Ambiguous Exclusion Clauses And Reasonable Expectations: Lessons From Busato v. Gore Mutual Insurance Company

The decision of Busato v. Gore Mutual Insurance Company, 2025 BCCA 79 (CanLII) is a recent and noteworthy case from the Court of Appeal for British Columbia. It reaffirms the well-established principle that insurance contracts are to be construed and interpreted according to the reasonable expectations of an average person applying for insurance, rather than through the perceptions of persons versed in the niceties of insurance law.¹ This case should be taken into consideration by insurers whose contracts contain exclusion clauses that are broad and ambiguous. The decision underscores the perils for insurers who wish to narrow coverage by means of explicit exclusion clauses and affirms that insurers are free to do so in any way they wish, provided that they do so clearly, explicitly, and in a manner that does not unfairly leave the insured uncertain or unaware of the extent of coverage.²