A recent Court of Appeal decision, Reeb v. The Guarantee
Company of North America ("Reeb"),i has clarified the limitation period
for commencing duty to defend applications.
Previously, it was commonly thought that the limitation period
for these applications was two years from an insurer's refusal
to defend. Indeed, in 2015, Justice Belobaba stated in
Zochowski v. Security National Insuranceii: "[t]he law is clear that a
clear and unequivocal denial of coverage triggers the two-year
limitation period."
In Reeb, however, the Court of Appeal recently stated
that the duty to defend is an ongoing obligation to be applied on a
"rolling" basis. In other words, even more than two years
following a denial of coverage, a duty to defend application can be
brought.
