Some policyholders purchase professional fees coverage as an extension to their insurance policy's general coverage grant to reimburse an insured for the expense of hiring professionals to assist in quantifying a loss and putting a claim together to satisfy an insurer's requirements. In a case concerning a fire at a church, Ontario's Superior Court of Justice addressed who controls the decision of whether such professionals will be retained and have their fees covered by the insurance policy.
The Ontario Court of Appeal recently held that an insurer which had defended its insured for 10 months, without a reservation of rights, could not rely on a policy exclusion to withdraw its defence. In this decision, the court did not find it necessary to distinguish between waiver and estoppel. As such, insurers and insureds alike should ensure that they appreciate the potential consequences applicable to both waiver and estoppel and govern themselves accordingly.