A nearly 20-year insurer-versus-insurer battle ended with Chubb on the hook for the full cost of a catastrophic injury claim.
In a decision filed on April 30, 2026, the Ontario Court of Appeal ruled that Chubb Insurance Company of Canada must bear permanent responsibility for all statutory accident benefits owed to an injured claimant - reversing a lower court decision that had split the tab equally between Chubb and Zurich Insurance Company.
The case - Chubb Insurance Company of Canada v. Zurich Insurance Company, 2026 ONCA 302 - traces back to a September 2006 single-vehicle accident involving Sukhvinder Singh, who was driving a rental car from Wheels 4 Rent. The vehicle was covered under a motor vehicle liability policy issued by Zurich. Chubb had a separate policy with Wheels 4 Rent covering optional accidental death and dismemberment insurance, which Ms. Singh never purchased.
When Ms. Singh's lawyer filed an application for accident benefits with Chubb in November 2006, Chubb denied it outright, responding that its policy was "not a personal automobile policy and thus the coverage of Ontario Statutory Accident Benefits does not apply." Chubb did not investigate who the correct insurer was and made no effort to notify Zurich. It took a year and a half before Chubb finally told Ms. Singh's lawyer, in May 2008, that Zurich insured the vehicle.
Under Ontario Regulation 283/95 - the regulation governing disputes between insurers - the first insurer to receive a benefits application is required to pay up front while any coverage dispute gets sorted out. That is the well-known "pay now, dispute later" principle. The regulation also requires insurers to notify any other insurer they believe should be responsible within 90 days. Chubb did neither.
The dispute eventually reached the Supreme Court of Canada, which ruled in 2015 that Chubb qualified as an insurer under the regulation because of its relationship with Wheels 4 Rent. A second arbitration followed, where Arbitrator J. Douglas Cunningham found Chubb had breached both its duty to pay and its duty to notify. He directed Chubb to reimburse Zurich $998,368.99 in benefits already paid to Ms. Singh and held Chubb permanently liable for the claim.
A Superior Court judge later overturned that award, finding that Chubb and Zurich should share responsibility equally. The Court of Appeal disagreed, finding no legal basis for treating Chubb as an insurer of equal priority with Zurich under section 268(2) of the Insurance Act.
The appellate court laid out a three-step framework for handling these disputes going forward: first, determine whether the insurer that received the claim is the priority insurer; second, assess whether that insurer breached its obligations; and third, decide on the appropriate consequence - which can include permanent liability.
The court found that permanent liability was warranted here. Chubb had a relationship with Wheels 4 Rent and could have easily identified Zurich as the correct insurer. Instead, Ms. Singh was left without benefits while her condition seriously worsened, and Zurich lost the chance to investigate and manage the claim early on.
Costs of $25,000 were awarded to Zurich.
