Thomas Donnelly

The plaintiffs, representing a class of small to medium-sized businesses, sought coverage under their business interruption insurance policies for losses sustained due to the COVID-19 pandemic and related civil authority orders.

The court held a common issues trial to determine whether the presence of the SARS-CoV-2 virus or government lockdown orders could cause 'physical loss or damage to property' within the meaning of the policies.

The court concluded that the virus does not physically alter or damage inanimate surfaces, and that the loss of use of the premises due to government orders does not constitute physical loss or damage.

Consequently, the court answered the certified common issues in the negative, finding no coverage under the business interruption provisions.

The defendants in a certified class action regarding COVID-19 business interruption insurance claims brought a motion seeking joint adjudication and common case management of common questions across approximately 79 overlapping proceedings.

The motion was opposed by several plaintiffs in individual actions who wished to proceed independently.

The court dismissed the motion, affording deference to a prior case management decision that declined to stay the individual actions, and finding that forcing joint adjudication would inappropriately undermine the plaintiffs' right to opt out of the class proceeding and cause undue delay.

The applicant sought a declaration that its insurer had a duty to defend it in an underlying lawsuit.

The insurer argued that coverage was excluded under Exclusion 20 of the claims-made policy, which excluded claims of which the insured was aware as of the 'inception date of this Policy'.

The court found the phrase 'inception date' to be hopelessly ambiguous, as it could refer to either the initial policy issuance date or the most recent renewal date.

Applying the principles of contract interpretation, the court construed the ambiguous exclusion clause against the insurer and granted the application, ordering the insurer to provide a defence.

The applicant insurer sought a declaration that three other insurers had a duty to defend a construction company in an action for damages resulting from an allegedly defective mechanical system.

One insurer, AIG, denied a duty to defend based on faulty workmanship and loss of use exclusions.

The court found that the allegations in the statement of claim regarding consequential damage and loss of use were sufficiently broad to raise the possibility of coverage, triggering AIG's duty to defend.

The court further held that the defence costs should be allocated among the insurers on a 'time on risk' basis, rather than equally, and that a self-insured retention clause did not alter one insurer's obligation to contribute to defence costs at this stage.

The applicant insurer sought a declaration that it owed no duty to defend or indemnify the insured under a homeowner's policy for a third-party claim arising from a motor vehicle accident.

The underlying claim alleged the insured negligently operated his vehicle and also exited his vehicle to threaten the other driver.

The respondent automobile insurer argued the homeowner's policy might cover the threatening behaviour.

The court held that the insured's actions after exiting the vehicle were incident to the use or operation of a motor vehicle, and therefore fell within the homeowner's policy exclusion for claims arising from the ownership, use, or operation of a motorized vehicle.

The declaration was granted.