By
FSP of Robinson Sheppard Shapiro
After missing the net on his first attempt, the Minister of Finance has scored a goal with his second effort at drafting regulations identifying liability insurance contracts that are exempt from Quebec’s public order “defense in addition to limits” requirement.
Overview
On May 5, 2022, a revised, long-overdue regulation [Regulation][1] will come into force that exempts certain categories of Quebec liability insurance contracts issued to designated classes of insureds from the Civil Code of Quebec’s [CCQ] public order requirement that the liability insurer is responsible for defence costs in addition to the insurance policy’s indemnity limits. As discussed in our September 10, 2021 bulletin, public order article 2500 CCQ mandates that a liability insurance policy’s limits must be used solely to pay the claims of injured third-parties (i.e. the claimants). Public order article 2503 CCQ mandates that a) the liability insurer must actively take up the defense of the insured in respect of covered claims, and b) the liability insurer must pay defence expense, interest and third-party costs in addition to policy limits.
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