Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

One Boating Accident, Two Insurance Policies. Which One Pays?

One Boating Accident, Two Insurance Policies. Which One Pays?

By:

Posted June 21, 2019

The recent Court of Appeal decision in the case of TD General Insurance Company v. Intact Insurance Company, 2019 ONCA 5, addresses a situation where the owner and the operator of a motorboat involved in an accident both have policies of insurance that cover the loss.

The case arose out of a boating accident in which a boat struck a shoreline and the passenger sued the boat’s driver and its owner. The driver was covered by two insurance policies: The first policy was the boat’s owner’s (the TD Policy);  the second policy was his own homeowner’s policy (the Intact Policy).  Both of these policies included matching “other insurance clauses.” The clauses read:

If you have other insurance which applies to a loss or claim or would have applied if this policy did not exist, this policy will be considered excess insurance, and we will not pay any loss or claim until the amount of such other insurance is used up.

TD brought the matter to court seeking an order that both policies were required to share equally in the cost of the driver’s legal defence and payment of the injured plaintiff’s damages. TD lost. The judge hearing the case found that the TD Policy was “intended to provide the primary insurance coverage for the watercraft.”

TD appealed, and the Court of Appeal held that the judge was wrong to apply the “closeness to the risk” approach. This approach had already been rejected by the Supreme Court of Canada in the case of Family Insurance Corp v Lombard Canada Ltd.  In that case, the Supreme Court held that where there is overlapping coverage “the focus of the examination is to determine whether the insurers intended to limit their obligation to contribute, by what method, and in what circumstances vis-à-vis the insuredWhere there are no limiting intentions or where those intentions cannot be reconciled, the insurers must share the burden equally under a coordinate obligation to make good the loss”.

In the case before the court, the policies clearly overlapped. Both policies even had identical “other insurance clauses,” and neither policy referred to the other. The Court of Appeal found that the policies were reconcilable. As a result, both TD and Intact had to share equally in paying defence costs and any damages.

The Court next addressed what would happen if 50% of the damages exceeded the policy limits of one of the policies. Would the other insurer have to make up the difference? In deciding this issue, the court wrote:

“The focus in answering the second question is on the excess insurance clauses. The application judge found it significant that Intact would be an excess insurer should the claim exceed the limits of the TD Policy. However, as noted … above, both policies had identical “other insurance clauses”. So in the same way, should the claim exceed the limits of the Intact policy, TD would be an excess insurer … . The limiting obligations in the two policies were irreconcilable.

…In the present case, both policies, by their terms, afforded primary coverage to the driver for the claim, and both policies provide that they are excess to other insurance that covers the loss. The conflict is irreconcilable. If you have other insurance which applies to a loss or claim, or would have applied if this policy did not exist, this policy will be considered excess insurance, and we will not pay any loss or claim until the amount of such other insurance is used up.”

What the Court of Appeal’s decision means to a person injured in a boating accident is that they may have access to the combined 3rd party liability limits of two insurance policies to pay for their damages.

This blog post was written by Edward (Ted) Masters, a member of the Disability Insurance Claims and Personal Injury teams.  He can be reached at 613-566-2064 or at ted.masters@mannlawyers.com.

More Resources

Blog |
Family Law
By: 
Co-parenting with your ex-partner can be challenging. It involves constant coordination and communication about various aspects of your children’s lives. Whether it is about schedules,[...]
Blog |
Wills, Trusts and Estates
By: 
Over time, individuals could acquire assets in different jurisdictions that are governed by different legal systems. Similar to the consideration of double wills in distinguishing[...]
Blog |
Family Law
By: 

Posted January 31, 2024

In the first part of this series, we reviewed the background, trial, and appeal to the Saskatchewan Court of Appeal in Anderson v Anderson. This[...]
Blog |
Practice Management
By: 

Posted January 26, 2024

On July 17, 1797, ten lawyers were present at the Wilson’s Hotel in Newark, Upper Canada, to read “An Act for the better regulating the[...]
Blog |
Business Law
By: 

Posted January 23, 2024

A not-for-profit corporation incorporated pursuant to the Canada Not-for-Profit Corporations Act (the “CNCA”) is required to maintain certain records, including records as to its members,[...]
Blog |
Employment, Labour, and Human Rights
By: 

Posted January 17, 2024

In November of 2023, the Ontario government introduced new legislation, once again, amending the Employment Standards Act, strengthening employment and labour laws in the province.[...]
Ted Masters

Ted Masters

My practice is focused on helping people who have been injured in car accidents or through medical negligence or who have been denied disability insurance benefits. With over 40 years of experience as a personal injury lawyer, I understand how a serious injury or denial of disability benefits affects not just my individual client, but their entire family. I am alert to each client’s individual physical, emotional and financial needs and challenges. I work to achieve an outcome that is client focussed. As a trained mediator, I understand that my client’s personal goals must be met in order to come to a satisfactory resolution of their case, preferably through a reasonable settlement, but by trial judgement if necessary. Although assisting individuals has been the focal point of my legal career, my clients get the benefit of my wide range of litigation experience including disability claims, intellectual property litigation, commercial disputes, Indian... Read More

Read More About Ted Masters

Subscribe to Our Newsletter

"*" indicates required fields

Name*
Consent*
This field is for validation purposes and should be left unchanged.