This is the appeal of a judgment by the motions court holding that an excess insurer was required to contribute pro rata to defence costs incurred by a primary insurer in defending an action where the claim was settled. The Appeal court reversed in part, holding that the excess insurer was responsible to contribute only to costs incurred after it had definitive notice that a judgment could exceed the policy limits of the primary insurer.

ING Insurance Co. of Canada v. Federated Insurance Co. of Canada, [2005] O.J. No. 1718, Ontario Court of Appeal

This was an automobile insurer’s appeal of a decision ordering it to pay for separate counsel to defend its insured. At issue was whether the insurer, after adding itself as a third party to a civil action against its insured, had the right to take a position incongruent with the interests of the insured Defendant by raising issues relevant to a coverage dispute between the insurer and insured. The Court of Appeal upheld the motions court decision that the insurer and its counsel did not have the right to take a position contrary to its insured, regardless of whether coverage was in dispute.

28. April 2005 0
Parlee v. Pembridge Insurance Co., [2005] N.B.J. No. 174, New Brunswick Court of Appeal

An insured who is found to be in breach of the conditions of his automobile insurance is responsible to compensate his insurer for funds paid to a third party under his policy of insurance. The insurer’s ability to recover these funds from its insured is not effected by the fact that it consented to a Consent Dismissal Order terminating the action commenced against its insured for the injuries suffered in the accident.

05. April 2005 0
Insurance Corp. of British Columbia v. Schmidt, [2004] B.C.J. No. 2892, British Columbia Supreme Court

Vacating property insured by a policy of fire insurance constitutes a material change in the risk insured by the policy. Failure to notify the insurer will void the policy. If the insured’s insurance broker is advised that the property has been vacated, the insurance broker has an obligation to advise the insured that the property may no longer be insured by the policy. However, if the insured was aware that vacating the property could void his insurance, the insurance broker will not be liable for any damages resulting from an uninsured loss.

31. March 2005 0
Ken Murphy Enterprises Ltd. v. Commercial Union Assurance Co. of Canada, [2005] N.S.J. No. 114, Nova Scotia Court of Appeal

A former student of Upper Canada College commenced an action against four teachers alleging sexual assault. In addition, the student alleged that each of the teachers knew or ought to have known that the Plaintiff was being abused by the other teachers, and that each of the teachers failed to take any adequate steps to prevent or stop that abuse. The teachers named in the Statement of Claim applied for a declaration to have the allegations made against them defended pursuant to Upper Canada College’s policy of insurance. The court determined that despite a section in the policy which excluded coverage for bodily injury caused intentionally by or at the direction of the insured, the allegations of failing to take any adequate steps to prevent or stop the sexual abuse of the student constituted an independent tort, and the teachers were entitled to coverage under Upper Canada College’s policy of insurance to defend the allegations made against them. However, given the nature of the excluded allegations the insurer was only responsible for 20% of the teacher’s defence costs.

30. March 2005 0
Sommerfield v. Lombard Insurance Group, [2005] O.J. No. 1131, Ontario Superior Court of Justice