Creating a One-Sided Narrative Could Lead to a Punitive Damages Award against an Insurer: Lessons from Baker v. Blue Cross

  • January 24, 2024
  • Katherine Di Tomaso, Avi Sharabi, Linette King, Stieber Berlach LLP


Insurers should pay careful attention to the recent Ontario Court of Appeal decision in Baker v. Blue Cross Insurance Company of Canada. The Court’s decision upheld a significant jury verdict in the amount of $1,500,000 in punitive damages and approximately another $1,000,000 in full indemnity fees and disbursements to the plaintiff/insured against her long-term disability benefits insurer.

The Court found that the insurer engaged in a closed loop of information, ignoring information that did not support its coverage denial. There were several examples where the insurer failed to appreciate or clarify evidence contrary to its position, to the point where adverse inferences could be drawn to paint the insurer’s conduct as systemic.

What’s more, the insurer failed to call all prior claims handlers at trial who could explain the rationale behind the coverage denial to potentially counter any adverse inferences. That decision proved even more fatal where the insurer had sought to have the matter tried by a jury, as juries provide no reasons for the appellate court to consider, making it harder to overturn jury awards.

This article provides a discussion of the insurance dispute and key takeaways for insurers and litigants engaged in insurance claims disputes.