When Your Insurance Policy Determines Where You Can Sue

By Jenny Holly Hansen | Langley News | July 9, 2026

A recent Québec Superior Court decision is a timely reminder that the fine print in an insurance policy can have a major impact on what happens when a claim turns into a legal dispute. In 9285-6111 Québec inc. v. Dream Yacht Charter (2026 QCCS 1356), the Court confirmed that a properly drafted choice of forum clause can require policyholders to resolve insurance disputes in another country—even when the loss or lawsuit is connected to Québec.

When Your Insurance Policy Decides Where You Can Sue

Most business owners focus on what their insurance covers, but few pay attention to where disputes must be resolved if coverage is denied.

That question became the focus of a recent court case involving a damaged charter catamaran. After the vessel was damaged, the owner sued the charter company for repairs and lost income. The charter company then asked its insurer to defend and indemnify it under its insurance policy. When the insurer declined, the dispute over coverage ended up before the Québec Superior Court.

The insurer argued that the court had no jurisdiction because the insurance policy contained a choice of forum clause requiring any disputes related to the policy to be heard exclusively in the courts of the United States. The Court agreed.

What Is a Choice of Forum Clause?

A choice of forum clause is a provision in a contract that specifies which court or legal jurisdiction will hear disputes arising from that agreement.

These clauses are common in commercial contracts, especially where insurers, manufacturers, or businesses operate internationally.

In this case, the policy stated that disputes would:

• Be governed by U.S. law.
• Be heard exclusively in U.S. courts.
• Apply to any dispute arising from or connected with the insurance policy.

Because the wording was mandatory, specific, and clearly identified the types of disputes it covered, the Court found the clause fully enforceable.

Precision Matters

Interestingly, the Court also reviewed a similar clause contained in the certificate of insurance.

Unlike the policy wording, that version failed to clearly identify which disputes had to be heard in the United States. Because it was incomplete, the Court ruled that it could not remove the jurisdiction of the Québec courts.

The decision highlights an important legal principle: small differences in wording can completely change whether a clause is enforceable.

Why This Matters to Policyholders

For business owners, this decision is about much more than legal drafting.

A choice of forum clause can significantly affect the cost, complexity, and timeline of resolving an insurance dispute. If your policy requires litigation in another province or country, you may face:

• Higher legal expenses.
• The need to hire lawyers in another jurisdiction.
• Different procedural rules.
• Different laws governing how your policy is interpreted.
• Longer claim resolution times.

Even if your business operates entirely in Canada, your insurance dispute could end up being decided somewhere else if your policy says so.

International Insurance Requires Extra Attention

Many businesses purchase specialized coverage through international insurers or Lloyd's markets because they provide solutions that may not be available through domestic insurers. Marine, aviation, technology, cyber, and other specialized risks often involve policies issued by insurers outside Canada.

These policies may contain governing law and jurisdiction clauses that differ significantly from what many business owners expect.

Understanding those provisions before a claim occurs can help avoid unpleasant surprises later.

The Bottom Line

Insurance policies are legal contracts, and every provision can have practical consequences. Coverage limits, exclusions, deductibles, and endorsements are important—but so are the clauses that determine where disputes must be resolved.

A recent Québec court decision demonstrates that a carefully drafted choice of forum clause can require policyholders to pursue coverage disputes in another country, even when the underlying claim is being heard in Canada. Reviewing these provisions before purchasing or renewing coverage can help businesses understand the legal obligations they are accepting and ensure the policy aligns with their needs.

TAGS:  #Jenny Holly Hansen #Protect Your Business #Community Impact #Langley Connect #Surrey Connect #North Van Connect #Connect Network #Choice of Forum Clause

Let’s Keep Talking: Jenny Holly Hansen, Insurance Broker since 2006. Phone: 604-317-6755   Email: hello@jennyhollyhansen.ca Website: jennyhollyhansen.ca   LinkedIn https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.