Is That “Faulty Workmanship” Exclusion Watertight? ONCA Finds That Insurer Cannot Exclude Resulting Damage By Implication
Many all-risks insurance policies exclude damage caused by a contractor’s faulty workmanship. The breadth of these “faulty workmanship” exclusions vary considerably. On one hand, a clause may narrowly exclude only the “cost of making good” the contractor’s defective work. On the other hand, a clause may exclude not only the cost of correcting the fault, but any damage caused as a result of the work performed. Such damage is commonly known as “resulting damage”. The Ontario Court of Appeal recently held that an insurer cannot exclude resulting damage by implication. Where a “faulty workmanship” clause is silent on resulting damage, such damage will remain covered.
Missing the Mark: Contractor’s Use of Products in Violation of Code was Evidence of Negligence
Even for those who purchase and install products, compliance with statutory regulation is a must. In Taylor v. Great Gulf (Whitby) Ltd.,[1] a contractor who purchased and installed materials which were improperly labelled learned an important lesson in negligence law: although a breach of statutory authority does not alone give rise to civil liability, such breaches can be evidence of negligence. In deciding that there was a serious issue to be tried, the court took a broad view of causation and decided that it would be open to trier of fact to find that the defendant’s breach of code was substantially connected to the plaintiff’s injury.
Bad Chair Day: Nerland v. Toronto-Dominion Bank
A stout, upholstered chair may, at first blush, seem innocuous. It’s easy to ignore the warnings often recited by parents and teachers to sit property when rocking back and forth on a chair’s legs. However, in Nerland v. Toronto-Dominion Bank, the British Columbia Supreme Court reminded us why the old adage dies hard.
Ontario Court Of Appeal: Reasonable Apprehension Of Conflict Forces Insurer To Relinquish Control Of Defence
The Ontario Court of Appeal has again confirmed that an insurer’s contractual right to control a defence must yield to the interests of its insured where its coverage position creates a reasonable apprehension that defence counsel would be in a conflict of interest.
In Hoang v. Vicentini, the Ontario Court of Appeal ordered an insurer to relinquish control over the defence of its insured and pay for the insured’s independent counsel. The Court confirmed that if a fact affecting your coverage is disputed in the underlying litigation, a conflict of interest arises.
Judge Confirms Limited Use Of Extrinsic Evidence For Duty To Defend
An insurer’s duty to defend an action against its insured is triggered by the mere possibility that a claim could be made under the insured’s policy. Traditionally, a court’s analysis of whether this duty is triggered is based solely on the pleadings. However, in some limited circumstances the courts have permitted a consideration of “non-controversial” evidence.
A recent decision of the Ontario Superior Court provides a good illustration of when such extrinsic evidence is and is not appropriate. While higher authorities have opened the door to extrinsic evidence, the court stops short of permitting insurers to engage in adversarial fact-finding inquiries.
B.C. Court Of Appeal Finds Costs To Remedy Damage Caused By Defective Workmanship Is Not Excluded By Workmanship/Design Exclusion
The British Columbia Court of Appeal recently confirmed in Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Co. that a Workmanship/Design Exclusion does not exclude the costs to remedy damage caused by defective workmanship. The lower court decision was previously reported on in Covered. Acciona is the first case in Canada to consider the LEG 2/96, “Defects Exclusion” clause used in Course of Construction (“COC”) policies in Canada. While the outcome of this appeal decision is definitely pro-insured, the lasting impact of this decision will depend on whether the court’s reasoning is restricted to the unique facts of this case or applied more broadly to resulting damage claims generally.
Bullies And Their Parents Not Covered For Lawsuits Under Home Insurance Policy
In Unifund Assurance Company v. D.E., the Ontario Court of Appeal ruled that the parents of a school-age bully are not covered for their negligent supervision under their home insurance policy.
We recently reported on D.E. v. Unifund Assurance Company, a trial level decision where the Court declared that an insurer, Unifund, had to defend and indemnify parents of an alleged school-age bully. The decision was overturned and the Court of Appeal’s reasoning is precedent-setting and instructive to both insurers and policy holders.
Pure Economic Loss Claim Applies To Patent Defects That Are Not Imminently Dangerous
The Manitoba Court of Appeal has held that a defendants’ motion for summary judgment should be dismissed, rejecting their argument that claims for pure economic loss for patent defects that are not imminently dangerous should not proceed to trial. This is yet another in a long line of cases interpreting the seminal Supreme Court of Canada decision in Winnipeg Condominium Corp. No. 36 v. Bird Construction Co., where the Court held a defendant liable for a dangerous defect even though there had been no damage to persons or property (i.e. a pure economic loss claim).
A Cautionary Tale: The Party That Imposes Specifications For Methods And Materials Is Responsible For Its Defects
The Ontario Court of Appeal has held that where a plaintiff has imposed the methods and materials that the defendant must use to complete a project, the defendant is absolved of responsibility if the project proves to be defective, as the risk has been allocated to the plaintiff. Although this decision is not a typical products case, the considerations are similar to those that a court reviews in a case involving the implied warranty of fitness under the provincial Sale of Goods acts.
Carefully Consider That Additional Insured Endorsement – It May Still Protect You!
The Ontario Superior Court of Justice recently held that an additional insured was covered by a policy, where there was no direct claim against the named insured, even though the coverage was limited to claims arising from the negligence of the named insured. The most common additional insured endorsements are generally speaking very restrictive in their application. As this case demonstrates, such an endorsement may still provide protection to an additional insured even where the plaintiff has no direct claim against the named insured.