Client Update – Protecting the innocent in property insurance: recent amendments to Nova Scotia’s Insurance Act limit “criminal or intentional act” exclusion clauses
Recent amendments to the Nova Scotia Insurance Act are designed “to protect the financial interests of an innocent person when the person’s property is damaged by another person with whom that person shares an insurance policy.”1 The consequences of domestic violence provide the backdrop for these amendments, which came into force on April 18, 2018. The amendments apply to property insurance policies and will primarily impact homeowners’ policies.
As a result of the amendments, policies can no longer exclude coverage for an innocent insured who experiences property loss or damage as a result of their co-insured’s criminal or intentional wrongdoing.
When she announced these amendments to the Insurance Act, Finance Minister Karen Casey noted that they would especially assist women, who are “disproportionately” affected by domestic violence and may suffer property loss or damage at their home as a result.
Nova Scotia is one of several Canadian provinces — including New Brunswick — that have made similar amendments to their insurance legislation.2
Going forward, Nova Scotia property policies will be interpreted in accordance with the new section 13A of the Insurance Act, regardless of how the policy’s exclusion clause governing criminal and intentional acts is worded.
The new section 13A of the Insurance Act provides:
13A (1) Where a contract contains a term or condition excluding coverage for loss or damage to property caused by a criminal or intentional act or omission of an insured or any other person, the exclusion applies only to the claim of a person
(a) whose act or omission caused the loss or damage;
(b) who abetted or colluded in the act or omission;
(i) consented to the act or omission, and
(ii) knew or ought to have known that the act or omission would cause the loss or damage; or
(d) who is not a natural person.
(2) Nothing in subsection (1) allows a person whose property is insured under the contract to recover more than the person’s proportionate interest in the lost or damaged property.
(3) A person whose coverage would be excluded but for subsection (1) shall
(a) co-operate with the insurer in respect of the investigation of the loss, including submitting to an examination under oath if requested by the insurer;
(b) in addition to producing any documents required by the contract, produce for examination, at a reasonable place and time specified by the insurer, all documents in the person’s possession or control that relate to the loss; and
(c) comply with any other requirement prescribed by the regulations.
NOTE: This update provides general information only and is not intended to offer legal advice. If you have specific questions about how the amendments might affect you, please contact the head of our firm-wide Insurance Defence Practice Group, Shelley Wood; Tyana Caplan; or any of Stewart McKelvey’s insurance lawyers in Nova Scotia.
1See the Explanatory Note to Bill 106, as well as “Amendments to the Insurance Act Protect Nova Scotians” (March 29, 2018).
2Donalee Moulton, “New Brunswick amends Insurance Act to better protect victims of domestic violence” in The Lawyer’s Daily (December 27, 2017).
3Insurance Act, RSNS 1989, c 231, as amended by SNS 2018, c 12 (Bill 106). The amendments have not yet been consolidated into the online version of the Insurance Act.
Jennifer Taylor and Bhreagh Ross In the recent Reference re Greenhouse Gas Pollution Pricing Act (“GGPPA Reference”), the judges of the Supreme Court of Canada unanimously agreed that climate change is real and dangerous.…Read More
We are pleased to present the fifth installment of Beyond the border, a publication aimed at providing the latest information to clients about new programs and other immigration-related information that may be pertinent to employers of…Read More
Richard Jordan Is a worker under a contract “of” service or contract “for” service? The former means a worker is an employee whereas the latter means a worker is an independent contractor. The answer to…Read More
Kevin Landry and William Wojcik In September 2020 the Supreme Court of Canada heard Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11, a case featuring appeals from Ontario, Saskatchewan, and Alberta with respect to…Read More
Christopher Marr, TEP and David Slipp Effective March 1, 2021 in all provinces of Canada, other than Ontario and Quebec (to be effective there on July 1, 2021), securities laws related to the distribution of…Read More
Kevin Landry and Emily Murray On March 8, 2021, Health Canada released draft guidance on personal production of cannabis for medical purposes (“Guidance Document”). At present, the Guidance Document is being circulated for public comment for…Read More
Jennifer Taylor The Supreme Court of Nova Scotia has finally provided clarity on the limitation period for third party claims, in Sears v Top O’ the Mountain Apartments Limited, 2021 NSSC 80. This is…Read More
Dante Manna As of today, Newfoundland and Labrador has joined several other jurisdictions with financial hardship unlocking provisions. While the new provisions do not allow direct unlocking from pension plans, and unlocking is not available…Read More