What's The Difference? An Insurance Policy Versus An Insurance Contract For A Group Insurance Program

• Published date: 18 August 2020
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation, Professional Negligence
• Law Firm: Clyde & Co
• Author: Ms Julia Vizzaccaro

The Ontario Court of Appeal's decision in Van Huizen v Trisura Guarantee Insurance Company, 2020 ONCA 222 underscores the distinction between an insurance policy and an insurance contract particularly the importance this difference has in determining whether an insurer's duty to defend is engaged for individuals participating in a group insurance program.

Background

Trisura Guarantee Insurance Company ("Trisura") issued a professional liability insurance policy (the "Master Policy") to the Appraisal Institute of Canada ("AIC"). The Master Policy pertained to claims made against AIC members, their personal corporations, employers, and the AIC, for the negligent provision of professional appraisal services.

Coverage was extended to individual members of the AIC under the Master Policy by way of individual application. An individual certificate of insurance was issued to each member.

Mr. Van Huizen, a professional appraiser and member of the AIC made a claim under the Master Policy and his individual certificate of insurance (the "Van Huizen Insurance Contract") for coverage in respect of three proceedings (two actions and a third party claim), which were brought against Mr. Van Huizen and a business style, Hastings Appraisal Services (collectively referred to as "Van Huizen").

These proceedings arose from an allegedly negligent property appraisal performed by another AIC member, Mr. Barkley. Mr. Barkley was also insured under the Master Policy and had his own individual certificate of insurance issued by Trisura (the "Barkley Insurance Contract"). Mr. Barkley passed away in October 2016.

Before Trisura could issue its coverage position in respect of the Van Huizen claim, Van Huizen commenced an action against Trisura seeking a declaration that Trisura had a duty to defend and indemnify them under the Van Huizen insurance contract for the three proceedings.

The Summary Judgment Motion

Trisura brought a summary judgment motion to dismiss the action on the basis that it owed no duty to defend. In particular, Trisura took the position that, among other things, no coverage was available under the Van Huizen Insurance Contract because it did not provide coverage for Mr. Barkley's alleged professional negligence.

The motion judge dismissed Trisura's motion and granted judgment in favour of Van Huizen. In reaching this conclusion, the motion judge adopted a broad interpretation of the Master Policy and concluded that "Mr. Van Huzien has coverage for a legal...