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ARTICLE · 19 SEPTEMBER 2023

Deny With Care: Insurers Need Solid Evidence In Order To Prove There Has Been A "Material Change In Risk"

CLC (Canadian Litigation Counsel)
Explore more from CLC (Canadian Litigation Counsel)

The Plaintiff insureds, Mr. and Mrs. Smith (the "Smiths"), owned a commercial building in Estevan, Saskatchewan insured with Wynward Insurance Group ("Wynward").

CanadaReal Estate and Construction
Michael Colwell (Brownlee LLP)
Michael Colwell (Brownlee LLP)

A new court decision is required reading for insurers determining whether any "material change in risk" has occurred in their policies.

Background

The Plaintiff insureds, Mr. and Mrs. Smith (the "Smiths"), owned a commercial building in Estevan, Saskatchewan insured with Wynward Insurance Group ("Wynward"). The insureds had leased their premises to an entity which in turn subleased a portion of the building to a motorcycle club. This occurred in 2012 and there was no formal sublease agreement.

In April 2016, a fire damaged the building. The fire was determined to be the result of arson when a plastic jerrycan containing an accelerant was found near a smashed window. The Smiths submitted a claim to Wynward for their losses arising from the fire.

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