Wrap-up policy coverage ruling

Recently, the British Columbia Supreme Court did not extend wrap-up policy coverage to a company that performed no installation, construction, or supervisory work on a building project. The insurer denied coverage pursuant to the policy’s definition of an insured, which excluded organizations that only supplied materials to the project. The plaintiff argued that because it manufactured and supplied the materials, it was not merely a supplier and therefore an insured. The court held that such an interpretation was not commercially reasonable and failed to consider the essential nature of a wrap-up liability policy. The reasons are a helpful reminder of the key factors for consideration when interpreting such insurance provisions. Jason Newton’s case brief analyzing the ruling can be found here.