Battle of Builders Risk Claim Ends in Victory for PCL
A judge has cleared the way for PCL to collect a long-disputed builders risk claim from a Canadian insurer related to damage on a bridge construction project in Victoria, British Columbia, that occurred four years ago.
The insurer battled for years to deny PCL coverage for water damage on the Johnson Street Bridge, a replacement structure that opened for use in March 2018. The $78-million structure is Canada’s largest single-leaf bascule bridge.
A provincial judge ordered Royal & Sun to settle up with PCL Westcoast Ltd., the prime contractor, for the remaining $250,000 balance of a $520,000-plus claim for water damage, which Royal & Sun had fought since 2015.
The insurance battle stems from bad weather in February 2015 during a concrete pour, when water infiltrated the formwork, “damaging the concrete foundations of the bridge,” court records note.
Roughly six months later, PCL notified Royal & Sun through its insurance broker about the issue, requesting coverage. However, the first line of defense by Royal & Sun, which provided builder’s risk insurance to the city, was to deny the claim. The insurer argued that PCL was not named as an insured party.
After two years of unsuccessful attempts to extract the payments from Royal & Sun, PCL sued in British Columbia Supreme Court. A judge ruled in PCL’s favor in 2017, though it took another year before Royal & Sun, in September 2018, coughed up $270,000 of the more than $520,000 it owed.
Royal & Sun refused to turn over the remaining $250,000, arguing the policy provided to PCL included a deductible in that amount.
But Madam Justice Catherine Murray, while acknowledging in her May 28 decision in favor of PCL that the contractor may very well have known of the deductible, argued that it was irrelevant to the case. The policy violated the province’s insurance regulations, which require up-front disclosure of any clauses that negate or limit the amount of money to be paid or owed.