Construction is a risky business. Having the right insurance in
place is therefore essential for everybody engaged in the
process. It is also critical that you understand the basic operation of
your insurance policies and have some understanding of the
legislation that governs insurance. Insurance in Canada, is governed by provincial insurance acts
that lay out ground rules for insurers. In B.C., we have a new Insurance Act that you should be aware
of. The new act is the result of a 2003 decision of the Supreme
Court of Canada in which the Court described B.C.'s Insurance
Act as an "outmoded" statute that lead to
"unproductive, wasteful litigation about
technicalities". The court urged the B.C. Legislature to rectify this situation
by amending the act. In 2009, the legislature got around to doing so and in July of
this year the new B.C. Insurance Act became law. Here are 10 things you should know about the new Insurance
Act. Two years is the new norm for actions for insurance coverage
from the date the insured knew or ought to have known the loss or
damage occurred or, in the case of a liability policy, from the
date the cause of action against the insurer arose. Insurers must give notice of the applicable limitation period
within five business days of denying liability or within 10
business days after the first anniversary of the date the insurer
receives a claim. A denial of coverage on the basis of an exclusion clause, even
where that exclusion clause is material to the risk insured
against, may not be binding if, at a later date, a court determines
that it is either unreasonable or unjust. Where there is more than one insured person under a policy, an
intentional or criminal act may not exclude coverage for all
insured persons. The act now provides for "proportional" coverage for
innocent insureds up to the value of the innocent insureds interest
in the property. The only exclusions allowed in fire policies are those
exclusions specifically detailed in the regulations to the new
act. Insurance policies issued by insurers must be in accordance with
the written or oral application by the insured unless the insurer
immediately gives notice to the insured in writing of any
differences between the application or the proposal and the policy.
Disputes between insurers and insureds, including coverage
disputes, can be resolved by way of a dispute resolution process
contemplated in the act. The service of most documents can be done electronically
however, this provision does not apply with respect to an
insurer's notice terminating a contract under either a
statutory condition or for non-payment of premiums. In those circumstances, service of documents is to be done
personally or by registered mail. There is a 30 day grace period now mandated for payment of
overdue premiums on life and health insurance contracts. There is a new "cooling off period" which allows a
person who purchases a life or accident and sickness policy to
rescind it within 10 days from the date of receiving the
policy. Keep in mind that the Insurance Act contains the background
rules under which insurance operates. To fully understand your rights under a policy you need to read
its terms and seek advice from your insurance professional or legal
counsel. Insurance is only boring until you need it. Previously published on joconl.com The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
ARTICLE
13 December 2012
Ten Things To Know About The New Insurance Act
Construction is a risky business. Having the right insurance in place is therefore essential for everybody engaged in the process.