Precedent Setting Case: Standard Exclusion In Course Of Construction Insurance Policy Interpreted For First Time

On August 19, 2014, Mr. Justice Skolrood of the British Columbia Supreme Court issued reasons in Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Company, 2014 BCSC 1568 (Acciona), regarding coverage under a Course of Construction (COC or Builders Risk) Policy. The decision should be noted by all construction and insurance lawyers, owners, contractors, insurers and brokers, as  the Court interprets for the first time the LEG2/96 clause, a design/workmanship exclusion developed by the London Engineering Group which is commonly used for large infrastructure projects. The Court also provided clarification on common insurance issues to establish coverage in a COC Policy, including a fortuitous loss and what constitutes "damage to insured property". A copy of the reasons can be found by clicking here.