The Products
Author | Denis Boivin |
Pages | 25-54 |
25
CHAPTER 2
THE PRODUCTS
A. INTRODUCTION
One thread unites all participants in the Canadian insurance indus-
try: the insurance contract. Whether one is an insurance provider,
an insurance consumer, or an intermediary, there is no escaping the
contract. At any point in time, millions of Canadians are involved in
a contractual relationship with an insurer and millions benefit from
an insurance contract without being privy to the agreement. The in-
surance contract is the source of all rights, obligations, and principles
recognized in insurance law. With the exception of the contract for
the sale of goods, it is arguably the most common type of agreement
found in the marketplace.
The insurance contract is also one of the most distinctive of legal
instruments. In this chapter, the key elements of this distinctiveness
will be reviewed. First, we will describe t he fundamental characteristics
of an insurance contract — the features that disting uish this instrument
from other commercial agreements. Second, we will describe the many
ways in which insurance contracts can be classified and the import-
ance of these classifications from a regulatory point of view.
INSURANCE LAW26
B. THE CHARACTERISTICS OF INSURANCE
Insurance law is a branch of the law of contracts. Generally speaking,
the principles learned in a first-year contracts course apply to insurance
contracts. However, classifying an agreement as insurance engenders
many consequences. Some principles of law apply only to insurance
agreements, while others are ir relevant to this type of contract. Further-
more, insurance contracts are heavily regulated in comparison to agree-
ments pertain ing to other commercial ventures. Freedom of contract still
exists in the insurance industry, but it is strongly curtailed by regula-
tors and the courts. Hence, one must be able to recognize that a given
contract relates to insurance.
A recent case before the Alberta Court of Appeal illustrates the
importance of this determination. In Brick Protection Corp v Alberta
(Provincial Treasurer),1 a provincial treasurer was trying to collect over
$700,000 in taxes from a corporation on the theory that it was oper-
ating as an insurance company. The corporation in question, Brick
Protection Corp (Protection), was a sister company to the Canadian
furniture retailer The Brick (Brick). During the period relevant to the
tax assessment, Protection provided extended warranties to Brick fur-
niture and appliance customers in Alberta. The warranties were sold
by Brick employees and were available exclusively to Brick customers.
According to the terms of the warranties, Protection promised to repair
or replace the items warrantied for a fixed period of time in exchange for
a fee that was between 10 and 15 percent of the purchase price of the
goods. In the event that repairs or replacements were impossible, Brick
reserved the right to cancel warranties by refunding the price paid for
them. Before the Court of Appeal, the treasurer of Alberta argued that
Protection was carrying on the business of insurance within the mean-
ing of the Alberta Insurance Act2 and, as a result, the corporation should
pay the same taxe s as insurance companies pay on the policies they sel l
within the Province.
The ramifications of Brick Protection could have been far-reaching.
For starters, if Protection were an insurance provider within the mean-
ing of Alberta tax legislation, other provincial treasurers could have
assessed the corporation for business conducted within their own juris-
dictions. Moreover, the services offered by Protection are widespread
in the Canadian marketplace. Many companies offer extended warran-
ties on furniture, appliances, and electronic equipment. Many retailers
1 2011 ABCA 214 [Brick Protection].
2 RSA 2000, c I-3.
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeUnlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations

Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations

Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations

Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations

Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
