When is a Marine Insurer Estopped from Denying Coverage?
A boat is insured with Aviva, the boat is involved in a collision with its lights off resulting in several deaths, litigation ensures, and after a lengthy delay Aviva denies coverage and seeks a declaration from the Court to that effect. These were the facts before the Court in Elite Insurance Company (Aviva) v. Borgatti Estate , 2025 FC 1471. Ultimately, Justice Southcott rejected Aviva’s motion and granted summary judgement in favour of the boat owners on the basis that Aviva was estopped from denying coverage because it sent its reservation of rights letter long after it suspected a breach of warranty and after it made payments under the policy. The case offers a helpful overview of the law pertaining to estoppel and a reminder that: " when a claim is presented to an insurer and its investigation of the facts giving rise to the claim indicates that coverage is questionable, the insurer should advise the insured at once and, in the absence of a non-waiver agreement or an ad...
