When denying coverage based on fraud, an insurer should be clear
the Ontario Superior Court of Justice has ruled. What's more,
the ruling suggests that claims of dishonest or intentional acts by
the insured must be spelled out at an early stage in the
proceedings. At a minimum, the insurer should clarify its position
as early as possible or run the risk of exposing itself to punitive
damages.
The facts
In Demetriou v. AIG Insurance Co. of
Canada, the plaintiff James Demetriou claimed he had been
robbed of a $550,000 heirloom ring and a gold chain while on the
beach in the Dominican Republic. Shortly before trip, he had added
the ring to his insurance policy. He reported the theft to local
law enforcement and, back home in Toronto, to the police and his
insurer.
