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Insurance - Policy Contains All Terms [IA s.124(1)]. SIR Corp. v. Aviva Insurance Company of Canada
In SIR Corp. v. Aviva Insurance Company of Canada (Ont CA, 2023) the Court of Appeal considers the 'policy contains all terms' provision of the Insurance Act [s.124(1): 'Requirement for all terms to be set out in policy; relevance of proposal, etc. - Terms, etc., of contracts invalid unless set out in full'], here as it relates to insurance policy interpretation:[54] The Binder was prepared by SIR’s insurance broker, who acted as SIR’s agent and negotiated the policy that replaced the Binder. While not part of the Policy, the Binder is clearly part of the factual matrix: Lloyds Syndicate 1221 (Millennium Syndicate) v. Coventree Inc., 2012 ONCA 341, 291 O.A.C. 178, at para. 29, leave to appeal refused, [2012] S.C.C.A. No. 276. Indeed, in its supplementary factum below, SIR relied on the Binder as forming part of the factual matrix and setting out a summary of the terms of the Policy. Significantly, the language used in clause 1 of Section II is virtually identical to the language in the Binder describing “Perils Insured” as “All Risks of Direct Physical Loss or Damage (except as excluded)”.
[55] Contrary to SIR’s submission, relying on the Binder to interpret the coverage afforded under the Policy is not contrary to s. 124(1) of the Insurance Act, R.S.O. 1990, c. I.8. That section provides:124(1) All the terms and conditions of the contract of insurance shall be set out in full in the policy or by writing securely attached to it when issued, and, unless so set out, no term of the contract or condition, stipulation, warranty or proviso modifying or impairing its effect is valid or admissible in evidence to the prejudice of the insured or beneficiary. [56] The purpose of s. 124 is to protect an insured from unilateral changes to an insurance policy: Sagl v. Chubb Insurance Company of Canada, 2009 ONCA 388, 249 O.A.C. 234, at para. 68, leave to appeal refused, [2009] S.C.C.A. No. 303. Here, I consider the Binder to interpret the Policy, not to modify or impair its effect. As Sattva instructs, the factual matrix is to be “used as an interpretive aid for determining the meaning of the written words chosen by the parties, not to change or overrule the meaning of those words”: at para. 60.
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