Insurance Coverage for Construction Deficiency Claims: Lessons From B.C.'s Leaky Condo Wars
Authors: Neo Tuytel and Glen Boswall
Updated: September, 2006
The insurance industry is painfully aware of the leaky condominium crisis in British Columbia. Particularly in the Lower Mainland and on Vancouver Island, condominiums have leaked badly and the collective repair costs have been very substantial. Insurers’ legal bills, for defending the resulting litigation, settling those claims and resolving related coverage disputes, have been very significant. There have also been an increasing number of water ingress claims for schools and other public buildings, and rumblings of a second phase of condo litigation, moving beyond low-rise, wood-frame buildings, to concrete, steel and glass high-rises.
Moreover, with the 2010 Winter Olympics on the horizon, and yet another general building boom in the Greater Vancouver area, construction deficiency claims, and related coverage disputes in B.C., as well as elsewhere in Canada, can only be expected to increase in number. Consider, for example, the ‘crumbling concrete’ litigation in Ontario, featured in the epic ‘Lafarge’ coverage battle between the insured supplier and many of the country’s major insurers.1 All of this begs the question: What lessons can be learned? Or is history doomed to repeat itself?
If you are only interested in the bottom-line for members of the insurance industry, then you may want to turn to heading IX, at p. 43 for: “A Coverage-Centred Prescription For Cost-Effective Claims Handling”. There, we provide some pragmatic advice for dealing with the construction deficiency issues that continue to beset the insurance industry. But, if you would first like to get an overview of the ‘leaky condo’ problem, and some of the specific liability and coverage issues which it involves, and are involved in construction deficiency cases generally, then it may be worth your while to read all (or at least most) of what follows.
> Download Paper
(PDF Format, 51 pgs.)
