Green Rise Foods lost its greenhouse tomato crop after excessive carbon monoxide was emitted by a malfunctioning boiler and the problem went undetected by a malfunctioning monitor. Its insurer denied the claim under policy wording that included an exhaust gas exclusion and provisions dealing with machinery breakdown.
The motion judge granted summary judgment for the insurer. The Court of Appeal reversed that result in Green Rise Foods Inc. v. N.V. Hagelunie, 2026 ONCA 334.
The central difficulty was causation. The loss did not arise from a single isolated event. It developed through a sequence involving equipment failure, excessive emissions and a monitoring failure. The Court of Appeal held that the coverage analysis could not simply identify carbon monoxide as the immediate cause and stop there.
Insurance coverage analysis generally begins with the insured establishing that the loss falls within the initial grant of coverage. The insurer then bears the burden of establishing an applicable exclusion. If an exception to that exclusion is engaged, the burden can shift again. The Court found that the earlier decision had not adequately worked through those steps or made the factual findings needed to decide how the machinery breakdown provisions operated.
That did not mean Green Rise had established coverage. The Court of Appeal concluded that genuine issues remained and returned the matter for trial.
The case is significant because complex property losses often involve chains of events. A mechanical failure can lead to contamination, water damage, fire, spoilage or another immediate form of physical loss. Policy wording may treat those events differently. Identifying only the final mechanism of damage can therefore produce the wrong coverage analysis.
For businesses buying specialized property coverage, Green Rise also illustrates why exclusions and their exceptions need to be read together. An exclusion that appears decisive on its own may sit within a broader structure that changes how the loss must be analyzed.
The appeal was allowed, but the ultimate coverage dispute remains unresolved pending trial.