Study 3 - Policy Contract Analysis Flashcards
What happened in Whiten v. Pilot Insurance?
Bad conduct by the insurer led to punitive damages
Insurer alleged arson, although evidence did not support it
What was the relevance of Scott v. Shepherd?
It was the origins of proximate cause
Firecracker was thrown into crowded market, occupier of stall threw it away to avoid danger and it happened several times until it exploded and cause injury to the eye
Defendant who threw it was found liable
What case was the precedent for proximate cause?
Scott v. Shepherd
What has the declarations page been replaced by in many policies?
Coverage summary
What is within the insuring agreements?
Limitations, exclusions, conditions, additional coverages
What are the four principles to interpret insurance contracts in common law provinces?
1) Contra proferentem
2) Coverage provisions construed broadly
3) Exclusion clauses construed narrowly
4) Reasonable expectations and intent of the contracting parties
What is contra proferentem?
“Against the offerer”
Define contract of adhesion
Non-negotiable as one party drafts the policy wording or offers a standardized contract wording
What case was the precedent for contract interpretation, and which case affirmed it?
Consolidated-Bathurst Export Ltd v. Mutual Boiler and Machinery Insurance Co
Reid Crowther & Partners v. Simcoe & Erie General Insurance Co
What was the relevance of Reid Crowther & Partners v. Simcoe & Erie General Insurance Co?
It affirmed contract interpretation
What was the relevance of Consolidated-Bathurst Export Ltd v. Mutual Boiler and Machinery Insurance Co?
It set the precedent for contract interpretation
What are the general rules of contract interpretation in Quebec?
Common intention is given precedence over literal meaning (1425)
Nature, formation, usage and prior interpretation must all be considered (1426)
Treat the contract as a whole to determine the meaning (1427)
If an interpretation defeats the intentions of a party and one interpretation suggests the claim should be paid, it is paid (1428-1431)
If there is any doubt, it is interpreted against those that made it (1432)
If anything is illegible or incomprehensible, it is null (1436)
An abusive clause (1437)
What are the eight questions you could ask to analyze the coverage of a property claim?
1) Does the loss fall within the policy period?
2) Has insurable interest in the property been confirmed?
3) What is the proximate cause of the loss?
4) Does the loss fall within the insuring agreement?
5) Do any exclusions or limiting clauses/sub-limits apply? If so, how is coverage affected?
6) Have all policy conditions been met?
7) Does the policy offer any extensions of coverage or do any endorsements apply?
8) Is there a deductible to be applied?
What are the six questions you could ask to analyze the coverage of a liability claim?
1) Does the occurrence fall within the policy period? (occurrence vs claims made)
2) Does the loss fall within the insuring agreement?
3) Are there any exclusions under the policy which apply?
4) Are there limitations or conditions that affect the claim?
5) Does the insurer have a duty to defend? Indemnify? If not, why not?
6) Is there a deductible to apply?
What is the best description of concurrent causation and when it is referred to?
Generally, concurrent causation refers to a situation where at least one peril is covered and one is not. It is then up to the adjuster to review the policy and consider if damages caused by each peril can be separated. Having two perils not covered or two perils covered would not be relevant as the outcomes would be clear.
