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January 2019

Court of Appeal Clarifies Approach to Overlapping Insurance Coverage

Case Study: TD v. Intact

In TD General Insurance Company v. Intact Insurance Company,1 the Ontario Court of Appeal provided clarity on the issue of overlapping insurance coverage. Most notably, Juriansz J.A. confirmed that where limiting intentions within multiple insurance policies cannot be reconciled, the insurers must share equally in the obligations of defence and indemnity. Insurance companies and lawyers alike will need to keep this decision in mind when dealing with cases where there are multiple policies responding to a loss.

The Facts

The case involved a boating accident. The passenger of the boat sued the driver and owner, claiming that she was injured when the boat struck the shoreline.

The driver was covered by two insurance policies. The owner of the boat held a TD homeowner's policy that covered the driver, who was driving the boat with the owner's permission. The driver was also covered by his own homeowner's policy, issued by Intact. Both insurance policies contained identical "other insurance" clauses, stipulating that the policy would be considered excess if there was other insurance that applied to a claim.

TD brought an application seeking an order that both insurers had to share equally in the defence and indemnity of the action against the driver. The application judge dismissed the application, finding that TD was the primary insurer and that Intact was the excess insurer.

TD appealed the application judge's decision.

Principles for Overlapping Coverage

Juriansz J.A. reaffirmed that the governing authority on the issue of overlapping coverage is the Supreme Court of Canada's decision in Family Insurance Corp. v. Lombard Canada Ltd.2 He noted that in Family Insurance, the Supreme Court rejected the "Minnesota" approach to overlapping coverage in favour of another approach.3 The "Minnesota" approach, which emphasizes each insurers' closeness to the risk, is therefore no longer applicable in such cases.

...the correct approach is to determine whether the insurers intended to limit their obligation...

Citing Family Insurance, Juriansz J.A. confirmed that the correct approach is to determine whether the insurers intended to limit their obligation, and if so, by what method and in what circumstances.4 He stated that where there are no limiting intentions or where those intentions cannot be reconciled, the insurers must share the burden of defence and indemnity equally under a coordinate obligation to make good the loss.5

In Juriansz J.A.'s view, the analysis boiled down to two questions:

  1. Whether there is overlapping insurance coverage; and
  2. Whether the insurers intended to limit their obligation to contribute, by what method, and in what circumstances.6

Application to the Case

Juriansz J.A. held that the application judge erred in applying the "Minnesota" approach.7 Relying on the approach set out in Family Insurance, he first examined the insurance policies and found that there was overlapping coverage.8 He then considered the "other insurance" clauses in each policy and noted that the limiting obligations were irreconcilable.9 As a result, Juriansz J.A. concluded that both TD and Intact were required to share equally in the obligations of defence and indemnity.10 The appeal was therefore allowed and both insurers were considered to be on an equal footing for the purposes of the claim.

Conclusions and Implications

This case has important implications for both insurance lawyers and insurers. It serves as a reminder that where there are multiple insurance policies responding to a loss, the insurers will be considered to be on an equal footing if the "other insurance" clauses cannot be reconciled.

In light of the Court of Appeal's decision, it is likely that more insurers will be found to be equally responsible for the costs of defence and indemnity, given that policy language is fairly uniform. If insurers wish to limit their obligation to contribute, they may have to consider adjusting the wording of their "other insurance" clauses to be more specific.

  1. 2019 ONCA 5 [TD v Intact].
  2. 2002 SCC 48 [Family Insurance].
  3. TD v Intact, supra note 1 at para 16.
  4. Ibid at para 17.
  5. Ibid.
  6. Ibid at paras 19-20.
  7. Ibid at para 16.
  8. Ibid at para 19.
  9. Ibid at para 20.
  10. Ibid at para 21.


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