The Defendant Insurer was not entitled to rely upon an Excluded Driver Endorsement to deny coverage as the Endorsement amended the original policy and the Insured did not agree in writing to the amendment, as required by the Ontario Insurance Act

Gore Mutual Insurance Co. v. 1443249 Ontario Ltd. (c.o.b. Enroute Towing), [2004] O.J. No. 712, Ontario Superior Court of Justice

In July 2001, Y was involved in a motor vehicle accident while operating, with consent, a vehicle owned by the Insured. An action was subsequently commenced against Y and the Insured but the Insurer refused to defend on the basis that Y was an excluded driver pursuant to an Excluded Driver Endorsement which had been issued after the original policy. The Insured asserted that the Endorsement was not valid as neither the Insured nor Y signed the required form, they did not have notice of the Endorsement and did not agree to it.

The Court held that the specified form of the Endorsement did not need to be signed by the Insured and the excluded driver in order to be valid. However, in the absence of those signatures on the form, the Insurer bore the onus of proving that the Insured otherwise agreed in writing to amend the contract of insurance as was required under s.124 of the Ontario Insurance Act. The Court held that the Insurer did not provide evidence that the Insured agreed in writing to exclude Y as a driver. As a result, the Endorsement was invalid and the Insurer had a duty to defend Y and the Insured in the overlying action.

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