The construction company that built the Johnson Street Bridge has been awarded a $250,000 insurance payout by the B.C. Supreme Court due to a clerical error on the policy.
PCL Constructors Westcoast Ltd. sued Royal & Sun Alliance Insurance Company when the insurance company insisted that a $520,330 water-damage claim for the new bridge’s foundations was subject to a $250,000 deductible, which PCL maintained did not apply.
Madam Justice Catherine Murray ruled in favour of PCL.
The dispute dates to February 2015, when water entered the formwork during a concrete pour, damaging the bridge foundations.
PCL filed a claim for the damage with Royal & Sun Alliance, the company contracted by the City of Victoria to provide builder’s insurance.
According to the judgment, Royal & Sun Alliance refused to pay any part of the claim for two years on the basis that PCL was not named as an insured party. In September, PCL finally received a payment of $270,330 after obtaining a court order.
But Royal & Sun Alliance continued to maintain that the deductible applied to the balance.
In her ruling, issued May 23, Murray said that the insurance policy did not comply with the Insurance Act because the front page of the policy did not contain the statement: “This policy contains a clause which may limit the amount payable.”
“It matters not if PCL was aware of the deductible. The cases are clear: if the words mandated by [Section] 31 do not appear on the front page of the policy, the deductible is not in effect,” Murray’s ruling said.
Murray noted that Royal & Sun Alliance had argued it would be wrong to allow PCL to escape paying the deductible solely due to a drafting error because it “would create an unfair windfall to the plaintiff and a corresponding deprivation to the defendant.”
However, Murray said, the law is clear.
“The respondent’s argument is based on the knowledge of the plaintiff. The law in B.C. is settled that [Section] 31 of the Insurance Act is to be strictly construed even when the insured knew of the deductible and agreed to it.”
Murray ordered Royal & Sun Alliance to pay $250,000 to PCL within 30 days, interest on $520,330.22 and costs.