Berkley Insurance v Aviva Insurance et al., 2021 ONSC 6596.
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Weston McArthur (Student-at-Law)
John Doe, a practicing nurse in Ontario and member of the College of Nurses of Ontario (CNO), was insured under two professional liability insurance policies, one through the Applicant (Berkley Insurance) and the other through the Respondents (Aviva Insurance et al).
Following the death of a patient under his care, a complaint was filed with the CNO against Mr. Doe which prompted an investigation and triggered coverage under his policies.
There was no dispute as to whether Mr. Doe qualified as an insured, or whether the insurers had a duty to defend; the issue was how the defence costs were to be divided between the insurers.
The Applicant sought an order to require the Respondents to share the costs on a 50/50 basis, arguing that both insurance policies were effectively the same and therefore should contribute equally. The Respondents were of the position that the limit of the Applicant’s policy should be first be reached, and then the Respondents would contribute funds.
The issue hinged upon the “other insurance” clauses found within both the Applicant’s and the Respondents’ policies, which excluded claims covered by other insurance policies and stated that their policy’s coverage would be in excess of the other policies.
If the “other insurance” clauses were found to cancel each other out, the Applicant and Respondent would share the costs equally; if the “other insurance” clause in one of the policies was found to be applicable, the policies would work together with one insurer as primary and the other in excess.
In this case, the Court found that the wording of the Applicant’s policy regarding claims of this type (i.e., complaints filed with the CNO) provided different coverage than the Respondents’ policy, meaning that the “other insurance” clause was applicable to the Respondents.
As Justice Diamond wrote, the Applicant “effectively agreed to act as the primary insurer, and as such there is no requirement for an equitable contribution between the parties” [para 29]. The application was therefore dismissed.