Insurer Must Pay for Repairs Associated With Building Code Upgrades

The importance of the wording of exclusion clauses can be seen in Choukair v. Allstate, 2015 ONSC 4989 (S.C.J.).

The Applicant, Choukair, had a Homeowner’s Policy with the respondent, Allstate. On January 20, 2014 there was a total loss fire at Choukair’s residence. As a result, the house had to be rebuilt. Choukair stated that his replacement cost was $450,700.00, plus taxes. Allstate paid Choukair $369,000.00 but refused to pay the balance.

The difference between what Choukair claimed and what Allstate paid related to the increased cost of the rebuild associated with upgrades required as a result of the Building Code, which Allstate stated were excluded by the Insurance Policy.

There was an exclusion clause in the Policy which stated the following:

We do not insure: (5) losses or increased costs of repair or cost of improving or upgrading dwellings or structures due to the operation of any by-law regulating the zoning, demolition, repair or construction of buildings and their related services;

Justice Quigley held that the loss did not result from the operation of a by-law. The increased costs were related to the application of the Building Code, which is categorized as a law and not a by-law.

Allstate therefore had to pay the balance related to increased costs associated with the Building Code upgrades.

Insurers may want to consider the wording of their exclusion clauses as a result.

Commercial Auto Insurance Pollution Coverages and Exclusions

It makes sense for insurance companies to control their liability as much as possible. This is why certain pollution exclusions exist in commercial car insurance policies. Insurance carriers can also offer coverage that protects you from specific risks of your business. As such special pollution coverages can be added to a commercial car policy. Here are the differences between the exclusions and coverages.

Pollution Exclusions
Your commercial auto insurance will cover any bodily injuries that staff members suffer in an accident. Those will injuries will not be covered if they are a result of the release, seepage, dispersal or escape of pollutants from that vehicle. Most of the time, employees should not be dealing with pollutants. The only case they would be is if they have the appropriate coverage for it. Obtaining coverage is relatively easy when your workers are handling pollutants in the correct manner. Most businesses don’t have anything to do with waste or pollutants, only some businesses will need to deal with that. Before you decide whether the exclusion with affect your business, you should ascertain what exactly a pollutant is. Even simple items like paint and industrial solvents may be considered pollutants which will make events like an office renovation a risk when transporting pollutants.

Pollution Optional Coverage
There are certain times when your business needs to be involved in transporting and dispersal of contaminants. If you have coverage and are compliant with waste handling regulations, and an accident occurs, then your insurance carrier will not exclude the claim. If you are handling waste and pollutants on a regular basis, then you should definitely include that coverage. This will help when it comes time to handle claims for injured workers, and it will also help with paying fines to the government for accidents or spills.

Assess your daily activities and decide whether or not to add pollution coverage or to exclude it. Is it practical for your business? Is it worth the risk to forgo it?

If you'd like to sign up for Long Island commercial auto insurance, please don't hesitate to give us a call at 888-565-2212.