Saskatchewan court upholds insurer’s duty to defend

In a case involving a contractor’s attempt to move a mobile home onto a foundation, thus damaging both, Saskatchewan’s Court of Queen’s Bench found an insurer’s policy exclusion applied to damage to the home, but the insurer had a duty to defend the insured for claims arising from damage to the foundation.
Robert and Kristen Fitzsimonds hired D&E Mobile Home Moving to move their mobile home in 2006.
During the move, the Fitzsimonds allege that when the house was being placed on its new foundation, the house, the ‘preserved wood foundation’ (PWF) basement, the concrete foundation beneath the PWF basement and unspecified personal property were damaged.
D&E Mobile Home Moving and its director, Erin Roy Ireland, were insured by ING Insurance Company of Canada under a Commercial General Liability (CGL) policy.
The Fitzsimonds commenced an action against ING to recover for damages. Originally, ING defended the action, but then advised the contractor six months later that it would no longer do so, relying on “own work,” “the care custody and control” and “removal and/or weakening of supports” exclusions in the CGL policy.
The court upheld the insurer’s ‘own work’ exclusion under a Commercial General Liability Policy for damage that was done to the mobile home.
But since the company did not remove or weaken any of the supports with respect to the PWF basement or the cement foundation upon which the house sat — i.e. the foundation itself was not a product of the contractor’s “own work” — the court ruled that ING had a duty to defend with respect to the claims for damage to the PWF basement, the foundation upon which that basement sits and the unspecified property, “together with any “compensatory damages” flowing therefrom as those claims may fall within the coverage provided by the CGL policy.”
The court also ordered ING to indemnify the contractor and its director for legal costs from the time it withdrew its services.