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ARTICLE · 14 APRIL 2016

Looking Through A Dirty Window: Builders' Risk Policies And The "Faulty Workmanship" Exclusion

Miller Thomson
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On March 30, 2016, the Supreme Court of Canada heard argument in the appeal of the Alberta Court of Appeal's decision in Ledcor v Northbridge Indemnity Insurance Company.

CanadaInsurance
Mark Alexander
Mark Alexander
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On March 30, 2016, the Supreme Court of Canada heard argument in the appeal of the Alberta Court of Appeal's decision in Ledcor v Northbridge Indemnity Insurance Company.   In doing so, the SCC was asked to consider, among other things, the proper test to distinguish between the concepts of "faulty workmanship" and "resulting damage" in comprehensive builders' risk policies.

The dispute in this case arose in relation to the construction of the EPCOR Tower, a 29 storey office building in Edmonton, Alberta, completed in 2011.  The owner, Station Lands Ltd. ("Station Lands") retained Ledcor Construction Ltd. ("Ledcor") as a construction manager to coordinate construction of the building.  An "All Risks" policy was obtained by Station Lands from a number of insurers to cover all "direct physical loss or damage" subject to certain defined exclusions.  The policy named both Station Lands and Ledcor as insureds, and the additional insureds included the owners,

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