Aviva Insurance Company Facing Canada-Wide Class Action Lawsuit

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 nation-wide class action lawsuit has been filed against Aviva Insurance Company over allegations it wrongfully denied business interruption claims filed by policyholders in the wake of the coronavirus pandemic.

According to Stockhouse, lawyers representing the proposed Class Members say that the class action lawsuit is worth up to $100 million in damages to businesses who had to shutter or reduce operations under COVID-19 restrictions. Businesses who held Aviva insurance policies allegedly attempted to make claims under the terms of their policy’s “contagious disease coverage.”

These claims were roundly denied by Aviva Insurance Company, however, because the company determined that the loss of business due to coronavirus does not constitute a contagious or infectious disease. The Aviva Insurance class action lawsuit contends that Aviva is turning to semantics to escape their obligation to pay the business interruption claims.

“Canadian businesses small and large have applied to Aviva for contagious disease coverage and have been denied coverage by Aviva, which takes the position that the global COVID-19 pandemic does not qualify as a contagious or infectious disease under the Policies,” contends a press release issued by lawyers representing the proposed Class Members.

According to the lead plaintiff Nordik Windows Inc., Aviva Insurance Company denied its loss of business claim after it had to shut down operations for several months.

“Aviva has allegedly failed to honour its good faith obligations to its policyholders with respect to business interruption claims resulting from the COVID-19 pandemic. This has put Canadian companies on the brink when they are most vulnerable,” states one of the lawyers representing the proposed Class Members in a press release.

In addition, the Aviva Insurance class action lawsuit contends that many businesses may not be aware that they have business interruption coverage through their Aviva Insurance Company policy. These businesses may not have submitted claims, notes the press release.

“Canadian businesses insured by Aviva should immediately review their policies to determine whether they include these significant coverages that are often referred to as Restrictive Access, Negative Publicity or Interruption by Civil Authority coverages,” say the lawyers representing the plaintiff in the proposed Aviva Insurance class action lawsuit.

According to the press release, many Canadian businesses have contacted the law firm representing Class Members in the proposed class action lawsuit filed against Aviva Insurance Company.

This is not the first class action lawsuit filed against Aviva over its business interruption coverage during the COVID-19 pandemic. Recently, the Royal Canadian Legion, representing hundreds of legions across the country, filed a class action lawsuit against Aviva Insurance Company. The complaint alleges that the legions, often linchpins of their communities, have been put in dire financial straits by the insurance company’s refusal to pay business interruption insurance claims.

The Canada-wide Aviva Insurance class action lawsuit lodged against Aviva Insurance Company is seeking compensatory and punitive damages.

Insurance Companies Faced With COVID-19 Claims and Lawsuits

According to Insurance Business Canada, insurance companies should expect to be inundated with lawsuits related to the denial of business interruption claims in the aftermath of the coronavirus pandemic.

“Pandemics, unlike other catastrophes such as a hurricane or an earthquake, are not limited by geography or time,” one insurance company’s executive officer remarked, according to reporters. “The loss potential from a pandemic, in practical terms, is infinite, and insurance companies have only finite balance sheets.”

According to Insurance Business of Canada, insurance industry executives contend that the wording in their policies excluding COVID-19 related business loss claims is clear. Further, industry executives say that forcing them to pay such claims would bankrupt these companies.

However, reporters say that the insurance industry should expect additional legal action as denials of coverage mount. Who will be responsible for these losses, estimated to be in the billions, according to Insurance Business Canada, is an open question.

In fact, the report states that New Jersey lawmakers are considering legislation that would require insurance companies to pay some business interruption claims, even if their policies excluded these claims.

Insurance company executives reportedly say that these policies were not priced to cover such claims and would be devastating for the industry. One executive told reporters that, in order to cover business losses, the government could step in.

Has your business suffered losses during the coronavirus pandemic? Have you made a claim under your insurance policy for loss of business or business interruption? Tell us what happened in the comment section below!

The lead plaintiff and proposed Class Members in the Aviva Insurance class action lawsuit are represented by Robert Ben an Stephen Birman of Thomson Rogers.

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