Co-operators General Insurance Company v. Wawanesa Mutual Insurance Company, 2014 NSSC 23
Despite not having insured a business since 2005, the Co-Operators have been ordered to defend a claim filed in 2013.
In 2004, Mark Wile Plumbing and Heating (“Wile Plumbing”) installed an expansion tank for the hot water heating system in a cottage in Lunenburg, Nova Scotia. In 2011, the cottage owners discovered that the expansion tank had fallen, breaking a fuel line, and resulting in over $300,000 dollars in damage from spilled oil. Wile Plumbing was allegedly responsible because of its ‘defective installation’ of the tank.
An insurance policy was issued to Wile Plumbing and Heating by the Co-operators in May of 2004, lapsing in May of 2005. The issue at the Court hearing was whether or not the Co-Operators had a duty to defend Wile Plumbing for the claim which occurred in 2011.
Wile Plumbing’s current insurer, Wawanesa, argued that once the allegedly defective installation took place the cottage property was damaged. The Co-operators argued that the Statement of Claim did not demonstrate that the damage took place between May 2004 and May 2005, the time when they insured the Plaintiff.
Despite the damage occurring six years after coverage ended, it was held that the Co-operators policy did not clearly exclude the possibility of coverage for Wile Plumbing. When there are allegations of negligent installation and that installation occurred within the policy period, there arises a duty to defend. The Court ruled that the property damage arose from the faulty installation of the tank. The Co-operators were ordered to defend Wile Plumbing.
Read the full case here.