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Exceptions to exclusions in insurance contracts

As explained above, exception clauses are provisions which take risks which were originally covered but then excluded by exclusion clauses, and put them back into coverage. In other words, exception clauses do not create coverage, but just limit the applicability of exclusion clauses:
 
Exceptions also do not create coverage - they bring an otherwise excluded claim back within coverage, where the claim fell within the initial grant of coverage in the first place… Because of this alternating structure of the CGL policy, it is generally advisable to interpret the policy in the order described above: coverage, exclusions and then exceptions. 
(Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33 at para. 28).
 
Where a loss is excluded by two separate exclusion clauses which could each independently prevent exclude coverage, but there is an exception to one of those exclusions then, if there are two causes of the loss, one being excluded and one being covered on account of the exception to the other exclusion, then there will be coverage unless the policy is clear that there is no coverage when one of the contributing causes is excluded. In particular, the wording of the exception should be reviewed to see whether the exception refers to other exclusion clauses that might be applicable to the loss.

 

 
This book was written by Michael Dew, a Vancouver lawyer who practices civil litigation, including representing persons who have been denied coverage under property insurance policies, or liability insurance policies. If you have been denied insurance coverage and require assistance with making a claim against your insurer call Michael at 604 895 3160.