Case Report: Tataryn v. Axa Insurance - What is “under construction”?

  • December 02, 2021

A 2020 decision of Roger, J. dismissed a summary judgment motion by an insurer based on its reliance on an exclusion in a homeowner’s policy.  Both parties agreed that the exclusion clause was unambiguous; possibly this was a strategic admission.  The insurer could not credibly take any other position.

The parties disagreed on the what the so-called unambiguous exclusion clause meant. The exclusion clause read:

We do not insure loss or damages… [19.] caused by water unless loss or damage resulted from… [(b)] the sudden and accidental escape of water or steam from within a plumbing, heating, sprinkler or air conditioning system or domestic water container, which is located inside your dwelling … but we do not insure loss or damage [viii.] occurring while the building is under construction, vacant, or unoccupied, even if we have given permission. [Emphasis added by the Court of Appeal.]

As is all too common in insurance policies, a key term was not defined in this contract of adhesion.  In this case “under construction” was not defined.