News + Insights

On February 20, 2024, the Ontario Superior Court of Justice released its decision in City of Thunder Bay v. Great American Insurance Company, 2024 ONSC 1085, an insurance coverage application that happens to be the first time a Canadian court has interpreted a "lead exclusion" clause in a Comprehensive General Liability (CGL) insurance policy. Such lead exclusion clauses are common to general liability insurance policies for municipalities in the United States, and are becoming increasingly common in Canada. 

AGB partner, Gord McGuire, successfully represented the City of Thunder Bay, obtaining a judicial declaration that the City's insurance policy with the respondent insurance company was engaged, that coverage was not excluded, and that the policy accordingly imposed a duty on the insurance company to defend the City in four lawsuits, including a class action, commenced against the City by residents and other local stakeholders in relation to alleged leaking pipes.

In allowing the City’s application, the Court declined to interpret the lead exclusion clause as broadly as the insurance company requested. The Court held that the exclusion did not extend to claims for property damage incurred incidental to the treatment for lead, in circumstances where lead was not the cause of the damage.

The Ontario Superior Court of Justice's reasons for decision can be viewed here. The case has also been reported on locally in Thunder Bay in TB News Watch, "Insurance company must defend city over pinhole leaks in water pipes".