In settling three actions by paying out an entire policy limit
pro rata, an insurer was taking the risk it would later be found
liable for further claims up to that same limit. That was the
lesson learned in the Ontario Superior Court ruling in Scale Estate
v. The Cooperators General Insurance Company.
Insurers in the province should
accordingly be wary of privately settling claims with parties
injured or killed in automobile accidents without having first
ensured that no other claims will be initiated.
The case dates to a 2006 automobile accident,
in which three people were injured and three people killed,
including the driver. The driver's vehicle was insured
with the defendant insurer under a standard automobile
policy with $1 million in third-party liability insurance limits.
Three actions, none of which were initiated by the plaintiffs, were
brought with notice against the driver's estate as a result of
the accident. Though the insurer's adjuster reached out
