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Cases in which losses were held to NOT be accidents

Improper installation of boat engines not an accident
In Harbour Machine Ltd. v. Guardian Insurance Company of Canada 1985 CanLII 369 (B.C.C.A.) engines had been installed improperly in a boat.  This defect was discovered after a propeller fell off, but the propeller falling off was a relatively insignificant symptom of the primary problem, which was that the engines had been improperly installed.  The Court held that the improper installation and workmanship was not an accident and had, apart from the minor propeller incident, caused property damage: 
[A]part from the matter of the propeller, could I see any possible basis for holding that there was either an accident or an occurrence.  Essentially, the cost of remedying the defect arose out of the faulty planning and design of the installation and the poor workmanship in carrying it out.  Apart from the minor matter of the propeller, there was nothing which could constitute a mishap or occurrence, the event which must happen before there can be said to be either an accident or an occurrence. 
(Harbour Machine Ltd. v. Guardian Insurance Company of Canada 1985 CanLII 369 at para. 17 (BCCA)).
Defective transformers not an accident
In Celestica Inc. v. ACE INA Insurance, 2003 CanLII 12210 (Ont. C.A.) the insured provided defective transformers for incorporation into photocopy machines.  The transformers had to be replaced, but the Court said mere defective design or manufacture did not constitute an occurrence or accident.  