The issue was the scope of the "pollution exclusion"
clause in a policy of home insurance issued by the defendant, BCAA
Insurance Corporation, to the plaintiff, Brian Corbould. Corbould
sought a declaration of coverage for property damage that occurred
when an above-ground storage tank for home-heating fuel oil leaked
into the soil around his cottage."The policy stated:
The "all risks" property coverage in the
comprehensive insurance policy that BCAA issued to Mr. Corbould
provides, in the section of the policy dealing with property
coverage, at Section 1.7:
You are insured against ALL RISKS OF DIRECT PHYSICAL LOSS OR
DAMAGE subject to the exclusions and conditions in this policy.
The insurer says that although the loss would otherwise be
covered under the Policy, coverage for it is excluded by Section
1.8 of the Policy, which contains a list of exclusions. In its
relevant parts it provides an exclusion that the insurer says is
clear and unambiguous:
We do not insure loss or damage caused by contamination or
pollution, or the release, discharge or dispersal of contaminants
The term "pollutants" as it appears in Section 1.8 is
defined in Section 5 of the Policy as
"Pollutants" means any solid, liquid, airborne,
gaseous or thermal irritant or contaminate, including smoke,
vapour, soot, fumes, acid, alkalis, chemicals and waste. Smoke,
within this definition of Pollutants means, smoke caused from
agricultural smudging or industrial operations."
The terms and phrases "contamination,"
"pollution," "release, discharge or dispersal,"
and "contaminants" were not defined in the Policy.
Corbould argued that:
The plaintiff says that, properly interpreted, the Policy
provides coverage for the loss that has occurred. The plaintiff
says that he is a non-commercial, residential home owner who is not
in the business of generating contaminants and was operating a
heating system as he had advised his insurer. The plaintiff says
that in the circumstances the pollution exclusion, properly
interpreted, does not apply to the loss in question. The plaintiff
says the key issue is that the plaintiff was not involved in
business activities that could lead to the pollution of the
The plaintiff says that the so-called pollution exclusion
clause does not exclude liability for the unintended results of the
normal operation of the heating system. Moreover, the plaintiff
says that to interpret pollutants to include something that
occurred during the intended and normal use of the insured's
dwelling heating system fails the common sense test for determining
what is "pollution".
The plaintiff also argues that the particular language of the
pollution exclusion is, applying proper principles to the
construction of insurance policies, not sufficient to bar the
plaintiff's claim for indemnity.
In the alternative, the plaintiff argues that coverage for this
type of loss would be within the reasonable expectations of the
parties at the time the contract of insurance was made, and even if
the exclusion clause is clear and unambiguous, it should not
Justice Sigurdson disagreed. He held that the pollution
exclusion was clear, and definitely applied to an oil spill. Bottom
line: those who use oil for heating need to buy specific insurance
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