Developers requesting crane or shoring easements over a neighbouring properties will typically offer an insurance policy. However, sometime not enough attention is paid to whether the insurance will provide the owner of the property granting the easement the kind of coverage and peace of mind they should expect. Such policies should assure the owner of the property granting the easement that they will not have to go through the trouble of having to bring a claim against the developer for damage arising from its construction project.
The plaintiff, property owner in the case of Skipper Properties Ltd. v. Zurich Insurance Company Ltd., 2015 BCSC 225 recently learned the hard way that the type of insurance offered under an easement agreement requires special attention.
In that case, the plaintiff had granted a crane and shoring easement to a developer. A term of the easement agreement provided that the developer was to include the plaintiff as a named insured under the developer’s wrap-up comprehensive general liability policy.
Skipper alleged that the developer had damaged its property as a result of the developer’s construction project and sought to coverage of the damage under the wrap up policy. However, the insurer denied the claim on the basis that the policy did not cover the loss.
The court agreed, ruling that the wrap up policy did not cover the damage to property and was a liability policy only. In other words, the insurance policy required Skipper to prove or settle its claim for damages against the developer. Only once liability had been established against the developer would the insurer step in to cover the loss to the extent of the developer’s liability.
Effectively, the insurance policy provided none of the peace of mind that the plaintiff expected to get from the policy and forced them to seek their damages through the developer.
Homeowners and strata corporations that are approached to grant easements should insure that the policy granted under the easement agreement provides for a property insurance policy that will cover damage to property from the developer’s construction project. Homeowners should also review the policy taken out to make sure that it will provide the desired coverage.
WHAT WE DO
Lesperance Mendes has experience negotiating and reviewing easement agreements on behalf of homeowners and strata corporations approached by developers. We can assist you negotiate, review and implement your strata corporation’s easement agreement. For more information on our strata law practice, contact Paul G. Mendes, partner at email@example.com phone 604-685-4894.