Dispute resolution process under Statutory Condition 11 as to value of insured property is mandatory and agreements reached pursuant to process not subject to review by court

Insurance law – Property insurance – Valuation of property – Good faith – Duties and liabilities of insured

Oraniewicz v. Intact Insurance Co., [2023] B.C.J. No. 470, 2023 BCSC 400, British Columbia Supreme Court, March 16, 2023, D.K. Hori J.

The insured owned and operated a restaurant and hotel in Kimberly, British Columbia. The insurer issued a policy of insurance that included indemnification of business losses sustained as a result of fire. A fire caused damage to the premises and the insured sought indemnity under the policy.

A dispute arose between insured and insurer with respect to amounts payable under the policy. The insurer triggered the mandatory dispute resolution procedure to decide the value of the loss. Following that procedure, an agreement was reached that valued the insured’s claim. By the time of that agreement, the insurer had paid out more for the loss than the agreed upon value.

The insured brought a claim against the insurer challenging the values established during dispute resolution, alleging that the mortgagee had been overpaid, that the insurer had caused delay in resolving the claim thereby increasing the loss, and that the insurer had breached its duty of good faith and fair dealing.

Following a trial the court dismissed the insured’s claims. The court found the dispute resolution procedure was binding and the valuation of the loss could not be set aside. The court did not find any merit in any of the insured’s other claims.

This case was digested by Cameron B. Elder, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Cameron B. Elder at [email protected].

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