Our Work

Gord McGuire and Sean Blakeley acted for the insured City of Thunder Bay in successfully resisting an international insurance company’s appeal concerning the duty to defend.

The City of Thunder Bay has been named as a defendant in a number of civil actions that allege that the City's introduction of sodium hydroxide into the City’s water supply has caused widespread property damage. Thunder Bay asked its general liability insurers for the relevant policy periods to defend these actions in accordance with the policies’ duty to defend. One of the City’s insurers, Great American Insurance Company, declined to defend, citing the policy’s exclusion entitled “Lead”, which it argued was engaged because the City had introduced sodium hydroxide into the water system as a lead remediation measure.

Thunder Bay successfully brought an application seeking to compel Great American to defend the actions. The Application Judge found that the Lead exclusion was ambiguous and that, in any event, there was at least a mere possibility of coverage under the policy. Accordingly, the duty to defend was engaged.

Great American appealed the Application Judge’s decision. The Court of Appeal for Ontario dismissed the appeal, finding that Great American had not shown any error in the application judge’s analysis.