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UPDATE: The Top Class Actions Canada Coronavirus Business Interruption Insurace Coverage investigation is now open. If you are a British Columbia business owner who was forced to temporarily close due to COVID-19, and had your insurance claim denied, submit your information here!
Best Western, Hampton Inn, Home2 by Hilton, and other Canadian hotel chains are pursuing a class action lawsuit in Canada against Aviva Insurance Company of Canada after the insurer denied their loss of business income coverage during the COVID-19 shutdown orders. Closures and restrictions were implemented beginning in March after the World Health Organization declared the COVID-19 outbreak a pandemic.
Lawyers representing the hotel chains argue that Aviva Insurance Company of Canada was “in breach of contract when it denied the hotels’ loss of business income coverage after the federal and provincial governments declared states of emergency, restricting their business, due to the outbreak of COVID-19.”
If the Aviva Insurance Company class action lawsuit is certified, Class Members would include all hotels insured under an Aviva commercial insurance policy issued under the insurer’s hotel program.
In response to the Aviva Insurance Company class action lawsuit in Canada, a spokesperson for Aviva Insurance Company reportedly acknowledged that the COVID-19 pandemic has “severely impacted” the hospitality industry.
“Unfortunately in this instance there is no coverage for provincial-wide shutdown orders as a result of a worldwide pandemic,” the Aviva Insurance Company spokesperson said.
John Neal, chief executive of Lloyd’s of London, reportedly told the Financial Post earlier this month that some insurance companies have developed pandemic-specific coverage, but there has historically been little interest in such coverage.
Neal noted that German reinsurer Swiss Reinsurance Company Ltd. offered a pandemic product following a 2014 outbreak of Ebola in West Africa. “Nobody bought the coverage — not a single customer,” he said.
Aviva Insurance Company Facing Multiple Class Action Lawsuits
Aviva Insurance Company is no stranger to COVID-19 insurance coverage class action lawsuits. The insurer is already facing multiple class action lawsuits accusing it of failing to adhere to the Aviva insurance contract when it refused to pay business interruption claims filed by policyholders following the COVID-19 shutdowns.
The Royal Canadian Legion is the plaintiff in one of the Aviva Insurance Company class action lawsuits in Canada and accuses the insurance company of denying its Aviva insurance claims based on a narrow reading of their policies. More than 600 Legion branches are named as plaintiffs in that case.
The plaintiffs assert that their Aviva insurance contract terms required coverage for shutdowns due to “an outbreak of a contagious or infectious disease that is required by law to be reported to government authorities.”
According to Royal Canadian Legion’s Aviva class action lawsuit, Aviva Insurance maintains that the term “outbreak” does not apply to the COVID-19 pandemic.
The plaintiffs in that Aviva Insurance Company class action lawsuit are seeking $20 million in damages.
Another Aviva Insurance Company class action lawsuit was filed by a group of Canadian businesses who accuse the insurer of wrongfully denying business interruption claims stemming from the COVID-19 pandemic. Lead plaintiff Nordik Windows Inc. says it had to shut down operations for several months due to the COVID-19 pandemic and the related government shutdowns intended to slow the spread.
Earlier this month, a similar class action lawsuit in Canada was filed against a number of property and casualty insurance companies, including Aviva Insurance Canada. The Canada class action lawsuit, which was filed by Booster Juice operators and two optometry businesses, accuses the insurance companies of breaching the terms of their insurance contracts and reportedly says they “acted in bad faith in not fulfilling Business Interruption insurance during the pandemic.”
Other insurers named in the COVID-19 insurance coverage class action lawsuit include Co-Operators General Insurance Co., Desjardins General Insurance Services Inc., Economical Mutual Insurance Co., Lloyd’s Canada Inc., and Travellers Insurance Company of Canada.
The hotel industry is far from the only industry to take a massive financial hit during the COVID-19 pandemic. Plaintiffs from many other industries, including restaurants and massage therapists, have filed class action lawsuits in Canada against their insurance companies seeking compensation for the business interruption losses they suffered during the COVID-19 shutdown orders.
The COVID-19 pandemic has spawned a great deal of legal confusion. Businesses and insurers are fighting in court to determine what type of business interruption coverage, if any, applies during a global pandemic. A growing number of consumers are also asking the courts to help them obtain refunds for events that were cancelled due to the pandemic. Universities, airlines, and event ticket sellers have been hit with COVID-19 related class action lawsuits in Canada.
Inevitably, the COVID-19 pandemic has led to fatalities, leading to class action lawsuits challenging the safety measures implemented by various facilities. Meat-packing plants, prisons and long term care facilities have faced allegations that they took inadequate measures to prevent the spread of COVID-19, leading to unnecessary sickness and death.
COVID-19 seems to leave no industry untouched. Canada’s legal system has also faced significant delays due to the pandemic. Many courts have kept their doors closed for months, using teleconferencing technology when available.
The constitutionality of mandatory face mask orders are also being challenged in court.
What do you think about the Aviva Insurance Company class action lawsuits? Should insurance companies pay policyholders’ business loss claims filed due to the COVID-19 pandemic? Tell us your thoughts in the comment section below!
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UPDATE: The Top Class Actions Canada Coronavirus Business Interruption Insurace Coverage investigation is now open. If you are a British Columbia business owner who was forced to temporarily close due to COVID-19, and had your insurance claim denied, submit your information here!