Amendments To Article 2503 C.C.Q.: Revolutionizing Insurance In Quebec

Introduction

The Quebec insurance industry has always been distinct from other Canadian provinces because Quebec insurers are legally required to take up the defence of their insureds and to cover the entire cost of their defence, even in excess of policy limits. These principles set out in arts. 2500 and 2503 of the Civil Code of Quebec are a matter of public policy and are therefore non-derogable,¹ unlike in the common law provinces where the duty to defend is contractual.²

To this date, the courts have applied this article very strictly and have confirmed in several judgments the importance given to the duty to defend by the Quebec legislature.

For example, in 2015, the Superior Court ruled that an insurer had a duty to defend despite the existence of a clause stating that the insurer only assumed defence costs, with no duty to defend.³ In 2013, the Court of Appeal reiterated that the duty to defend is mandatory and distinct and concluded that an excess