In Monteith & Sutherland v Novex Insurance, 2025 ONSC 4697, the Superior Court clarified that professional liability insurers cannot rely on technicalities to avoid coverage under a policy. Justice Chang held the insurer liable to indemnify a land surveyor company for the full amount of a $3.2 million settlement, and rejected the argument that coverage was unavailable due to timing of notice or alleged lack of cooperation.
Background
The applicant, a land surveyor firm, carried mandatory professional liability insurance under a master policy. In 2022, it was retained for a wastewater project in Halton Hills, where Earth Boring later alleged deficient work (the “Halton Claim”). The claim was reported to the insurer in July 2022, around the same time that a separate $5 million claim (the “Port Lands Claim”) was paid out. Although both claims were settled, the insurer refused to cover the $3.2 million Halton Claim settlement, leading to this application before the court.
The Decision / Arguments Put Forward
Justice Chang ruled firmly in favour of the insured:
- The insurer argued that blame lay with the surveyor’s separate engineering insurer, which allegedly displaced the coverage. The court found that the Halton Claim clearly fell within the scope of professional services covered under the policy.
- The insurer argued that the claim fell into the later policy year (with only $1 million left in coverage). The court held that notice was first received during the earlier policy period, meaning the full limits were available to fund the Halton Claim settlement.
- The insurer alleged the surveyor failed to cooperate in the defence of the claim. The court disagreed, finding that the insurer had been kept informed, had participated in the litigation process, and could show no prejudice.
- In addition to ordering indemnification for the $3.2 million settlement, the court awarded the surveyor $75,000 in costs.
Take Away
This decision reinforces that Ontario courts will hold insurers to the plain language of their policies. For professionals and businesses, the takeaway is clear: coverage is broad, and if a claim stems from your professional services, insurers can’t easily dodge liability. Timely notice remains important, but courts may use curative provisions to stop insurers from unfairly denying claims. Finally, while cooperation with insurers is required, they can’t rely on minor technicalities to avoid providing coverage.
Arian Aria is an Articling Student at ZTGH and author of this blog. If you have a question about this decision, please contact Arian at [email protected].
