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ARTICLE · 30 NOVEMBER 2015

Builders Take Note: BCCA Upholds Interpretation Of Common Defective Workmanship Exclusion

McCarthy Tétrault
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The LEG 2/96 is one of three model defective workmanship exclusion clauses developed by the London Engineering Group, a U.K. think tank that develops policy wording for the insurance industry.

CanadaInsurance
Ariel DeJong
Ariel DeJong
Jordanna Cytrynbaum
Jordanna Cytrynbaum
Lindsay Burgess
Lindsay Burgess
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A unanimous panel of the B.C. Court of Appeal recently upheld a 2014 B.C. Supreme Court decision which interpreted, for the first time, the "LEG 2/96" exclusion clause for defective workmanship common in some Course of Construction insurance policies.

The LEG 2/96 is one of three model defective workmanship exclusion clauses developed by the London Engineering Group, a U.K. think tank that develops policy wording for the insurance industry. By way of comparison, the LEG 1/96 contains the broadest exclusion by excluding recovery for all loss or damage due to defects of workmanship or design. The LEG 3/96 is the narrowest exclusion, as it only excludes the costs incurred to improve the original material, workmanship, or design. The LEG 2/96 falls in the middle and excludes:

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