23/09/13 – Jurisdiction British Columbia
Part 27 published on 01/08/09
Court considers the following questions: How many occurrences? How many deductibles?
In 2005, the strata corporation discovered that about one-third of the units were being used for marijuana grow-operations. Damage to the property (as a result of the grow-ops) was close to $500,000. The corporation’s insurance provided coverage for this type of loss, but was subject to a $50,000 deductible for each occurrence. The insurer took the position that each grow-op, in each unit, was a separate occurrence, triggering a separate deductible in each case. The insurer said:
“Because a separate deductible applies to each apartment that was the location of a grow-op, and the repair [cost] in respect of each apartment is less than the deductible, the insurers’ position is that there is no indemnity due under the policy.”
The strata corporation asserted that all of the grow-ops were part of one overall operation, and therefore should be considered one occurrence (triggering only one deductible).
The Court held that there was not sufficient evidence that all of the grow-ops were “coordinated by a single king pin or organization”. However, the Court did find that nine of the grow-ops were clearly connected by a single coordinating enterprise, so that those nine grow-ops constituted a single occurrence. As a result, one deductible applied to the nine units and one deductible applied to each of the remaining twenty units.
The Court also found that losses associated with the damaged reputation of the property were subject to one additional deductible.