The Scope And Interpretation Of Faulty Workmanship Exclusions In Multi-peril Policies

In Condominium Corporation No. 9312374 v Aviva Insurance Company of Canada, 2020 ABCA 166, the appellant condominium corporation (the "Corporation"), had engaged a contractor and an engineer to provide rehabilitation and maintenance work with respect to the parkade area in its condominium complex.

The scope of work specifically involved the repair and remediation of the parkade membrane, which required that the contractor and engineer cut into the membrane of the parkade surface. However, in carrying out the work the contractor and engineer cut too deeply into the parkade slab, causing damage to the parkade's structural integrity.

The Corporation held a multi-peril policy of insurance with the respondent insurer, Aviva (the "Policy"), which contained a clause excluding coverage for "the cost of making good [...] faulty or improper workmanship." The exclusion clause also contained an exception which clarified, "This exclusion does not apply to loss or damage caused