Is there a separate cause of action that arises when an insurer violates the duty of good faith it is expected to provide to an insured?
Ontario, Canada
The following excerpt is from Jarrett v Aviva Insurance Company of Canada, 2022 CanLII 2762 (ON LAT):
Citing Whiten v. Pilot Insurance Co. (“Whiten”),[1] the applicant claimed that there is a separate cause of action that arises when an insurer violates the duty of good faith it is expected to provide to its insured persons. She believes the respondent acted inappropriately in its handling of her OCF-19, so the applicant contended that there must be a means of addressing this bad faith behaviour apart from an award. That is, an award cannot address an insurer’s handling of a designation (in this case, catastrophic impairment), so damages are needed to remedy (and discourage) this kind of behaviour.
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