An insurance contract only insures property that the insurance company is advised of at the time that the insurance is purchased

Statement of Values filled out after the completion of an application for insurance did not form part of the insured’s policy of insurance.

Sunburst Skylight Ltd. v. Lloyd’s Underwriters, Lloyd’s, London,  [2010] B.C.J. No. 963, May 20, 2010, British Columbia Supreme Court, P.G. Voith J.

The Insured sought indemnity under a property insurance policy.  The Insured and the Insurer disagreed on whether various provisions of the policy and a Statement of Values signed by the Insured, but not expressly incorporated into the policy, limited the recovery of the Insured.  The Insured sought a declaration that it was owed the unpaid balance of its claim.

The Insured filled out the Statement of Values after it had already applied for insurance.  Effectively, the Statement of Values assigned value to the property insured by the policy.  The Insurer sought to limit its liability to the Insured based on this Statement of Values.  Ultimately, the Court found that the Statement of Values was not part of the contract and therefore, the Insurer’s liability to the Insured would be determined by reference to the policy.  In the result, the Insured was successful.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP.

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