|
Insurance - Auto - Liability Priority ('Who to Sue?'). BelairDirect Insurance Company v. Continental Casualty Company
In BelairDirect Insurance Company v. Continental Casualty Company (Ont CA, 2023) the Court of Appeal considered a priority/coverage ['duty to defend'] contrast between the SABS auto and the tort auto insurance regimes:[2] The Continental Casualty Company issued a policy of insurance that included third party liability coverage for the lessee/driver. BelairDirect Insurance Company (“Belair”) did not. Nonetheless, Continental contends that the application judge erred in holding that it, rather than Belair, is the priority insurer under s. 277(1.1) of the Insurance Act, R.S.O. 1990, c. I.8 (the “Act”)[1] and has a duty to defend the lessee/driver in the underlying personal injury action.
....
[6] In November 2016, Mr. Sarantakos and WTH were sued for $2,100,000 (the "personal injury action") by the driver of the other vehicle involved in the accident and her husband (the “plaintiffs”).
[7] Continental appointed counsel (“Continental’s counsel”[2]) to defend the personal injury action. As a matter of course, Continental’s counsel conducted a priorities investigation to determine whether there was other insurance responsible for responding to the personal injury action.
[8] Section 277(1.1) of the Act addresses the order in which the third party liability provisions of any available motor vehicle liability policies shall respond “in respect of liability arising from or occurring in connection with the ownership or, directly or indirectly, with the use or operation of [a leased] automobile”. Section 277(1.1) requires that insurance available to a lessee or driver respond in priority to insurance available to an owner which is excess to the lessee’s or driver’s available insurance.
[9] Further, subject to certain exceptions, s. 267.12 of the Act caps the vicarious third party liability of rental car companies in respect of one incident at $1,000,000.
....
[21] Like the application judge, I see no basis for drawing an analogy between priority cases decided under the SABS priority regime and the priority/coverage issues in this case. There is no similar regulation to that governing the SABS priority regime applicable to priority/coverage disputes among tort insurers and the policy implications differ. The rule applicable in the SABS context exists to ensure prompt payment of SABS benefits by preventing priority disputes from delaying payment. The urgency is less pressing in the tort context. For priority disputes relating to tort liability, the principles on which Continental sought to rely (contract, estoppel, waiver) are properly applicable. . Ontario (Government and Consumer Services) v. Gore Mutual Insurance Company
In Ontario (Government and Consumer Services) v. Gore Mutual Insurance Company (Ont CA, 2023) the Court of Appeal considered the party liability priority under the Insurance Act [s.268(2)]:[1] The driver of an uninsured snowmobile was killed and a passenger was injured, after that vehicle, and an insured snowmobile that was accompanying it, struck a tree at almost the same time. Statutory accident benefits were payable for the injured passenger and for the death of the driver. The question that divides the parties is about who is liable to provide those benefits, Gore Mutual Insurance Company (“Gore”), the private insurer of the insured snowmobile, or the publicly funded Motor Vehicle Accident Claims Fund (the “Fund”).
[2] Section 268(2) of the Insurance Act, R.S.O. 1990, c. I.8, sets out rules for determining liability for statutory accident benefits. ...
....
C. THE STATUTORY SCHEME AND THE ISSUE
[10] Section 268(2) of the Insurance Act sets out rules for determining who is liable to pay statutory accident benefits to an occupant of an automobile. Automobile is defined in the Insurance Act to include a snowmobile.
[11] In descending order of priority, those rules are:i. the occupant has recourse against the insurer of an automobile in respect of which the occupant is an insured,
ii. if recovery is unavailable under subparagraph i, the occupant has recourse against the insurer of the automobile in which he or she was an occupant,
iii. if recovery is unavailable under subparagraph i or ii, the occupant has recourse against the insurer of any other automobile involved in the incident from which the entitlement to statutory accident benefits arose,
iv. if recovery is unavailable under subparagraph i, ii or iii, the occupant has recourse against the Motor Vehicle Accident Claims Fund. [Emphasis added.]
|
