Contractors sought indemnity under a builder’s risk insurance policy for costs incurred repairing corroded aluminum window frames during construction of a Toronto building.
The corrosion resulted from exposure to de‑icing chemicals and trapped liquid caused by construction practices.
Insurers relied on policy exclusions for corrosion and faulty workmanship.
The court held the corrosion exclusion did not apply because the corrosion was caused by a peril not otherwise excluded, namely faulty workmanship, which the policy treated as covered resultant damage subject only to deduction of the cost that would have been incurred to rectify the workmanship before the loss occurred.
Coverage therefore applied, but the precise deduction for proper workmanship could not be determined on the record and required further process.
