Insurer entitled to equitable contribution from another insurer in relation to claim against pharmacist

Insurance law – Commercial general liability insurance – Professional negligence – Multiple policies – Apportionment and contribution – Disputes between insurers – Practice – Leave to Appeal

Northbridge General Insurance Co. v. Aviva Insurance Co., [2022] O.J. No. 3086, 2022 ONCA 519, Ontario Court of Appeal, July 7, 2022, M.L. Benotto, B. Zarnett and L. Sossin JJ.A.

A pharmacist and his employee were defendants in an action involving professional misconduct. Northbridge defended the pharmacist and Aviva defended his employer (the pharmacy). Northbridge settled the claim as against the pharmacist. Aviva did not contribute to the settlement.

Northbridge had issued a professional liability insurance policy to members of the Ontario Pharmacists Association. The pharmacist obtained coverage under this policy. Aviva issued a commercial general liability policy to the pharmacy. This policy included a Pharmacist Professional Liability Endorsement that extended coverage to pharmacists employed with the pharmacy. Both policies included “other insurance” clauses that provided they were excess to any other valid and collectible insurance.

The parties agreed that the doctrine of equitable contribution applies when two policies are irreconcilable – i.e. neither is clearly excess to the other. That is the position Northbridge took. Aviva took the position that the policies could be reconciled and its policy was excess. The Court of Appeal disagreed and dismissed the appeal of the application judge’s order that Aviva contribute equitably to the settlement of the claim against the pharmacist.

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 celder@harpergrey.com.

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