On a summary trial application, the Court denied the Insured’s claim for indemnification and defence from its Insurer after finding that damage caused by the Insured while cleaning a boiler was accidental but fell within the “own work” exclusion in a CGL policy

B.C. Master Blasters Inc. v. Aviva Insurance Co. of Canada, [2006] B.C.J. No. 2620, British Columbia Supreme Court

This was a summary trial application in which the Plaintiff, B.C. Master Blasters Inc. (“Master Blasters”) claimed against its insurer, Aviva Insurance Co. of Canada (“Aviva”) for a defence and indemnification in respect of a claim brought against it by Weyerhaeuser for damages sustained while Master Blasters was working on its boiler. The issue was whether Master Blasters was entitled to be defended and indemnified in respect of the claim under a CGL policy issued to it by Aviva.

Master Blasters was hired by Weyerhaeuser to clean smelt off the pipes on the floor of its boiler. Employees of Master Blasters used a jackhammer-like tool to remove the smelt thereby damaging some pipes. When Weyerhaeuser made a claim against Master Blasters for damage to the boiler, Aviva denied coverage on two grounds. First, it said that the damage was not the result of an “accident”. Second, it said that the “work performed/business risk” exclusion clauses in the insurance contract excluded coverage for this sort of damage.

On the first issue, the Court noted that property damage is generally found to be “accidental” where the person causing the damage does not intend to cause it. There is a presumption that a person intends the natural and probable consequences of his or her acts. Accordingly, the Court found that the damage to the boiler was accidental. The workers had no intention of doing damage to the pipes and they would not have proceeded to use the jackhammer-like device if they had thought that they would do any damage in the process.

On the second issue, the Court stated that the critical question was what particular part of property Master Blasters was working on at the time. The Court found that the damage was a direct result of the work being performed, which was the removal of smelt from pipes. While it may be that the damage to other parts of the boiler might fall outside the “own work” exclusion, it could not be said that the work product in this case did not involve the pipes on the floor of the boiler. The Court found that the property damage in issue in this case was to that particular part of property on which Master Blasters was performing operations. It was also to property that “must be restored, repaired or replaced because Master Blasters’ work was incorrectly performed on it.”

Accordingly, the Court found that the insurance policy excluded the damage claimed to have been suffered by Weyerhaeuser as a result of Master Blasters’ work and the Plaintiff’s action was dismissed.

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