Insurance Law Blog
Knowledge Centre

Insured entitled to indemnification by insurer due to Court interpreting policy contra proferentem against insurer

April 12, 2022

Insurance law – Property insurance – Interpretation of policy – Ambiguity – Exclusions – Contra proferentum rule – Insured – Rights and duties of insured

2102908 Alberta Ltd. v. Intact Insurance Co., [2022] A.J. No. 284, 2022 ABQB 175, Alberta Court of Queen’s Bench, February 28, 2022, S.E. Richardson J.

The insured operated a bowling alley on the ground floor of a leased premises which sustained damage when water overflowed the banks of the local river resulting in surface water entering the insured property through multiple openings of the walls and doors.  The insurer denied the insured coverage on the basis that the policy excluded coverage for loss or damage caused directly or indirectly by flood.

The insured argued that an individual extension in the policy provided stand alone additional coverage for loss or damage caused by seepage, leakage or influx of water derived from natural sources (the “Coverage Extension”), and that there were no exclusions to this additional coverage.  The insurer argued that the damage was caused by a flood and that the Broad Form of coverage specifically excluded coverage for loss or damage caused directly or indirectly by flood (the “Flood Exclusion”).

The Court found that there was ambiguity between the Flood Exclusion and the Coverage Extension given that the Flood Exclusion related to a narrower event than the Coverage Extension.  The Court noted that the Statement of Agreed Facts put forward by the parties attested to the fact that the act that caused the damage was the influx of water into the insured premises as a result of water overflowing the banks of the river.  The Court found that, although colloquially this event could be described as a flood, the specific action that resulted in the damage to the premises was the influx of water into the premises.

Due to the ambiguity between the Flood Exclusion and the Coverage Extension, the Court found that the policy should be interpreted contra proferentem against the insurer, with the Coverage Extension clause interpreted broadly, and the Flood Exclusion interpreted narrowly.  Accordingly, the Court concluded that the policy contained an extension of coverage for loss or damage caused by seepage, leakage or influx of water derived from natural sources, which covered damages caused to the insured property by the overflowed river water, and that the insured was entitled to indemnification under the policy.

This case was digested by Alicia Catalano, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Alicia Catalano at [email protected].

To stay current with the new case law and emerging legal issues in this area, subscribe here.

Tags

Expertise

Important Notice: The information contained in this Article is intended for general information purposes only and does not create a lawyer-client relationship. It is not intended as legal advice from Harper Grey LLP or the individual author(s), nor intended as a substitute for legal advice on any specific subject matter. Detailed legal counsel should be sought prior to undertaking any legal matter. The information contained in this Article is current to the last update and may change. Last Update: April 12, 2022.

Related

Harper Grey welcomes four new associates
Harper Grey welcomes four new associates
Abigail Turner recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise
Abigail Turner recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise Abigail Turner recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise
Bruno Desparts to present at Ma Pratique hosted by Association des juristes d’expression française de la Colombie-Britannique
Bruno Desparts to present at Ma Pratique hosted by Association des juristes d’expression française de la Colombie-Britannique Bruno Desparts to present at Ma Pratique hosted by Association des juristes d’expression française de la Colombie-Britannique
Lesley Russell lends her Expertise in Recent Presentation focused on Estate Planning
Lesley Russell lends her Expertise in Recent Presentation focused on Estate Planning Lesley Russell lends her Expertise in Recent Presentation focused on Estate Planning
Christopher Rusnak, KC recognized as a Litigation Star by Benchmark Canada® 2024 in three areas of expertise
Christopher Rusnak, KC recognized as a Litigation Star by Benchmark Canada® 2024 in three areas of expertise Christopher Rusnak, KC recognized as a Litigation Star by Benchmark Canada® 2024 in three areas of expertise
Retail Case Update: A Follow Up on the Impact of Failure to Immediately Disclose Settlement Agreements
Retail Case Update: A Follow Up on the Impact of Failure to Immediately Disclose Settlement Agreements Retail Case Update: A Follow Up on the Impact of Failure to Immediately Disclose Settlement Agreements Retail Case Update: A Follow Up on the Impact of Failure to Immediately Disclose Settlement Agreements
David Pilley recognized as a Litigation Star by Benchmark Canada ® 2024 in two areas of expertise
David Pilley recognized as a Litigation Star by Benchmark Canada ® 2024 in two areas of expertise David Pilley recognized as a Litigation Star by Benchmark Canada ® 2024 in two areas of expertise
Harper Grey sponsors 2024 Allard Law Alumni Achievement Awards
Harper Grey sponsors 2024 Allard Law Alumni Achievement Awards
Abigail Turner participates as judge in external Advisory Panel for 2024 Canadian Law Awards
Abigail Turner participates as judge in external Advisory Panel for 2024 Canadian Law Awards Abigail Turner participates as judge in external Advisory Panel for 2024 Canadian Law Awards
Three Harper Grey lawyers selected by Benchmark Canada® 2024 as Litigation Stars in the area of General Commercial Litigation
Three Harper Grey lawyers selected by Benchmark Canada® 2024 as Litigation Stars in the area of General Commercial Litigation
Kimberly Jakeman, KC recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise
Kimberly Jakeman, KC recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise Kimberly Jakeman, KC recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise
Five Harper Grey lawyers selected by Benchmark Canada® 2024 as Litigation Stars in the area of Health Law
Five Harper Grey lawyers selected by Benchmark Canada® 2024 as Litigation Stars in the area of Health Law
Nigel Trevethan recognized as Insurance Litigator of the Year by Benchmark Litigation® Canada for third consecutive year
Nigel Trevethan recognized as Insurance Litigator of the Year by Benchmark Litigation® Canada for third consecutive year Nigel Trevethan recognized as Insurance Litigator of the Year by Benchmark Litigation® Canada for third consecutive year
Michael Hewitt recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise
Michael Hewitt recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise Michael Hewitt recognized as a Litigation Star by Benchmark Canada® 2024 in two areas of expertise
Two Harper Grey lawyers selected by Benchmark Canada® 2024 as Litigation Stars in the area of Environmental Law
Two Harper Grey lawyers selected by Benchmark Canada® 2024 as Litigation Stars in the area of Environmental Law Two Harper Grey lawyers selected by Benchmark Canada® 2024 as Litigation Stars in the area of Environmental Law Two Harper Grey lawyers selected by Benchmark Canada® 2024 as Litigation Stars in the area of Environmental Law
arrow icon

Subscribe