The Ontario Court Of Appeal Leaves Window Cleaners Out To Dry On Window Replacement Costs

The Ontario Court of Appeal's recent decision in G & P Procleaners and General Contractors Inc. v. Gore Mutual Insurance Co. ["Procleaners"]1 is an interesting example of the application of the "your work" exclusion, particularly since the Court rejected the approach to policy interpretation that the Newfoundland Court of Appeal gave to an exclusion with very similar wording.

Procleaners involved a contractor who was hired to clean the windows of a newly constructed commercial building. Some of the windows were damaged by cement debris that adhered to the wet windows during cleaning. The debris came from stone cutting machines that were being used onsite at the time of cleaning. The contractor reimbursed the owner of the building approximately $134,000 for the damage to the windows and then sought indemnification under its commercial general liability policy (the "Policy").

The coverage grant in the Policy insured against an "occurrence" defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."2 The contractor argued that the damage to the windows arose as a result of unforeseen environmental conditions at the construction site (e.g., the airborne debris from the stone cutting machines) and was therefore an "occurrence" under the Policy triggering coverage. The insurer denied the claim on the basis that it was excluded by the "your work" exclusion clause in the Policy, which read as follows:

2. Exclusions...

(h) "Property damage" to: . . .

(v) that particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the "property damage" arises out of those operations; or

(vi) that particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it.

The motions judge agreed with the insurer, finding that the property damage was excluded by the Policy. On the motion, the contractor had admitted that the scratches on the windows resulted from, or arose out of, its window cleaning operations.3 The contractor did not rely on any exception to the "your work" exclusion clause.

An "occurrence" is an event that causes property damage that is neither expected nor intended by the insured.4 In the reasons for judgment of the Court of Appeal, Justice Hourigan agreed with the motions judge that the "occurrence" causing property damage in this...