Canadian Underwriter

Correction: Sovereign General Insurance not entitled to void policy in B.C. wine collection case

January 11, 2008   by Canadian Underwriter

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Yesterday, Canadian Underwriter reported that the B.C. Supreme Court ordered Sovereign General Insurance in December to pay its half of a Cdn$$2.3-million policy to a couple who lost their multi-million dollar wine collection due to a sewer back-up. This was incorrect.
In fact, the issue in question was whether the B.C. Supreme Court would allow Sovereign to void the policy back to inception based on misrepresentation.
The Court rejected Sovereign’s “18A” summary dismissal application, meaning it did not agree that Sovereign had grounds to void the policy. There was no settlement award and there remain a number of outstanding issues to be determined on the claim including, but not limited to, quantum.
Soveriegn has not yet decided whether it will appeal the decision.
The case concerned a rare and expensive wine collection containing more than 8,000 bottles owned by Ralph and Diane Wells including 50 cases of Chateaux Mouton Rothschild, dating from 1945 to 1995 that was ruined after a municipal sewer back up on Oct.16, 2003.
The couple made a claim under their homeowners’ insurance policy.
Sovereign claimed it was not liable to pay, arguing before court that it had never been informed of the value of the collection.

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