In 2024, Ontario’s top court revisited an insurer’s duty to defend its insured when multiple policies are available to respond. The Ontario Court of Appeal (“ONCA”) reviewed the role of non-concurrent insurers and pushed back on coverage overreach. Two recent decisions – Loblaw Companies Limited v. Royal & Sun Alliance Insurance Company of Canada and Live Nation Ontario Concerts GP, Inc. v. Aviva Insurance Company of Canada – were released within months of each other and, although factually distinct, share some common themes. The two cases emphasize the primacy of pleadings, the inviolability of policy structures (such as self-insured retentions), and the limits on equitable contribution among insurers.
At their core, both cases tackle two insurance law questions: who actually has to defend, and what are the defending insurer’s obligations?
I. Tightening the Duty to Defend
(i). The Pleadings Rule
In Live Nation, a concertgoer sued Live Nation Ontario Concerts GP, Inc. (“Live Nation”) after being injured by security staff employed by NorthWest Protection Services Ltd. (“NorthWest”), a contract security company retained by Live Nation.
NorthWest’s security services agreement required it to procure and maintain Commercial General Liability (“CGL”) insurance coverage, naming Live Nation as additional insured on the certificate of insurance under a policy with Aviva Insurance Company of Canada (“Aviva”) (the “Aviva Policy”). Although Live Nation had a policy with Starr Indemnity & Liability Company (“Starr”), it had a self-insured retention of one million dollars that had to be exhausted before Starr’s duty to defend and pay defence costs was triggered.