Nikki Dehnashi

The appellant insurer appealed a lower court's interpretation of a business interruption insurance policy's pandemic coverage limit.

The policy covered seven daycare locations, and the dispute centered on whether the $50,000 limit of liability for pandemic losses applied as a global total or per location.

The Court of Appeal, applying principles of insurance contract interpretation, found the clause unambiguous when read in the context of the policy as a whole, concluding that the limit applied on a per-location basis.

The appeal was dismissed, affirming the lower court's decision in favour of the insured.

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.