Jason P. Mangano

The applicant sought indemnification from an insurer for defence costs incurred in a slip and fall action where the applicant had been added as an additional insured under a contractor’s liability policy.

The respondent insurer argued that the claim was statute‑barred under the Limitations Act, 2002 and that it had no duty to defend the applicant for claims outside the contractor’s policy coverage.

The court held that where there is no clear and unequivocal denial of coverage, the limitation period for a claim for indemnity for defence costs begins when the underlying action is resolved by judgment or settlement.

Applying the “true nature of the claim” analysis to the pleadings and discovery evidence, the court found the essence of the underlying action was negligence in snow and ice removal performed by the insured contractor.

As a result, the insurer owed a duty to indemnify the additional insured for its defence costs.

The appellants appealed an order dismissing their application for a declaration that the respondent insurance company had a duty to defend a third party claim.

The claim involved property damage allegedly caused by pollution from dry cleaner tenants at the appellants' shopping plaza.

The Court of Appeal upheld the application judge's finding that the claims asserted were either outside the scope of coverage or fell within the policy's pollution and owned-property exclusions.

The appeal was dismissed.