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A class action lawsuit has been launched against Gore Mutual Insurance Company after they allegedly unlawfully denied coverage for business interruption claims amid the COVID-19 pandemic.
The Plaintiff and Class Members say their companies have been affected by business interruptions during the COVID-19 outbreak and shutdowns, but they allege they have been denied damages from their insurance policies. The business interruption insurance class action lawsuit Canada claims the Class Members insurance policies explicitly state they will be covered if business income was lost due to infectious diseases. The business interruption insurance class action lawsuit is seeking punitive damages for breach of contract by Gore Mutual Insurance Company.
The COVID-19 claim denial class action lawsuit is accusing Gore Mutual Company of denying business interruption coverage despite providing a policy that includes “all risks” coverage for losses due to diseases.
This is not the first business interruption insurance class action lawsuit Canada claiming a breach of contract for denying coverage due to business losses. More than 20 Canadian insurance companies are facing class action lawsuits after denying claims from businesses that have experienced high costs and reduced income during the pandemic.
Many of the COVID-19 coverage denial class action lawsuits allege that the Class Members have been denied coverage during the pandemic despite having a policy that covers loss of income relating to business interruption.
On March 17, 2020, British Columbia declared a public health emergency after the province identified a total of 186 coronavirus patients.
The COVID-19 coverage denial class action lawsuit claims the plaintiff contacted their insurance company regarding business interruption around March 18, 2020, to file a claim, but the claim was denied during the call with the insurance company.
According to the business interruption insurance class action lawsuit, the insurance company delivered blanket denials for the Class Members who tried to file a claim for business interruption due to the COVID-19 outbreak. The Class Members are seeking relief due to breach of contract and are demanding additional punitive damages as well as the costs spent in the trials. The business interruption insurance class action lawsuit argues that the Class Members have not breached any of the policy obligations, and yet, the insurance companies have.
According to the business interruption insurance class action lawsuit, the “all-risk” policy covers losses as a result of the Public Health Authority’s announcement of an outbreak of an infectious human disease within 50 km of the policyholders’ business. Public health officials have specified that outbreaks of the coronavirus have happened within 50 km of the Class Members’ businesses, according to the business interruption class action lawsuit Canada.
According to the unlawful claim denial class action lawsuit, a sweepingly broad policy that covers all risks can only be limited by particular exclusions, including a pandemic condition. However, the policies held by the Class Members do not contain any specific exclusion, according to the class action lawsuit Canada.
This COVID-19 coverage denial class action lawsuit Canada is seeking an indemnity agreement declaring insurance coverage for any losses due to necessary business interruption.
Furthermore, the business interruption insurance class action lawsuit argues the infectious disease extension ensures that the businesses are insured “in consequence of an outbreak or occurrence or a notifiable human contagious or infectious disease within a radius of fifty kilometers of the location described on the declarations, and confirmed as such by the Public Health Authority.”
The COVID-19 coverage denial class action lawsuit was filed in British Columbia on behalf of all Canadians (excluding Quebec) who suffered business interruption and had insurance claims denied although the policies included an infectious disease extension.
What do you think will be the outcome of this proposed class action lawsuit? Do you think insurance companies are obligated to pay for business interruptions during the COVID-19 pandemic? Tell us your thoughts in the comment section below!
The lead Plaintiff and Class Members are being represented by Douglas Lennox and Darren Sall of Klein Lawyers LLP.
The Business Interruption Class Action Lawsuit is A Catered Affair Hospitality Inc. v. Gore Mutual Company, Case No. NEW-S-S-229603, in the Supreme Court of British Columbia, Canada.
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