Insurance duty to defend you

If you have done something illegal then does your insurance still provide you with a defense? The insurance answer is, yes. The duty of the insurance company to defend is broader then the duty to indemnify is the finding of the Ontario Superior Court.

Ontario Superior Court Justice Thea Herman stated "The duty to defend is broader than the duty to indemnify", when ruling in Coakley v. Allstate Insurance Company of Canada. "While the duty to indemnify may depend on the judgment obtained in the action, the duty to defend arises when the claim is made and depends on the nature of the claim, not on the final outcome."

An altercation between Raymond Graham and Scott Coakley resulted in serious injuries for Graham. Graham sued the Scott Coakley for $2.5 million. Coakley was charged with assault resulting in bodily harm. Coakley pleaded that he acted in self-defense and that Graham was actually at fault. Coakley made a claim against Allstate Insurance to indemnify him for the money found to be owing to Graham.

Allstate responded by denying coverage and a duty to defend. Allstate stated that the policy did not respond to “bodily injury or property damage caused intentionally by or at your direction or resulting from your criminal acts or omissions.” The lawyers from Allstate made a summary judgment motion to dismiss the claim stating that there was no genuine issue for trial.

The motions judge ruled against the motion, declaring that there was “too much controversy in the evidence as to whether or not Mr. Coakley’s acts were negligent or intentional,” therefore the issues could not be determined in a motion for summary judgment. In addition the motions judge found that the insurer had a duty to defend Coakley and indemnify him in the event of a ioss.

When Allstate Insurance appealed to the Superior Court the decision of the motions judge was upheld. The Superior Court said that the duty to defend, "arises from Mr. Graham’s claim, not from the judgment in the case."