In the realm of liability insurance, the goal is to protect the insured against the financial consequences of damages caused to others. Article 2396 of the Civil Code of Quebec outlines the principles, but a fundamental aspect that is often overlooked is the insurer's obligation to defend the insured against any claim that could result in a judgment covered by the insurance policy. This obligation is found in Article 2503 of the Civil Code of Quebec, yet it remains frequently ignored.

What is the Duty to Defend?

The insurer's duty to defend, also referred to as the "Wellington-type Motion," is a fundamental principle in insurance law. Unlike the duty to indemnify, which only comes into effect after a final judgment, the duty to defend applies as soon as a claim is made, even before any evidence is presented. In other words, as long as there is a possibility that the claim could be covered by the insurance policy, the insurer is obligated to defend the insured, regardless of the truth of the allegations at this early stage. This obligation also includes covering the legal costs associated with defending the insured.

Defense vs. Indemnification: What’s the Difference?

It’s crucial to distinguish between two important concepts: the duty to defend and the duty to indemnify.

• The duty to defend involves covering the legal fees for the defense, even before evidence is presented.
• The duty to indemnify, on the other hand, only arises once a judgment is rendered or the case is settled. The insurer then determines whether the claim is actually covered under the insurance policy.

Recent Jurisprudential Analysis of the Duty to Defend

Recent rulings, particularly in the Intact Insurance case, Desjardins Assurances, and the Promutuel vs. Chartrand case, shed light on important principles clarifying the application of the duty to defend. Here are a few key takeaways from the jurisprudence:

1.    Intact Insurance Company c. Hydromec inc., 2025 QCCA 143 (CanLII)

In this case, the Court of Appeal reviewed the request of an insurance company (Intact) contesting its responsibility to defend another company (Hydromec) in a claim for indemnification. The insurer argued that the specific exclusion clause in the policy justified their refusal to defend.

• Clarity and Evidence Requirement: The Court reaffirmed that before an insurer can escape its duty to defend, it must clearly and unequivocally prove that the situation falls under a specific exclusion of the policy.

• Duty to Defend: Even if there are doubts regarding the exact coverage, as long as the issue is not definitively resolved, the insurer is required to defend the insured. This illustrates the application of the principle that the duty to defend remains strong at the early stages of the process.

2.    Desjardins Assurances générales inc. c. Arseneault Toitures inc., 2024 QCCS 4894

In this case, the Superior Court addressed Arseneault’s Wellington-type request to compel its insurer, AIG, to defend its interests in a dispute concerning work done by Arseneault that allegedly caused a fire.

• Examination of the Exclusion Clause: AIG relied on an exclusion clause in the policy, arguing that the conditions had not been met by Arseneault. However, the Court ruled that it was premature to decide on the applicability of this exclusion at such an early stage in the case.

• Ongoing Defense: In the absence of clear and irrefutable evidence of the exclusion, AIG was ordered to assume the defense of its insured. This decision illustrates a protective approach for the insured at the early stages, where the coverage question has not yet been settled.

• Choice of Lawyer: If there is a breakdown in the relationship of trust with the lawyer initially assigned by the insurer, the insured has the right to choose their own lawyer, with the insurer bearing the associated costs. This principle reinforces the protection of the insured’s interests by ensuring they can be represented by someone they trust.

Important Considerations from Jurisprudence

Recent decisions confirm several key principles regarding the duty to defend:

• Judicial Caution: Courts tend to favor defending the insured unless the insurer can irrefutably prove that the situation does not fall under the coverage of the policy, particularly through a clearly applicable exclusion clause.

• Insured-Favorable Approach: The jurisprudence emphasizes the principle that as long as the coverage issue is unresolved, the insurer must defend the insured, even if possible exclusions are raised.

• Role of the Lawyer: If there is a breakdown in the trust with the lawyer appointed by the insurer, the insured has the right to choose a new lawyer, highlighting the importance of the relationship of trust in legal defense.

Conclusion: What to Do if Your Insurer Refuses to Defend You

If your insurer refuses to defend your interests in a liability case, it is crucial to consult with a specialized lawyer. A Wellington-type Motion might be the solution to compel the insurer to fulfill its duty to defend, as shown by the analysis of recent cases such as Insurance Company c. Hydromec Inc. (2025) and Desjardins Assurances Générales Inc. c. Arseneault Toitures Inc. (2024).

Remember, the duty to defend does not depend on the veracity of the allegations but only on the possibility of insurance coverage. If you are facing a similar situation, contact ASC Avocat Flex as soon as possible to protect your rights.