Defence Costs Shared

In a decision released July 2, 2008, Justice Cummings of the Superior Court of Justice Ontario held that the defence costs incurred by an insured are to be shared on a 50/50 basis between the primary insurer and the excess liability insurer.

In the case of St. Mary’s Cement Company Inc. (Applicant) and ACE INA Insurance (Respondent) St. Mary’s applied for an interpretation of the insurance policy issued by ACE INA Insurance.  St. Mary’s sought a declaration that ACE, the excess liability insurer, has a legal obligation to contribute to St. Mary’s legal costs associated with defending some 18 court actions arising from the supply of allegedly defective concrete which resulted in extensive property damage to residential premises.  The total damages claimed in respect of these actions are in excess of $27 million.

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Click here for the hyper-link of the case…