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The Duty to Defend

Date Posted:

March 1, 2013

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    Your car insurance policy requires your insurer to hire a lawyer to defend you if you are sued.  But what if your insurer offers to pay your liability limits and then walk away?  In a recent case that’s exactly what happened. Mr. Malaviya had chosen to have just the minimum amount of car insurance you can ($200,000).  He was involved in an accident and was sued for more than $200,000.   His insurer offered to pay the $200,000 to the plaintiffs in the lawsuit and asked the Court to declare that it had no further duty to defend him. The application was dismissed because the Insurance Act does not say that an insurer must only bear the cost of defending an insured only up to the liability limit.

    If you are sued for an amount in excess of your policy limit it is important to consult your own lawyer, even if your insurer has appointed a lawyer for you.

    See Jevco Insurance Co. v. Malaviya, 2013 ONSC 675.

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