The Supreme Court of Canada’s oft-quoted reasoning in Ledcor v. Northbridge is a “go-to” analysis when it comes to applying faulty workmanship exclusions in builders’ risk policies. Last week, in 9312374 v. Aviva, 2020 ABCA 166, Alberta’s Court of Appeal reversed a Queen’s Bench decision premised on the notion that Ledcor’s faulty workmanship/resulting damage analysis is limited to course-of-construction policies. In doing so, the Court of Appeal very clearly illustrated how the SCC’s reasonable expectations doctrine applies more generally to “all-risks” policies of all types.  

Had the parties’ intended a different outcome, they ought to have employed a different exclusionary wording to reflect their objective intent. Ultimately, insurers should welcome the decision in 931, which supports certainty and a uniformity of analysis across different commercial contexts.

Click the PDF below to read more.