Void for misrepresentation despite the insurer knowing about the misrepresentation upheld on appeal

The insurer’s decision to void the policy for misrepresentation was upheld on appeal despite the insurer being aware of the misrepresentation and conditionally renewing the policy before voiding it.

Insurance law — Liability insurance — Additional named insured — Misrepresentation in obtaining insurance — Estoppel — void Ab Initio; Duties and liabilities of insurer; Practice – Appeal.

Kashin v. G.E.S. Construction Ltd., [2025] O.J. No. 2051, Ontario Court of Appeal, May 7, 2025, G. Huscroft, J.C. George and L.G. Favreau JJ.A.

The insured misrepresented the nature of its business on its application for insurance. While investigating a loss, and with knowledge of the misrepresentation, the insurer conditionally renewed the policy and accepted premiums for the renewal. The lower court concluded that the insurer was not precluded by waiver or estoppel from subsequently voiding the policy and the renewal because the insurer had clearly communicated the coverage issue to the insured at the outset of the investigation and had communicated that the renewal was conditional on the insured withdrawing the claim.

On appeal, the insured argued that the lower court erred in: one, failing to find that the insurer had waived its right to void the policy; two, failing to find that the insurer was estopped from voiding the policy; and, three, failing to address the pressure placed on the insured by the insurer to withdraw its claim for coverage.

The Court of Appeal dismissed the appeal without calling on the insurer to make submissions. The court held that the lower court had applied the correct test for waiver and was entitled to determine that, although its timing was not perfect, the insurer had not waived its right to void the policy. Further, the court held that the lower court’s determination that the insurer was not estopped from voiding the policy because there was no evidence that the insured failed to take certain steps and no evidence of detrimental reliance were findings available on the record before the lower court and entitled to deference. Finally, the court held that there was no merit to the submission that the insured had been pressured to withdraw its claim.

This case was digested by Michael J. Robinson 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].