It Says What It Says: Pre-Tender Defence Costs Should Not Be Covered Under The Policy

The British Columbia Court of Appeal has now set the record straight about pre-tender defence costs:  If a policy expressly states that an insured must not incur expenses without the insurer's consent, then the insured will not be entitled to reimbursement for any expenses that were incurred on its behalf prior to notifying the insurer of a claim¹.

In June 2012, the U.S. affiliates of Blue Mountain Log Sales Ltd. ("Blue Mountain") were involved in litigation in Washington State. On August 29, 2013, Blue Mountain tendered the claim to Evanston Insurance Company. On October 25, 2013, Evanston agreed to defend the affiliates, subject to a reservation of rights, and retained defence counsel. Subsequently, the claimants added Blue Mountain and its principal, Scott Clarke (collectively, the "Clarke Group"), as defendants to the proceeding.