Understanding Insurance Recovery After Judgment: Key Takeaways From Tragger v. Intact Insurance Company (2025 ABKB 678)

When a party obtains a judgment for damage to persons or property and that judgment goes unpaid, there may still be a path to recovery. Section 534 of Alberta's Insurance Act allows a successful plaintiff to pursue the judgment debtor's liability insurer directly, provided the debtor was insured for the type of liability at issue. In effect, the plaintiff may step into the shoes of the insured and bring an action against the insurer.

This process was central to the decision in Tragger v. Intact Insurance Company, 2025 ABKB 678. In the original action, the plaintiff received compensation from a company that supplied and installed exterior stone veneer siding. Seven years after installation, the stone delaminated from the building. The underlying court found that the damage resulted from negligent installation, including issues with the mortar mix and its application. After judgment, the supplier and installer was insolvent. The plaintiff then commenced an action against the insurers who provided coverage during the period from installation until the delamination occurred.

The follow-up action examined both the scope of coverage available under commercial general liability (CGL) policies and the interpretation of several standard exclusion clauses. Here are some key points from the decision.

1. CGL Policies and Performance Bonds Serve Different Purposes

The Court reaffirmed the distinction identified by the Supreme Court of Canada in Progressive Homes, 2010 SCC 33. CGL policies are not performance bonds.

A performance bond ensures a project is completed. A CGL policy may respond to damage to the insured's completed work once the work is finished.

As the SCC noted:

"There seems to be a fairly significant difference between a performance bond and the CGL policies at issue in this case... the CGL policy picks up where the performance bond leaves off and provides coverage once the work is completed."

2. Products–Completed Operations Hazard and the "Your Work" Exclusion

The Court considered the products–completed operations hazard and its relationship to the "your work" exclusion. In one policy, the hazard functioned as an exception to the exclusion.

The exception focuses on property damage rather than the underlying deficiency that contributed to the damage. Although the stone veneer installation in 2007 was deficient, no actual damage occurred until 2014 when the stone delaminated. The timing of the damage was relevant to coverage.

3. Negligent Installation Can Constitute an "Accident"

The Court confirmed that negligent installation of the stone veneer qualified as an accident under one of the policies. The resulting property damage was neither expected nor intended by the insured, which brought it within the policy's definition.

Final Thoughts

Tragger is a useful example of how plaintiffs may pursue recovery through an insurer when a judgment debtor is insolvent. It also highlights how CGL policy wording, exclusions, and exceptions may apply in construction-related property damage cases.