On January 30, 2026, the Supreme Court of Canada released its decision in Emond v. Trillium Mutual Insurance Co., 2026 SCC 3, which concerned a dispute over a guaranteed replacement cost endorsement to a home property insurance policy. 

In a significant win for Trillium Mutual Insurance Company, the Court held that the guaranteed replacement cost endorsement did not override a policy exclusion for increased costs arising from compliance with laws regulating zoning, demolition, repair or construction. The Court confirmed that policy terms must be interpreted as a whole rather than in isolation.

The Court also clarified the scope of the “nullification of coverage doctrine,” confirming that even an unambiguous exclusion may be set aside where it would entirely negate the coverage purchased. In this case, the doctrine did not apply because the guaranteed replacement cost endorsement continued to provide a meaningful benefit to the insured.

Gowling WLG acted for Trillium Mutual Insurance Company in this matter with a team that included Jaime Wilson, James Plotkin, Darren Johnston and Pat Peloso, achieving a favourable outcome at Canada’s highest court.