A Newfoundland court has cleared the way for Intact Insurance to chase a personal indemnitor - even after insolvency releases were granted.
In a decision filed on April 27, 2026, Justice Peter N. Browne of the Supreme Court of Newfoundland and Labrador refused to toss out Intact Insurance Company's claim against Francis Collins, a personal indemnitor who had signed on to back surety bonds issued by the insurer.
The case - Intact Insurance Company v. Edward Collins Contracting Limited, 2026 NLSC 49 - puts a spotlight on a question surety professionals know well: what happens to personal indemnity agreements when the company behind them goes through insolvency?
Here is what happened. Intact had issued surety bonds connected to the operations of Edward Collins Contracting Limited and related companies. Collins signed a personal indemnity agreement supporting those bonds - not just on behalf of the company, but in his own name as well.
When the debtor companies entered proceedings under the Companies' Creditors Arrangement Act, a court approved the sale of substantially all of their assets and granted releases to certain parties, including directors and officers acting in those roles. That Approval and Vesting Order was issued on October 18, 2023.
Collins argued the releases wiped out his personal obligation to Intact. He pointed to paragraph 21 of the order and moved to strike Intact's claim entirely, calling it barred by legal doctrines that prevent the same issue from being fought twice.
Justice Browne disagreed.
The court found that the releases were never meant to cover personal contractual obligations like indemnities. The order itself contained a savings clause - stating that nothing in it would bar "any claim that is not permitted to be released pursuant to section 5.1(2) of the CCAA." That provision of the Act says that claims tied to the contractual rights of creditors cannot be compromised through director releases.
Justice MacDonald, who originally issued the order, had also made the point during earlier proceedings that no one had asked him to release the Collins family in their personal capacity - only in their roles as directors, officers, or employees.
The court drew a clear line between two types of liability. Owing something because you were a director is one thing. Owing something because you personally signed an indemnity contract is another. The first can potentially be released in a restructuring. The second, according to this decision and the weight of case law, is not so easily set aside.
Justice Browne also dismissed the argument that Intact was relitigating a settled matter, finding that Collins' personal indemnity was never actually decided during the earlier proceedings.
For surety underwriters and claims teams across Canada, the takeaway is straightforward. Personal indemnity agreements - the foundation of how surety bonds get written - are not easily swept away by insolvency releases. The statutory protections under the CCAA appear to hold firm.
