A recent decision of Ontario’s Court of Appeal has added another possible item to be included in a notice to registrants that may not be on many regulators’ lists. The facts of Furtado v. Underwriter, 2024 ONCA 579 (CanLII), are complex but, in essence, the Court held that an individual did not have insurance coverage through their officers and directors liability policy because they did not promptly notify their insurer of the investigation by a regulator.
Many regulators require registrants to carry various forms of liability insurance so that clients and other members of the public have recourse if the registrant is negligent or otherwise causes financial loss. To facilitate this protection of the public, regulators may wish to consider whether their registrant notifications that they are under investigation should include a suggestion that the registrant notify their insurers about the investigation to ensure there is no loss of coverage.