You are here

Additional damages on claim previously made under a claims made insurance policy

Primary tabs

This book was written by Michael Dew, a Vancouver lawyer who practices civil litigation, including representing persons who have been denied coverage under property insurance policies, or liability insurance policies. If you have been denied insurance coverage and require assistance with making a claim against your insurer call Michael at 604 895 3160.
In Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 SCR 252 the Supreme Court of Canada considered whether a claim for additional compensation was covered under a claims made policy when that claim for additional compensation was advanced after expiration of the policy period but when there had been an earlier (smaller) claim relating to the same negligence and made within the policy period. On the wording of the policy in that case (which the court found to have some “occurrence” characteristics to it) the court held that there was coverage, partly because of the wording in the policy that stated that there was no coverage under a policy applying to a successive period if the existence of the claim was known about before that successive period began:  
To hold that damages claimed after expiry of the policy are not part of the claim would be to endorse a situation where an insured such as Reid Crowther could in some circumstances find it impossible to obtain indemnity for a loss.  Assuming for the moment that Reid Crowther renewed its coverage with Simcoe & Erie on October 1, 1981, as it had the ten preceding years, it might have been unable to obtain indemnification for the further damages discovered during the renewal period.  This leads to the absurdity that Reid Crowther might have had no coverage at all for the damages discovered in 1981 despite being continuously insured by Simcoe & Erie.  Reid Crowther could not have claimed under the policy in place when the negligence was discovered and the first damages "claimed" if one accepts Simcoe & Erie's contention that the claim falls outside that policy.  At the same time, Reid Crowther would arguably have been unable to claim for the damage under the renewal policy because it had knowledge of the negligent act giving rise to it prior to the effective date of that renewal policy.  So Reid Crowther would have found itself without any coverage at all….  It follows that a view of Simcoe & Erie's policy as part of a system of successive insurance designed to provide liability coverage from year to year militates against the interpretation which the insurer urges upon us.
(Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 SCR 252).