Is Bad Work An "Accident"?

The Supreme Court of Canada's recent decision in Progressive Homes Ltd. v. Lombard General Insurance Company of Canada represents a major change in the law as it relates to a general liability insurer's duty to defend a contractor against a claim in which it is alleged that the contractor's work or materials are defective and have resulted in damage to other components of the project for which the contractor was contractually responsible.

Before Progressive, the law in British Columbia developed over 19 years to a point where it was generally understood that a claim for the cost of repairing or replacing a contractor's defective work product and related damage to the project was not a claim that triggered the obligation of a general liability insurer to defend the contractor under a policy which provided coverage for the insured's liability arising out of property damage.