On the hook for a crook: Broker liable for part of fraudster’s fraud based on failure to place adequate crime coverage

Reprinted with permission from the Insurance Brokers Association of Alberta’s magazine – The Alberta Broker (January 2020)

Over a period of six years, Elaine Badry stole over $500,000 from her employer, Duraguard Fence Ltd. (“Duraguard”).  Bit by bit, the ‘well-liked’ employee processed numerous fraudulent refund transactions into accounts that she held or controlled.[1]  When her employer discovered her scheme, Ms. Badry was charged and convicted with fraud.  She was sentenced to three years in jail, and the Court ordered her to pay $250,000 in restitution. 

In response to its loss, Duraguard started a lawsuit.  In addition to naming Ms.

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Accident benefit disputes are subject to the discoverability principle: Tomec v Economical Mutual Insurance Company, 2019 ONCA 882

The Ontario Court of Appeal in Tomec v Economical Mutual Insurance Company, 2019 ONCA 882, applied the reasoning of the Supreme Court of Canada (SCC) in Pioneer Corp v Godfrey, 2019 SCC 42, to conclude that the discoverability principle applies to statutory accident benefits. What this means for insurers is that they may be required to pay accident benefits past the limitation period articulated in the statute.

Relevant facts

On September 12, 2008, the appellant, a pedestrian, was struck by a motor vehicle. After the accident, the appellant applied to her insurer for attendant care benefits and housekeeping benefits pursuant to s.

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Bad faith does not trump jurisdiction in SABs disputes

The Court of Appeal for Ontario recently rendered a unanimous decision upholding the broad jurisdiction of the Licence Appeal Tribunal (LAT) to resolve disputes “in respect of an insured person’s entitlement to statutory accident benefits (SABs) or in respect of the amount of SABs to which an insured person is entitled” under Section 280 of the Insurance Act.

In Stegenga v Economical Mutual Insurance Company 2019 ONCA 615, the Court heard the Plaintiff’s appeal of a motion in which her Statement of Claim was struck, as the LAT had exclusive jurisdiction to decide the claim at first instance. The Plaintiff claimed punitive and exemplary damages allegedly as a result of the insurance company’s breach of good faith in failing to inform the Plaintiff that her injuries could be qualified as catastrophic impairment.

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Importance of early due diligence and promptness: Analysis of the decision in Commonwell v Campbell, 2019 ONCA 668


In April 2013, the respondent, Shayne Campbell, was involved in a dirt bike accident. He collided with an ATV (all-terrain vehicle), injuring the ATV driver. In April 2015, Mr. Campbell was sued for negligence.

Mr. Campbell’s automobile insurer, The Guarantee Company of North America (Guarantee), had Mr. Campbell sign a non-waiver agreement and issued a reservation of rights letter before ultimately denying coverage.

The appellant, Commonwell Mutual Insurance Group (Commonwell), held Mr. Campbell’s homeowner’s policy. In June 2015, without securing a non-waiver agreement or issuing a reservation of rights letter, Commonwell appointed a lawyer to defend the claim against Mr.

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Cannabis exclusion in home insurance policies may not be effective when tenants’ grow-op causes loss

Despite the efforts of insurers to exclude coverage in habitational insurance policies for losses caused by cannabis cultivation or production, a recent Alberta case serves as a reminder that coverage may, nevertheless, apply where an insured’s tenant’s grow-op causes a loss.[1] This is due to the existence of so-called “innocent insured” provisions in the Insurance Acts of Alberta, British Columbia and Manitoba.


Home insurance policies have traditionally excluded coverage for losses caused by illegal activities. Many have also specifically excluded coverage for losses arising from illegal drug activity. With the Cannabis Act having come into force on October 17, 2018, Canadians may now legally cultivate up to four cannabis plants at a time in their dwelling-house.

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Cyber Insurance and D&O Liability


In the past decade, there have been several reports of cybersecurity attacks and data breaches to large corporations.1 In many cases, those affected by the breach want to hold the directors and officers accountable, as they feel the corporation failed to implement the proper security measures to prevent a breach from happening or did not effectively handle the aftermath of the breach. However, directors and officers generally enjoy limited personal liability subject to a few exceptions.2 Nevertheless, as more specific guidance emerges for directors and officers handling cybersecurity issues, the scope of this liability may widen.3 Thus, directors and officers should not take comfort in the substantial barriers that prevent them from being held liable for issues relating to the organization.

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Court dismisses statutory misrepresentation claim against credit union board in landmark decision

For the first time, the Ontario Superior Court of Justice released a decision that considered issues of statutory misrepresentation in an offering statement under the Credit Unions and Caisses Populaires Act, 1994[1] (Act). Polla v. Croatian (Toronto) Credit Union also provides extensive guidance on issues of directors’ and officers’ liability more generally. There is very limited jurisprudence in this area, and this landmark decision is expected to provide valuable guidance to boards and insurers on risk prevention. This insight provides a high-level overview of the decision.


The plaintiff, Ferdinando Polla (Polla), invested CA1 $5 million in the Croatian Credit Union (CCU) after the struggling credit union filed an offering statement in order to raise funds.

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