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Notice Requirements For Professional Liability Insurance

Article by Deepshikha Dutt and Stevan Manojlovic

On June 18, 2019, the Nova Scotia Court of Appeal released its decision in the case involving Trisura Guarantee Insurance Company of Canada (Trisura) and Duncan et al. This decision is noteworthy, as it may lessen an insured’s obligation to notify and disclose potential claims, and increase the burden of diligence on the insurer.

Facts

Trisura provided professional liability coverage to Keybase National Financial Services Inc. (Keybase) from July 2008 to July 2012. Gregory Duncan and James White (Duncan and White) were Keybase advisors during this time.

Duncan and White assumed responsibility for John Allen’s (Allen) clients. Allen was also a Keybase advisor. He was dismissed by Keybase in September 2007. Allen was sued by his former clients in 2009. Allen was convicted for criminal offences, and his former clients were successful in their action against him (2014 NSSC 31 (CanLII)).

However, following the 2014 decision against Allen, the clients (Allen Clients) turned around and commenced a claim against Duncan and White as well, complaining of improper advice concerning mitigation of losses caused by Allen (2015 Action).

Duncan and White applied for, and were granted, an order compelling Trisura to defend the 2015 Action (2018 NSSC 92). Trisura appealed this decision. It asserted that the Court erred: (1) in its interpretation of notice obligations under the policy; (2) in finding that Duncan and White complied with those obligations; and (3) in finding that relief from forfeiture was available in the circumstances. The decision was upheld.

The Appellate Court’s decision

Trisura stated that: (1) it was not notified of any claims or potential claims during the policy periods; and (2) Keybase knew or should have foreseen that Duncan and White had exposure when Keybase first applied for insurance in 2008.

With respect to Trisura’s first argument on notification, the Court disagreed. Although the 2015 Action arose after the Trisura policy expired, the policy afforded coverage if Trisura was notified during the policy period. In 2010, Keybase’s third party insurance consultant (the “Consultant”) had reported potential claims from the Allen Clients. Trisura argued that these reports were related to Keybase and Allen’s negligence. They argued that “notice” was not collective. Further, notice respecting one Duncan and White client could not be notice for all clients. The circumstances needed to be differentiated.

The Court stated that Trisura’s knowledge of what transpired between Keybase, Allen and the Allen Clients underpinned its understanding of how Duncan and White, as subsequent advisors, were exposed to claims of liability. Trisura, as a sophisticated player in the insurance industry, with the benefit of prior knowledge and context, should have known the potential for further claims. Without prior knowledge, it was safe to assume that Trisura would have sought more explanation in the reports.

Trisura’s argument that notification with respect to potential liability regarding one client cannot be notification with respect to the others failed, because there was no material difference between the former Allen Clients’ claims against Duncan and White, and the losses sought.

In June 2010, the Consultant indicated there were seven client complaints against Allen and “two current agents”. Furthermore, on July 2, 2010, Trisura received an adjuster’s report stating:

“There could be exposure for the alleged failure by the subsequent Keybase advisors (Jim White and Greg Duncan) to rectify the situation or to have caused an aggravation of the situation”.

Trisura argued that the report was misconstrued. The actual focus was whether potential claims against Duncan and White should have been disclosed prior to placement of coverage with Trisura.

Nevertheless, on December 29, 2010, the Consultant wrote to Trisura’s adjuster:

“We confirm that any subsequent claims will be treated by Trisura as having arisen in the period in which these circumstances were reported … July, 1, 2009 to July 1, 2010.”

Trisura did not respond.

Trisura also argued that claims against Duncan and White were not commenced during the policy period, because Duncan and White themselves did not think they had any exposure. However, the Court noted that it was unnecessary for the insured to provide notice personally. Additionally, the Consultant was reporting to Trisura on behalf of Duncan and White, and Keybase. The purpose of notice was satisfied in light of the adjuster’s assessment of the potential exposure.

Takeaway

Considered alone, this is not a novel decision. However, it may form part of a broader legal framework, which will make it difficult for insurers to challenge the adequacy of notification and disclosure moving forward.

About Dentons

Dentons is the world’s first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world’s largest law firm, Dentons’ global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific Questions relating to this article should be addressed directly to the author.

Source: Mondaq

Sufficient insurance key to recovery in the event of environmental disasters

The Canadian Press

The Fort McMurray wildfire in May 2016 destroyed almost 2,600 homes and resulted in many tales of hardship but Rob de Pruis says one man’s “heart-breaking” story stands out for him.

The director of consumer and industry relations, western, for the Insurance Bureau of Canada, was stationed in the northern Alberta community for a year after the fire forced the temporary evacuation of more than 80,000 people.

At an event to help people with their insurance claims, a man who was nearing retirement age asked for advice, explaining his single-family home had burned to the ground.

“He said, ‘Well, I just paid off my mortgage, my mortgage company did not require me to have property insurance anymore, so I cancelled my property insurance, thinking that was the right thing to do,”’ de Pruis recalled.

The man was left with clear title to a residential lot full of charred debris. With no insurance, there was nothing the bureau could do.

“I heard a couple of years later that he sold the land and moved away to a community that was less costly for him,” said de Pruis. “It was just a bad memory.”

This spring’s wildfires in northern Alberta, floods in Quebec, Ontario and New Brunswick and fears of a third year of unusually intense forest fires in B.C. serve as a reminder that disaster can strike at any time and in unexpected ways.

The highest insured property loss in a year was $5.0 billion in 2016, with $3.7 billion of that the result of the Fort McMurray wildfire which resulted in about 60,000 claims, the Insurance Bureau says.

In the year 2013, the second-highest losses of $3.2 billion were recorded, including $1.6 billion as a result of floods in southern Alberta that destroyed parts of downtown Calgary, and about $1 billion as a result of a summer storm and flooding in Toronto. A big winter storm that hit southern Ontario and parts of Eastern Canada also padded the total.

“People realize too late what their insurance policy covers,” said de Pruis.

“When they lose everything, they realize the limit they chose to cover their stuff may not be enough to purchase all of their stuff again.”

Her level of insurance was the last thing on her mind as Jen Skinner, 37, and her husband and toddler son ran to their vehicle to escape the approaching Fort McMurray wildfire three years ago.

“The pieces of ash falling down were unreal, the size of my hand, and I ran in the house and told my husband, ‘Get garbage bags, throw clothes in the bags and we’re going,”’ she said.

“We left so fast we had to pull over on the side of the highway to determine where we were going to go.”

She said she was surprised the house was still standing when they returned but the siding was melted in places and the interior contaminated by smoke and toxins.

They wound up spending six months away from home and replacing almost every piece of furniture and every child’s toy. Their insurance claim still hasn’t been finalized but is expected to come in at more than $200,000.

As a mortgage broker, Skinner knew a lot about insuring property but her experience as a claimant taught her some new lessons.

“One thing I’d recommend is make sure you have everything in email, do not take anything verbal over the phone,” she said, adding she dealt with six different insurance company claims adjusters.

“I had one adjuster tell me to throw away all of my kid’s toys, anything that was plastic that might have absorbed the toxins, so I did that. And then the next adjuster said, ‘No, we’re going to clean this.”’

The Skinners had enough insurance to cover their expenses while their home was cleaned and repaired but she says many of her friends and neighbours ran out and had to pay their own way.

Another tip is to regularly take pictures or videos of the contents of the house because the insurance company will want a list of everything that needs to be replaced, she said.

Not all policyholders realize the difference between replacement cost and cash value insurance policies, de Pruis said. While choosing the latter will likely result in lower premiums, it could leave you short when replacing your property.

Most residential insurance policies provide coverage for fire damage, expenses in the event of a mandatory evacuation and compensation if a power outage damages appliances or their contents, he added.

Extra insurance should be considered for overland flooding — now available almost everywhere in Canada after being difficult to find five years ago — and sewer backup, along with special insurance for items such as jewelry, stamp or art collections.

Most Canadians have heard of the Fort McMurray wildfire but don’t know about a flash flood a few months later that overwhelmed the sewer system and damaged homes in higher-elevation neighbourhoods, de Pruis said.

“Even if you don’t live beside a lake or a river, you still could be subject to flooding,” he warned.

Hub International Acquires Alberta-based Berk Bilgen Insurance Ltd.

Chicago, July 3, 2019Hub International Limited (Hub), a leading global insurance brokerage, announced today that it has acquired Berk Bilgen Insurance Ltd. (BBI). Terms of the transaction were not disclosed.

BBI is an independent insurance brokerage based in Edmonton, Alberta, Canada, offering personal and commercial insurance solutions, including home, auto, life and travel. In ten short years, BBI has grown considerably under the leadership of Berk and Heather Bilgen and has become a market leader in the Edmonton area. Mr. and Ms. Bilgen chose Hub for its extensive services to clients and employees and will be active in the transition of business to the Hub team.

About Hub’s M&A Activities
Hub International Limited is committed to growing organically and through acquisitions to expand its geographic footprint and strengthen industry and product expertise. For more information on the Hub M&A experience, visit WeAreHub.com.

About Hub International
Headquartered in Chicago, Illinois, Hub International Limited is a leading full-service global insurance broker providing property and casualty, life and health, employee benefits, investment and risk management products and services. With more than 11,000 employees in offices located throughout North America, Hub’s vast network of specialists provides peace of mind on what matters most by protecting clients through unrelenting advocacy and tailored insurance solutions. For more information, please visit www.hubinternational.com.

 

Canada Day Trivia, How Would You Score?

InsuranceHotline.com

  1. Canada is a bilingual country, yet there is only one officially bilingual province. Name it.
  2. What year was the “loonie” introduced?
  3. What year was the “toonie” introduced?
  4. How many times zones are there across Canada?
  5. Which province is the country’s largest producer of maple syrup?
  6. What year did Newfoundland’s name officially change to include Labrador?
  7. Name the two national sports of Canada.
  8. True or false: Canadian forests account for 10% of all forest coverage worldwide.
  9. The world’s first UFO landing pad is in this province. (Build it and they will come?) Name the province. Bonus points if you know the town’s name too!
  10. How many Olympics has Canada hosted?

  1. Canada is a bilingual country, yet there is only one officially bilingual province. Name it.
    New Brunswick (source: The Office of the Commissioner of Official Languages For New Brunswick)
  2. What year was the “loonie” introduced?
    1987 and give yourself an extra point if you knew it has an eleven-sided shape. (source: Royal Canadian Mint)
  3. What year was the “toonie” introduced?
    1996. (source: Royal Canadian Mint) Plus, if you ever visit Panama, you’ll notice that their one dollar coin (the Balboa) looks a whole lot like our toonie. That’s because it was produced by the Royal Canadian Mint.
  4. How many times zones are there across Canada?
    6 (source: Citizenship & Immigration Canada)
  5. Which province is the country’s largest producer of maple syrup?
    Quebec (source: Citizenship & Immigration Canada)
  6. What year did Newfoundland’s name officially change to include Labrador?
    2001 (source: Citizenship & Immigration Canada)
  7. Name the two national sports of Canada.
    Ice hockey, the official winter sport and lacrosse, the official summer sport. (source: Canadian Heritage)
  8. True or false: Canadian forests account for 10% of all forest coverage worldwide.
    True (source: Natural Resources Canada
  9. The world’s first UFO landing pad is in this province. (Build it and they will come?) Name the province. Bonus points if you know the town’s name too!
    St. Paul, Alberta
  10. How many Olympics has Canada hosted?
    Three: Montreal (1976), Calgary (1988) and Vancouver (2010).

It’s just not Canada Day without some Canadian trivia, and InsuranceHotline.com has you covered.

Source:  InsuranceHotline.com

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