Swagger Construction Ltd. v. ING Insurance Co. of Canada

Most builders carry general commercial liability insurance.  This case dealt with the following question:  Do these general commercial liability insurance policies cover claims against the builder for defective work or for damage resulting from the defective work? The Court held as follows: 

The builder’s insurance coverage will depend in each case upon the specific wording of the policy.  However, general liability insurance policies, in virtually every case, do not provide insurance coverage for repair of the builder’s defective work.  Furthermore, general liability insurance policies, in most cases, do not provide coverage for consequential damages to the building.  [An example would be damage due to water penetration as a result of defects in the building envelope.] General liability insurance policies in most cases do not provide coverage for consequential damage to any part of the builder’s work (which would normally include consequential harm to any part of the building).  Consequential harm to persons or to other property (not part of the builder’s work) would, in most cases, be covered by such policies.  Again, however, this will depend in each case upon the specific wording of the policy.