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Insurer has no duty to defend where underlying claims arise from a family dispute, not business conduct.
The insurer appealed a decision finding it had a duty to defend the respondent in an action brought by his daughter and son-in-law.
The Court of Appeal allowed the appeal, finding that the policy only covered personal injuries 'arising out of the conduct of your business'.
The underlying statement of claim alleged a family matter, and the mere fact that the plaintiffs were employed in the business was insufficient to trigger the duty to defend.
Solicitor negligence appeal succeeded only on the insurer’s duty to defend issue.
Appeal from a solicitor's negligence judgment arising out of two insurance litigation files handled for an insurer.
In the Little matter, the court upheld the finding that counsel negligently failed to alert the insurer to a coverage issue revealed on discovery and that, but for that failure, the insurer would likely have denied errors and omissions coverage based on material non-disclosure in the insurance application.
In the Uniroyal matter, the court held that the trial judge erred in interpreting pollution exclusion wording as clearly excluding groundwater contamination under a 1987 umbrella policy, with the result that the insurer still had a duty to defend and suffered no compensable loss from counsel's conduct.
The appeal was therefore dismissed in part and allowed in part, with a later addendum awarding the appellant trial costs of the Uniroyal matter.
