Third party insurers were required to indemnify defendant engineering firm and principal of defendant firm for that portion of the plaintiff's damages that related to design errors and not delay.

[2014] O.J. No. 5535

2014 ONSC 6802

Ontario Superior Court of Justice

M.J. Nolan J.

September 30, 2014

The plaintiff subcontractor brought an action for damages for breach of contract and negligence against the defendants, an engineering company and the principal of the engineering company in his personal capacity, as a result of events related to the construction of an addition to an existing parking garage. The claims related to alleged delay and design deficiencies. The defendants brought third party proceedings against a consortium of insurance companies who provided insurance coverage to them. The policies contained a specific exclusionary clause related to any damages arising from the failure to produce drawings, specifications, or any other document on time.

The action proceeded to trial. The court found the defendant company liable to the plaintiff in contract and the defendant engineer liable to the plaintiff in negligence. The court assessed damages and allocated 45% of the damages to delay and 55% of the damages to errors. In the result, the third party insurers were required to indemnify the defendants for the portion of the damages which were attributable to errors.