The Duty To Defend: Clear Policy Exclusions Prevail

The Supreme Court of Canada recently dismissed the application for leave to appeal from the British Columbia Court of Appeal decision Precision Plating v. AXA Pacific Insurance Co ("Precision").

Precision Plating, who was insured by AXA, operated out of a multi-tenanted commercial building. A fire broke out, which triggered the sprinkler system, filling chemical vats and causing them to overflow. These overflowing vats seeped diluted chemicals into neighbouring businesses, contaminating the surrounding property. As a result, the property owners, whose property was damaged by the chemicals, commenced an action against Precision Plating. Precision Plating then turned to AXA to defend the action and indemnify Precision Plating for any damages awarded to the Plaintiffs.