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Insurer must pay fees for expert retained by insured to quantify loss

Be In Christ Church of Canada O/A Welland Brethren in Christ Church v Intact Insurance Company, 2019 ONSC 7412

On February 24, 2019, a fire broke out at the premises of Be in Christ Church of Canada (hereafter the “Church”).  The Church had a valid insurance policy with Intact Insurance Company (hereafter “Intact”), which included coverage for professional fees.

Intact retained EllisDon to prepare a scope document on repairs to the Church’s premises.  Intact then obtained quotes from three contractors to perform the work.  The quotes ranged from $1,272,180.35 to $1,912,034.32.  Intact proposed to pay the Church the lower estimate.

The Church was concerned about its lack of expertise to evaluate EllisDon’s scope.  So, the Church retained Lakeland Consulting Inc. to assist them.  Lakeland Consulting Inc. concluded that the appropriate estimate for repairs was $2,347,727.00.  Lakeland Consulting Inc. charged the Church $22,588.70 for their services.  The Church claimed this amount as a professional fee pursuant to their policy, but Intact refused to pay.

The Church applied to the Court for a declaration that Intact must pay Lakeland Consulting Inc.’s fee.  Under the summary of coverages, “Professional Fees” was listed under a section with a total limit of $500,000 coverage for each occurrence.  The policy stated the insured must “deliver to Intact, a proof of loss giving a complete inventory of the lost or damaged property and showing in detail quantities, costs, actual cash value and particulars of amount of loss claimed.”  The policy stated Intact would pay “reasonable fees charged by auditors…surveyors, engineers or other professionals retained by the Insured, for the purpose of producing or certifying particulars or details of the Insured’s business and that are required by the Insurer in connection with loss or damage caused to insured property by an insured peril.”

Justice Edwards of the Ontario Superior Court of Justice found the policy language concerning professional fees to be ambiguous.  The Church would not reasonably be expected to have expertise in assessing fire damage.  Justice Edwards concluded the policy was intended to cover professional fees incurred by the insured to assist in providing the insurer with details of the loss.  Justice Edwards ordered Intact to pay Lakeland Consulting Inc.’s fees of $22,588.70.

You can read Be In Christ Church of Canada O/A Welland Brethren in Christ Church v Intact Insurance Company, 2019 ONSC 7412 in its entirety here.

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