The Case Of The Faulty Crouton Dryer

Intact Insurance has convinced an Alberta court that the “faulty workmanship” exclusion applies in a disputed commercial fire claim but the carrier still has to pay more than $600,000 to a bakery, mainly because the judge rejected Intact’s definition of “oven.”

Bowness Real Estate Corp v AXA Pacific Insurance Company, released this past Wednesday by the Alberta Court of Queen’s Bench, arose in 2012 after a crouton-making machine caught fire twice.

The end result is Intact was found not to have acted in bad faith, is not on the hook for $8.37 million a bakery claimed in lost profits and two fires ultimately resulted from faulty workmanship in the custom-made house-sized bread crumb toaster.

Though the claimant argued at trial it should get $1.4 million because the machine was damaged beyond repair, Justice Bernette Ho ruled the client should only get about $264,000 to cover the cost of losing the machine itself. [That does not include business interruption].