British Columbia Insurance Blog : Canada Insurance Lawyer & Attorney : Michael Thomas of Harper Grey Law Firm : British Columbia, Vancouver

The court of appeal upheld the trial decision that the insured had specifically sought to obtain prior act coverage under a directors and officers liability policy in relation to certain known potential claims and that the insurer had waived certain “carve out” provisions in the policy relating to known facts or circumstances that might give rise to a claim and could not therefore deny coverage to the insured in relation to those claims.

Coventree Inc. v. Lloyds Syndicate 1221 (Millennium Syndicate), [2012] O.J. No. 2287, May 24, 2012, Ontario Court of Appeal, D.R. O'Connor A.C.J.O., R.P. Armstrong and D. Watt JJ.A.

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The plaintiff insureds moved for summary judgment in the action requiring the defendant insurer to pay defence costs they incurred defending another action pursuant to the terms of a Director's and Officer's liability insurance policy ("D&O liability policy"). Based on the plain wording of the policy the plaintiff insureds established that the claims asserted against them in the other action were claims made against "Insured Persons" for "Wrongful Acts" as those terms were defined in the policies and therefore fell within the basic coverage section of each of the insurance policies. The court concluded that the insurer had a duty to advance defence costs prior to the final disposition of the action. At issue was what constitutes sufficient notice of circumstances under a D&O liability policy to entitle a subsequent claim arising out of such notice to be deemed to have occurred during the policy.

Onex v. American Home Assurance Co. [2011] O.J. No. 3031, June 30, 2011, Ontarior Superior Court of Justice, L.A. Pattillo J.

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Application by the insured for an order requiring the insurers to reimburse the costs incurred in successfully defending criminal charges. The insured argued the insurers wrongly denied the insured’s claim for indemnification of his legal expenses. The Court found that the exclusion relied upon by the insurers did not apply and ordered reimbursement for all legal costs.

Perrault v. Encon Insurance Managers Inc. [2011] O.J. No. 3566, June 30, 2011, Ontario Superior Court of Justice, S.E. Greer J.

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Insurer's application to be added as a party in an action by former employees against former directors and officers of its insured company was dismissed.

Pope & Talbot Ltd. (Re), [2011] B.C.J. No. 793, April 28, 2011, British Columbia Supreme Court (In Bankruptcy and Insolvency), P.W. Walker J.

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Coventree Inc. ("Coventree") was successful in obtaining a declaration that an insurance policy issued by an insurer ("Lloyds") was operative despite the fact that notice of the claim had been provided to an earlier D&O insurer where the Court held that Lloyds had waived the right to rely on the earlier notice.

Coventree Inc. v. Lloyds Syndicate 1221 (Millenium Syndicate) [2011] O.J. No. 4036, September 13, 2011, Ontario Superior Court of Justice, T.R. Lederer J.

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The applications by Frank Dunn ("Dunn") and Douglas Beatty ("Beatty") against Chubb Insurance Co. of Canada ("Chubb") for a defence cost allocation was allowed and Chubb was ordered to pay 90% of the defence costs of Dunn and Beatty to the policy limits.

Dunn v. Chubb Insurance Co. of Canada, [2010] O.J. No. 1669, April 23, 2010, Ontario Superior Court of Justice, D.R. Cameron J.

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Dunn, an executive covered by a Liability and Indemnification policy issued by Chubb with a policy period commencing November, 1999, seeked to have defence costs in respect of allegations of fraud and misconduct that took place in 2001, as well as misconduct allegations that took place in 2002/2003 paid for by Chubb. The claim was dismissed.

Dunn v. Chubb Insurance Co. of Canada, [2009] O.J. No. 720, February 11, 2009, Ontario Superior Court of Justice, C.L. Campbell, J.

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An appel by Liberty Mutual Insurance Co. of the decision of the Superior Court of Justice concerning directors' and officers' liability policy. The initial plaintiff, now respondent mining company indemnified the directors and officers for defence costs they incurred in connection with a class action brought against them by shareholders for prospectus misrepresentation. This class action was settled The plaintiff mining company looked to the insurer to cover the paid legal costs.

Boliden Ltd. v. Liberty Mutual Insurance Co.  April 17, 2008.  Ontario Court of Appeal.

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The Court of Appeal, in allowing the appeal, held that the "insured v. insured" exclusion clause was unambiguous. The insurer did not have a duty to defend.

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The court authorized the funding of a settlement reached in a derivative action commenced in the State of Delaware. The process of settlement met the test of commercial reasonableness. The mere fact that other insureds had, or may have, claims that were not finally determined, could not operate to prevent those otherwise entitled to indemnity from receiving it.

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