Published in: Insurance Law Newsletter - 19.May.16 May 19, 2016

Case Summary: Cost of roof upgrades fell within coverage under insurance policy’s bylaw provision

Insurance law – Property insurance – Coverage – Chain of causation – By-law coverage – Exclusions

954470 Alberta Ltd. (c.o.b Centre South) v. Sovereign General Insurance Co.

Damage from an insured peril to a roof triggered municipal inspections which revealed the strength of the roof in undamaged areas required upgrading. The increased cost of repairing the roof fell within coverage under the bylaw provision.

[2016] A.J. No. 293

2016 ABQB 185

Alberta Court of Queen’s Bench

March 30, 2016

D.J. Manderscheid J.

The insured owned a strip mall. Roof joists were damaged after water flowed into an unheated roof drain and froze. This was an insured peril. After inspection by an engineer, it was discovered that the roof was damaged in other areas from other causes and needed repair. It was also discovered that the construction of the roof was unacceptable and appeared to meet neither the current building code, nor the code at the time of construction. The City required additional roof joists to be added. The insured did this and then sought indemnification for the cost of the roof joists damaged by the insured peril as well as the additional roof joists required to be repaired by the City. The insurer refused to indemnify the insured for the cost of the additional roof joists.

The court found there was coverage for the cost of repairs to all of the replacement roof joists under the bylaw coverage provision. The court noted that the City would not have ordered the additional repairs, but for the initial damage by the insured peril which resulted in the inspection and so the increased cost to repair the building was a result of a peril insured against. It also found that the cost increase was necessary and arose from the enforcement of the minimum requirements of a by-law.

The court found coverage was not removed by the exclusion clause preventing recovery for loss or damage caused by an enforcement of any law which makes it impossible to restore the property as it was immediately before the loss. The court found the exclusion did not apply because the insured was not prevented from doing anything, rather the City was requiring the insured to take some positive action. The court also found the exclusion clauses for inherent vice and faulty or improper material or design did not apply.

This case was digested by Djuna M. Field and edited by David W. Pilley of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact them directly at or or review their biographies at