Insurer bargained for security and security differed from damages

Ontario civil | Construction Law | Bonds and sureties | Bonds

In order to obtain construction bonds for building project, respondent general contractor undertook to applicant insurer that it would direct certain funds from owner of building to be held in trust to be available to indemnify insurer if bonds were triggered. General contractor did not honour its undertaking. Insurer brought application for mandatory order compelling general contractor to comply with its undertaking. Application was granted. General contractor appealed. Appeal dismissed. It was not agreed that motion judge erred in finding that damages were inadequate remedy. Insurer bargained for security and security differed from damages.

Berkley Insurance Company v. Rob Piroli Construction Inc. (2018), 2018 CarswellOnt 1284, 2018 ONCA 74, Laskin J.A., Sharpe J.A., and Fairburn J.A. (Ont. C.A.); affirmed (2017), 2017 CarswellOnt 7810, 2017 ONSC 3145, Perell J. (Ont. S.C.J.).

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