Leaky home heating fuel may not be covered by home insurance

20. December 2010 0

Insured’s claim for loss occasioned by leak of home heating fuel was excluded by terms of standard pollution exclusion clause.

Courbould v. BCAA Insurance Corp., [2010] B.C.J. No. 2125, November 1, 2010, British Columbia Supreme Court, J.S. Sigurdson J.

The issue in this case was the scope of a “pollution exclusion” clause contained in a policy of insurance issued by the defendant insurer to the plaintiff insured in respect of the insured’s vacation home. The insured sought a declaration of coverage in connection with a property damage claim that occurred when an above-ground storage tank for home heating fuel leaked and dispersed the oil into the soil surrounding the insured’s vacation home causing damage to the home. The insured’s application did not concern coverage for liability to third parties as no such claims were advanced. However, the insured incurred substantial cost in removing soil and repairing damage to his home.

The clause in issue provided as follows:

We do not insure:

8) loss or damage caused by contamination or pollution, or the release, discharge or dispersal of contaminants or pollutants.

The court concluded that the plain and ordinary meaning of the words is that an oil leak of the magnitude that occurred in this case is damage to property caused by contamination or pollution or amounts to the release, discharge or dispersal of contaminants or pollution on the insured’s property. Accordingly, the court found that the insured’s claim was excluded by the terms of the pollution exclusion clause.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP.

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