Insurance Coverage for Consequential Damage – A Reminder

A recent decision of the Alberta Court of Appeal reminds us that consequential damage, resulting from faulty or improper material, workmanship or design, may still be covered under condominium insurance policies. The court ruled that the costs to address risks resulting from faulty work were covered by the condominium’s insurance policy. The distinction between “faulty work” and the “consequences of faulty work” is important under Ontario condominium law because of Section 99(3) of Ontario’s Condominium Act, 1998, which stipulates that an exclusion in the insurance required by this section is not effective with respect to damage resulting from faulty or improper material, workmanship or design that would be insured, but for the exclusion.