Insurers of a London apartment building that partially collapsed during construction, killing two workers, are being sued by its owners for $4 million for refusing to pay damages for what’s alleged in court records to be “faulty or improper design.”

In a notice of application filed with the Ontario Superior Court of Justice, Nest on Wonderland Inc. is seeking court declarations that it has a valid policy binding on its insurer and is entitled to full coverage for physical damages or losses from the partial collapse nearly a year ago, including for delays to complete the project.

The company states that while Intact Insurance has agreed to cover some damages, it’s also “relying on a policy exclusion that excludes coverage for the cost of making good on faulty or improper design.”

Further to the application, Nest’s lawsuit alleges Intact “has misinterpreted its own policy by improperly classifying resultant damage as the cost of making good on faulty or defective design.”

Intact’s refusal to pay “meaningful indemnity” means Nest is suffering “further losses,” the notice states.

Those losses, according to the notice, include increased construction costs, fines, fees and penalties related to construction financing, loss of income and delays with construction, damage to the company’s financial credit and interest, penalties and charges on the mortgages and financing for the project.

The application was made by Andrew Graham, a lawyer for Harrison Pensa representing Nest.

Intact answered with a “notice of appearance,” stating it has received the application but has not yet responded to it.

Sean Miller, a lawyer with the Wallace Smith law firm in London, representing Intact, declined comment.

Intact Insurance could not be reached for comment.

The notice of application states that on Dec. 11, 2020 the partial collapse occurred after concrete was poured on the fourth floor of the structure.

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