Jennifer Kent

The applicant insurer sought a declaration that three other insurers had a duty to defend a construction company in an action for damages resulting from an allegedly defective mechanical system.

One insurer, AIG, denied a duty to defend based on faulty workmanship and loss of use exclusions.

The court found that the allegations in the statement of claim regarding consequential damage and loss of use were sufficiently broad to raise the possibility of coverage, triggering AIG's duty to defend.

The court further held that the defence costs should be allocated among the insurers on a 'time on risk' basis, rather than equally, and that a self-insured retention clause did not alter one insurer's obligation to contribute to defence costs at this stage.

The applicants sought a declaration that their automobile insurer had a duty to defend them in a personal injury action arising from an all-terrain vehicle (ATV) accident.

The insurer denied coverage, arguing the ATV was an off-road vehicle driven on private property and not an automobile under the Insurance Act.

The court found that the underlying statement of claim contained alternative allegations that the applicants owned the ATV but were not occupiers of the property where the accident occurred.

If proven, these facts would mean the ATV was a newly acquired automobile covered by the policy.

The court granted the application, holding the insurer had a duty to defend.