TD General Insurance Company v. Intact Insurance Company

In Appeals, Marine Insurance on (Updated )

Précis: The Ontario Court of Appeal found that two insurers, both having identical "other insurance clauses", each had to share the cost of the injured party’s claim.

Facts: The passenger of an Aluma boat was injured when the boat struck the shoreline. The passenger sued both the operator of the boat as well as its owner. The operator was not the owner of the boat but had the owner’s permission to operate. The operator was covered by a TD insurance policy taken out by the owner of the boat that covered him since he was operating the boat with the owner’s permission. The operator was also covered by his own home insurance policy, through Intact. Both policies had identical "other insurance clauses" that considered the policy excess if another insurance applied to a loss or claim. TD appealed the trial judge’s dismissal of TD’s application that both insurance companies would share equally in the defence.

Held: Appeal allowed.

Reasons: The Ontario Court of Appeal found that the trial judge erred in applying the "Minnesota Approach" factors, an approach expressly rejected by the Supreme Court of Canada in Family Insurance Corp. v. Lombard. The Ontario Court of Appeal found that there was overlapping coverage, and that the two limiting "other insurance clauses" in each policy were irreconcilable. Following Family Insurance, the appeal court found that two insurers must share the burden equally under a coordinate obligation to make good on a loss.