Insurers required to defend Province of Ontario based on a time-on-risk allocation of defence costs in claims against Ontario relating to allegations of negligent design, construction and maintenance of a bridge.

Insurers required to defend Province of Ontario based on a time-on-risk allocation of defence costs in claims against Ontario relating to allegations of negligent design, construction and maintenance of a bridge.

Insurance law – Commercial general liability insurance – Duty to defend – Exclusions – Property damage – Interpretation of policy; Multiple policies – Apportionment of defence costs; Duties and liabilities of insurer.

Ontario (Minister of Transportation) v. Royal & Sun Alliance Insurance Co. of Canada, [2025] O.J. No. 4458, Ontario Superior Court of Justice, October 6, 2025, L. Brownstone J.

The Province of Ontario brought an application seeking declarations with respect to their insurers’ duty to defend in respect to two lawsuits arising out of the collapse of a bridge.

When the bridge collapsed, Ontario was sued by the county where the bridge was located and to whom ownership of the bridge had been transferred.  Ontario was also sued by the owners and operators of a dump truck that was on the bridge at the time of the collapse.

Ontario sought an order that the two insurers who were on risk from the time of construction to the time of transfer to the county were on risk and ought to defend Ontario and fund the defence.

The two insurers, Aviva and RSA, denied a duty to defend and, in the alternative, if they were required to defend, argued that defence costs ought to be allocated on a time-on-risk basis. In the further alternative, the two insurers sought an order that two additional insurers, AIG and St. Paul Fire and Marine, contribute equitably to defence costs if the court ordered them to share Ontario’s defence costs equally.  AIG and St. Paul Fire and Marine issued road liability and commercial general liability policies to Ontario for a number of years after the design and construction of the bridge.  Aviva and RSA also issued commercial general liability policies to Ontario for some of the years following the design and construction of the bridge. 

The court held that Aviva and RSA had a duty to defend Ontario.  The court held that the nature of the claim against Ontario was negligence in respect to the design, construction, and maintenance of the bridge, resulting in property damage and loss of use.  The court held that on the pleadings, the damage was alleged to have occurred from the time of construction and during the time that the Aviva and RSA policies were in force.  The court held there was no applicable exclusion clauses.  The court held that the insurers were required to fund Ontario’s defence on a time-on-risk basis and that Ontario would be required to fund its defence for the time when it was self insured. Because of this holding, AIG and St. Paul Fire and Marine were not required to contribute to defence costs because the court did not apply an “all-sums” approach to the allocation of defence costs. 

This case was digested by Cameron B. Elder and edited by Steven W. Abramson of Harper Grey LLP.  If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected].