Insurance law – Credit insurance – Interpretation of policy – Contra proferentum rule
908593 Ontario Ltd. (c.o.b. Eagle Travel Plaza) (Court appointed receiver of) v. Atradius Credito Y Caucion S.A. de Segyros Y Reaseguros,  O.J. No. 1932, 2022 ONSC 2517, Ontario Superior Court of Justice, April 15, 2022, B.A. Conway J.
The insured carried on the business of fuel and fleet service provision. It procured a credit risk insurance policy from the insurer. The insured went into bankruptcy and receivership. The receiver made a claim under the policy.
The insured sought indemnity for millions of dollars in outstanding accounts receivables relating to non-payment for fuel and other purchases. The insurer’s position was that the policy contained an aggregate limit that limits the insurer’s liability to $100,000.
Under the policy the insurer covered “Insured Receivables” provided there was a valid “Credit Limit” established for the buyer. The “Credit Limit” had to be approved by the insurer or set by the insured up to a maximum of $50,000. However, when the insured establishes discretionary limits, the maximum liability of the insurer in respect of such buyers is $100,000 per insurance year.
The court concluded the insurer’s maximum liability was $100,000 in respect to all buyers.
This case was digested by Cameron B. Elder, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Cameron B. Elder at email@example.com.
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