Faulty Workmanship – What’s Excluded? The Work Or The Repair?

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 denied.

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.