life insurance policy for judgment against the insurer and broker. The insurer and broker also brought summary trial applications for a dismissal of the action. The Court granted the insurer's and broker's applications because the insured failed to disclose material information at the time of reinstatement. Accordingly, the insurer was justified in voiding the policy.

Branch v. Empire Life Insurance Co., [2013] B.C.J. NO. 1386, June 26, 2013, British Columbia Supreme Court, L.D. Russell J.

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In action by injured driver against his insurance broker, a pleading in the statement of defence that 90% of Ontario motorists have only $1,000,000 in third party liability/family endorsement coverage was struck on the basis that it did not assist the trier of fact in determining what this plaintiff did and whether he was offered more insurance coverage.

Trottier v. Beauchamp, [2013] O.J. No. 2379, May 24, 2013, Ontario Superior Court of Justice, L.L. Gauthier J.

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