Published In: Insurance Law Newsletter – 09.Apr.19 April 9, 2019

Case Summary: Applicant insurer was not estopped from litigating coverage by a prior holding on the respondent insurer’s duty to defend

Insurance law – Commercial general liability insurance – Homeowner’s insurance – Duty to defend – Excess liability – Estoppel

Royal & Sun Alliance Insurance Co. v. Intact Financial Corp., [2019] O.J. No. 969, 2019 ONSC 1339, Ontario Superior Court of Justice, February 26, 2019, E.M. Morgan J.

The applicant insurer sought an order requiring the respondent insurer to contribute its proportionate share to settlement of a tort claim. The applicant insured the defendant in the tort claim under a commercial general liability policy and the respondent insured the defendant under a homeowner’s policy. The defendant previously brought an application before Justice Mew seeking an order that the respondent insurer defend and cover the tort claim. Mew J. held that the respondent’s coverage was excess coverage and it did not have a duty to defend or cover the claim until primary coverage was exhausted. The respondent argued that the applicant was seeking to re-litigate the respondent’s liability for coverage. The applicant argued that Mew J’s holding was only binding in respect of the duty to defend.

The court allowed the application. The applicant was estopped from re-litigating Mew J.’s holding on the duty to defend, but the issue of coverage was not properly before him and there was no binding holding on coverage. Both policies provided primary coverage for different risks and thus the “other insurance” provisions were inapplicable. The policies overlapped to some extent but were not identical. Accordingly, coverage was shared and the respondent was ordered to reimburse the applicant for its proportionate share of the settlement funds.

This case was digested by Paul R. Saunders, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Paul R. Saunders at