No duty to defend when negligent acts within a policy period cause damage outside the policy period

The May 11, 2015 decision of the B.C. Supreme Court in CNS v. Intact, 2015 BCSC 767 confirmed that a duty to defend is not triggered when an insured’s negligent acts or omissions during a policy period cause damage or an injury after the policy has expired. 

The insured homeowners lived in a house at the top of a steep slope from 1958 to 2004. During that time they made a number of alterations to the property that caused the slope below the home to become unstable and part of that time they were insured by an Intact homeowner policy.

In 2004, the insureds sold the home, moved and became insured by a new CNS personal policy. 

In 2005 a landslide originated at the insureds’ former property and as a result there was damage caused to a home at the bottom of the slope. 

Law suits were commenced against the insureds for causing the landslide and CNS defended them but Intact declined to participate in the defence. CNS claimed equitable restitution or contribution from Intact and CNS’s claim depended on the court finding that Intact had a duty to defend the insureds. 

The issue was whether the common words “accident” and “occurrence” in the Intact policy required that some resulting damage occur during the policy period for a duty to defend to be triggered. The court concluded that there was no reasonable expectation that Intact would be obliged to defend the insureds for damage incurred after the Intact policy had expired and CNS’s claim against Intact was dismissed in what might be described as a landslide victory for Intact.