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Insurance broker fires back at Eastway Tank

Smoke billows into the air following the explosion on Jan. 13, 2022, at Eastway Tank, Pump & Meter Limited in south Ottawa.  (Submitted by Ty Littleton - image credit)
Smoke billows into the air following the explosion on Jan. 13, 2022, at Eastway Tank, Pump & Meter Limited in south Ottawa. (Submitted by Ty Littleton - image credit)

An Ottawa insurance broker is hitting back at accusations that it failed to secure adequate coverage for the industrial business where an explosion in 2022 left six workers dead.

In a statement of defence filed by Gifford Carr Insurance Group last Thursday, issued in response to a civil lawsuit launched in January by Eastway Tank, Pump and Meter, the insurance broker denied any professional wrongdoing or negligence, and called the tanker manufacturer's damage claims "excessive" and "exaggerated."

"After the explosion, significant insurance proceeds were paid out," according to Gifford Carr.

Eastway alleged it lost approximately $13 million because Gifford Carr failed to ensure the company had adequate business interruption coverage at the time of the explosion on Jan. 13, 2022.

Rick Bastien, Etienne Mabiala, Danny Beale, Kayla Ferguson and Russell McLellan died in the blast while a sixth employee, Matt Kearney, succumbed to his injuries in hospital the next day.

Eastway also claimed it was underinsured for "employee tools" and the buildings at its Merivale Road site, which were damaged "beyond repair" after the violent explosion that left the decades-old business "devastated."

None of these claims have been tested in court.

Gifford Carr was Eastway's broker for over 20 years before the blast. In its statement of defence, the broker said Eastway had active coverage for commercial property, business income and commercial general liability at the time of the explosion.

Any damages experienced were due to Eastway's own negligence, including failing to "make appropriate enquiries" about the type of coverage it required and failing to provide accurate information or documentation, according to Gifford Carr's response.

Clockwise from top left: Matt Kearney, Etienne Mabiala, Danny Beale, Rick Bastien, Russell McLellan and Kayla Ferguson were killed by the Eastway Tank explosion.
Clockwise from top left: Matt Kearney, Etienne Mabiala, Danny Beale, Rick Bastien, Russell McLellan and Kayla Ferguson were killed by the Eastway Tank explosion.

Clockwise from top left: Matt Kearney, Etienne Mabiala, Danny Beale, Rick Bastien, Russell McLellan and Kayla Ferguson were killed by the Eastway Tank explosion. (Submitted photos)

Separate court matter looming

The filing of the statement of defence comes at a key time for Eastway as it deals with other legal matters.

On Friday, a guilty plea is expected in the Ministry of Labour's case against the company and its owner Neil Greene for alleged violations under Ontario's Occupational Health and Safety Act (OHSA) "on or about" the day of the explosion.

In its statement of defence, Gifford Carr alleges Eastway failed to mitigate any damages.

"In the alternative," the response went on to allege, "due to [Eastway's] violations of the [OHSA], [its] ability to operate a garage business has been impaired by [its] own wrongful conduct from which [it is] not entitled to benefit or be unjustly enriched through the payment of any damages."

Gifford Carr president Matthew Carr added in a statement emailed to media on Monday that he regretted the lawsuit "has shifted focus away from the victims and their families who have endured so much as a result of this tragic event."

CBC reached out to Greene and his lawyer for comment but did not hear back by deadline.

A concurrent criminal investigation into the explosion continues, the Ottawa Police Service confirmed on Tuesday.