Business Interruption Insurance Class Action Lawsuit Alleges Contract Breach

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!

A class action lawsuit has been filed against more than 20 Canadian insurance agencies who have been accused of violating their contracts with business owners. The business interruption insurance class action lawsuit alleges the insurance companies have refused to compensate policyholders for business interruptions due to the coronavirus pandemic.

As the COVID-19 pandemic spread throughout Canada, many businesses were forced to close down, or at least drastically slow operations due to government-mandated restrictions and shutdowns. As a result, companies suffered loss of business and may still be suffering losses. The class members allege they have paid for insurance that covers business interruption, but the insurance companies named in the business interruption insurance class action lawsuit have failed to honour agreements and cover business losses. In some cases, the insurance companies have made it increasingly difficult to formally file a claim, because they have allegedly denied covering losses even prior to the claims being submitted. 

According to the business interruption insurance class action lawsuit, the companies impacted by the coronavirus feel as though the pandemic and business interruption were out of their control. They also feel undermined by the insurance companies’ refusal to protect them and reimburse them for losses during a time when they need it most. 

In recent news, there have been multiple other class action lawsuits against insurance companies, claiming that insurers are refusing to pay for damages concerning business interruption due to the pandemic. Intact insurance company and Aviva are defendants in this class action lawsuit as well as multiple others filed during the COVID-19 pandemic.

According to the business interruption insurance class action lawsuit, one of the plaintiffs, Suit Supply, purchased insurance from Travelers Insurance Company of Canada and made payments faithfully. When they submitted a claim for business interruption insurance, it was allegedly immediately rejected by their insurance company. Suit Supply is fighting back because according to their policy, as stated in the business interruption insurance class action lawsuit, they are entitled to damages lost during the indemnity period.

The class members all have similar requests from the insurance companies. The accused insurance companies have allegedly violated several civil policies by refusing to reimburse the class members for business interruption. The losses of the class members include the period of time when they were forced to close by the order of government authorities. According to the business interruption insurance class action lawsuit, some class members are also entitled to extra expenses on top of damages for business income.

The goal of the class members is to receive the relief they believe they are entitled to, according to their specific policies. Collectively, the class members are seeking:

• Acknowledgment that the insurance companies breached the terms of their contracts
• An admission that the insurance companies breached their common law duty of care
• A proclamation that the insurance companies are liable for conspiring to deny the class members’ coverage due to the pandemic
• A declaration that the insurance companies acted in bad faith by refusing to pay out business losses
• Punitive damages in the amount of $100,000,000.00 or an amount that the court considers fair 

The class members’ insurance policies state similar information. According to the business interruption insurance class action lawsuit, the policies do not exclude “contamination by pandemics” but none of the language in the policies explicitly states “COVID-19” as a factor. 

The class members accuse the insurance companies of negligence due to the contractual relationship. They believe the insurance companies owed them a standard of care as their faithful consumers. Civil conspiracy is alleged by the business interruption insurance class action lawsuit, specifically due to the insurance companies’ purported refusal to honour contracts and in some cases, not examine claims at all. The plaintiffs do not believe the insurance companies acted in good faith during their time of need. When the plaintiffs submitted business loss claims, they expected them to be fulfilled and they allegedly were not. The class members felt duped because they felt comfortable knowing they were insured, but when their attempts at collecting losses fell flat, they felt wronged.

As defined by the business interruption insurance class action lawsuit, “Class Members” means all persons and corporations in Canada, who had a contractual agreement with a defendant and experienced business interruption due to the coronavirus. 

What do you think about the business interruption class action lawsuit? Do you believe the plaintiffs are entitled to compensation? Tell us your thoughts in the comment section below! 

The class members are represented by Kirk Baert, James Sayce and Nathalie Gondek of Koskie Minsky LLP and Evatt Merchant and Christopher Simoes of Merchant Law Group LLP. 

The Business Interruption Insurance Class Action Lawsuit is Workman Optometry Professional Corporation, et. al. v. Aviva Insurance Company of Canada, et. al., Case No. CV-20-00643488-00CP, in the Ontario Superior Court of Justice, Canada.

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