In Ledcor Construction Ltd v Northbridge Indemnity Insurance
Co.1, the Alberta Court of Queen's Bench has
once again reminded insurers to exercise extreme caution when
drafting policy exclusions. Ambiguity will always be interpreted in
favour of the insured.
The insured had contracted with a cleaning company near the end
of a construction project to clean debris from the exterior of the
building, including the windows. The windows were so badly
scratched and damaged they had to be replaced. The insured looks to
its insurer for the cost of the replacement windows. Coverage was
The insurer argued that the cost of replacing the windows
amounted to "the cost of making good faulty workmanship",
and therefore fell within an exclusion clause in the policy.
This policy does not insure...
(b) the cost of making good faulty workmanship,
construction materials or design unless physical damage not
otherwise excluded by this policy results, in which event this
policy shale insure such resulting damage [emphasis
The insured took the position that in the context of the loss,
"the cost of making good faulty workmanship" meant the
cost of having the cleaning re-done. They framed the claim as
seeking recompense for the damage done in the course of
The Court held that the both interpretations of the policy
language were plausible; that the cost of "making good"
faulty cleaning excluded the cost of having someone else redo the
cleaning or that "making good" faulty cleaning included
paying for the damage caused.
An exclusion clause with two possible meanings can only mean one
thing – coverage for the insured. The Court also considered
the expectations of the parties and held that an insured would
expect a broad "all risk" policy to cover this type of
While this case does not create new law, it serves as a stark
reminder of the care that must be taken when drafting exclusions to
consider alternate ways the language could be read.
The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.
From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.
Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
The recent Preliminary Issue decision in Walsh and Echelon (FSCO A15-007448, August 31, 2016) confirms that an economic loss does not need to be demonstrated in order to be entitled to attendant care benefits.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
Policyholders recently won a key victory at the Supreme Court of Canada in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. as the Supreme Court clarified the interpretation of a standard form...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).