An Insurer Does Not Have a Good Faith Duty to Advise Insured of a Limitation Period
Date Case Heard: February 24, 2017 | Full Decision [PDF]
In this decision, the Court of Appeal held that, absent a statutory requirement, an insurer has no duty to advise its insureds of a limitation period.
This case involved an eavestrough installer who was seriously injured when he fell from a roof while working. His disability insurer paid long-term disability benefits for 24 months before terminating his benefits in November, 2011.
The termination letter advised the insured that if he disagreed with the insurer’s decision, he must submit further medical records. The letter did not advise the insured of the limitation period to commence a claim following the termination of his benefits.
The insured did not contact a lawyer until early 2015 and did not commence a claim until April, 2015.
The insurer brought a summary judgment motion to dismiss the insured’s action on the basis that it was time barred by the Limitations Act. The motion judge granted summary judgment and dismissed the insured’s claim as statute-barred. The insured appealed.
On appeal, the insured argued that the insurer’s duty of good faith required the insurer to advise him of the running limitation period to commence a claim. He further argued that, in failing to advise him of the limitation period, the insurer was precluded from relying on a limitations defence.
The Court of Appeal dismissed the appeal. While it was recognized that the insurer owed the insured a duty of good faith, the Court found that this did not amount to a fiduciary duty. The Court was reluctant to extend the duty of good faith to include a positive duty to inform the insured of a running limitation period. The Court held that the insurer had no duty “to disclose information outside the policy – namely, the existence of a limitation period.”
The Court further observed that while some provinces have imposed a statutory obligation on insurers to give notice of a limitation period, there is no such requirement in Ontario. The Court ultimately held that it should be left up to the legislature to impose such a requirement.
Lawyers on behalf of the Appellant: Daniel J. Fife and Maple Anne Cameron
Lawyer on behalf of the Respondent: Vincent Genova
Read the full decision [PDF]
