A Reminder of the Basic Differences Between a Builder’s Risk Policy and a Liability Policy

In the recent case of Bridor inc. c. 90784497 Québec inc., 2022 QCCS 2496, the Superior Court ruled on the fundamental distinctions between a Builder’s Risk policy and a liability insurance policy.

Bridor inc. [Bridor] had retained the services of Construction Milkado [Mikado] as a construction manager to oversee the expansion of its plant. In the main claim, Bridor alleged that Mikado had committed three faults in its management of the construction, one of which consisted of damages caused to architectural panels that made up the outside walls of the expansion. The project and the parties were insured under two policies issued by Starr Insurance & Reinsurance Limited [Starr]: a Wrap-Up liability insurance policy and a Builder’s Risk insurance policy.

In a Wellington type application, Mikado asked the Court to order Starr to take up its interest, and defend it for the damage caused to the panels in virtue of the Builder’s Risk policy

The Court first noted that the Civil Code of Québec provides for two types of damage insurance: liability, and property. Justice Andres C. Garin observed that the legal obligation to take up an insured’s defence, expressed in article 2503 CCQ, is in subdivision III.3 of the chapter of the Code that applies exclusively to liability insurance.

Justice Garin then observed that Builder’s Risk policies are usually property insurance policies . After examining Starr’s policy, the Court concluded that it was in fact a property insurance policy that did not provide for the insurer’s obligation to take up its insured’s interest in case of a claim or lawsuit.

Since Mikado was only raising the Builder’s Risk policy, the Wellington application was dismissed.


  • Builder’s Risk policies are generally property insurance.
  • The object of the insurance must be determined through an analysis of the warranty clause, that defines the scope and nature of the protection provided;
  • In all cases, it is essential to examine all of the clauses in the policy since its designation may sometimes fail to reflect accurately all the coverage that it in fact provides;
  • An insurer is not required to take up its insured’s interest under a Builder’s Risk insurance.


Articles in the same category

The strict standard applicable to the exclusion clause for suicide

On February 3, 2023, in Bolduc v. SSQ Assurance, 2023 QCCS 266, the Superior Court once again reminded the insurance industry that strict compliance with the rules governing the drafting of exclusion clauses, particularly in the case of suicide, is essential to avoid unfortunate consequences for insurers. The facts in dispute On November 23, 2006, […]

Where do you keep your corrosive cleaner?

The Facts La Capitale was claiming reimbursement of more than $137,000 in compensation paid to its insureds following water damage that occurred in their home on February 2, 2017. La Capitale was thus suing the general contractor who built the residence in 2012, the distributor of the faucet whose flexible pipe failed, as well as […]

The Insured Left Its Imprint

Was there a sufficient insurable interest for this insured whose building housed a printing business owned by a different entity with the same shareholder? On January 12, 2023, the Honourable Dominique Poulin of the Superior Court of Quebec answered this question in a decision on the notion of insurable interest: 9208-9499 Québec inc. c. Royal […]

The boat disappears: the claim sinks!

Was it a theft or was it a fraud? This was the question the Quebec Court and the Court of Appeal had to answer in the matter of Christian Desmeules Beaumont v. Société d’assurance Beneva inc. (2023 QCCA 50 (2021 QCCQ 7298). An insured (“the insured”) claimed the amount of $38,303 from its insurer who […]

Animaux sauvages à déclaration obligatoire

Only available in French Que faire lorsque l’on retrouve un animal blessé ou mort sur la route? Avant d’entreprendre toute procédure d’enlèvement de la carcasse de l’animal concerné, la Loi sur la conservation et la mise en valeur de la faune (ci-après « la Loi ») (R.L.R.Q. Chap. C-61.1) impose à tous et toutes, dans certaines situations, […]

Crisis averted on the Canal!

With unpredictable weather at an all-time high, cities and municipalities are facing increased claims resulting from pedestrian falls. Even on sunny days, cities are not immune from potential risks, as was the case in a recent decision rendered by the Court of Quebec in Unlusoy v. Ville de Sainte-Anne-de-Bellevue 2022 QCCQ 9681. As highlighted by […]

Be the first informed:

Subscribe to our communications