An insurer sought declarations that coverage was unavailable under a professional liability claims-made-and-reported insurance policy issued to a home inspector.
The insured had answered “no” on policy renewal applications when asked whether he was aware of any situation or circumstance that might result in a claim, despite knowing that a worker had died after contacting an exposed energized wire in a property he had inspected and that the Ministry of Labour had investigated and conducted an inquest.
The court held that the reporting obligation is assessed using an objective test and that the investigation and inquest constituted circumstances that reasonably called for disclosure.
Because the policy application contained an exclusion for claims arising from undisclosed circumstances, coverage never attached.
Relief from forfeiture was unavailable because the exclusion meant the claim fell outside the policy’s coverage entirely.
