The respondents leased buses to a company that obtained a comprehensive business insurance policy from the appellant insurer.
The policy covered the respondents as an additional named insured.
After one of the leased buses was damaged, the insurer paid the repair costs but deducted unpaid premiums owed by the lessee.
The respondents successfully applied for an order that the insurer could not rely on s. 134(2) of the Insurance Act to withhold the unpaid premiums from the loss payment.
The Court of Appeal dismissed the insurer's appeal, holding that s. 134(2) restricts recovery by deduction to amounts payable to the party responsible for payment of the premiums, not a third party.
