Great Clips Business Interruption Class Action Lawsuit Filed in B.C.

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!

Great Clips has filed a class action lawsuit accusing insurance companies of refusing to provide business interruption coverage during the coronavirus pandemic. The multi-outlet hair salon is the representative plaintiff in the Canada class action lawsuit that alleges 100,000 businesses across Canada have been impacted by insurance companies denying them business interruption compensation during the coronavirus lockdowns. 

The Great Clips business interruption class action lawsuit has been filed in the British Columbia Supreme Court against several Canadian insurance companies. The business interruption class action lawsuit has been initiated on behalf of over 100,000 businesses in Canada. During the coronavirus pandemic, businesses have been forced to close their doors, and under insurance policies, the businesses believe they are entitled to business interruption coverage, but they have been reportedly denied by insurance companies. 

According to the Great Clips class action lawsuit, the hair salon entered an insurance policy contract with the Intact Insurance Company that included business interruption coverage. Great Clips claims that after British Columbia’s state of emergency due to the coronavirus was announced in March, the Great Clips locations were forced to close. The health restrictions placed on businesses gave Great Clips no choice but to close and lose business income for the mandatory period. The hair salon lost business over the weeks it was closed and contacted Intact Insurance Company to file a business interruption claim. 

According to the Great Clips business interruption class action lawsuit, in May its claim was denied by the insurance company on the grounds that the losses and damages to the insured hair salons were not proven.

The business interruption class action lawsuit Canada is fighting for thousands of Class Members who have suffered tremendous losses due to business interruption caused by the coronavirus pandemic.

The Great Clips business interruption class action lawsuit says that when the Class Members made business interruption claims, they were shocked and disappointed with all of the denials by their insurance companies.

The insurance policies bought by the Class Members have not covered them when it has been entirely necessary. The insurance companies have amassed millions of dollars over the years of coverage, but relevant business interruptions were not acknowledged by the insurance companies, alleges the Great Clips class action lawsuit.

The Great Clips class action lawsuit continues to state that usual business interruption policies protect against all hazards or liabilities unless the circumstances are expressly left out. Usually, the policy exclusions do not forbid coverage for pandemics.

The lawyers of the Canada class action lawsuit have stated that none of the policies held by Class Members expressly exclude the “risk of contamination by pandemics.” None of the policies exclude the events of the COVID-19 pandemic either.

Steven Roxborough of Merchant Law Group has reportedly commented on the business interruption class action lawsuit saying, “Even at this early stage in the class action process, our firm has been contacted by more than 500 business owners who are shocked that despite the temporarily closure of their businesses and clinics due to COVID-19, they are being denied any form of business interruption coverage.  Aviva, Intact, The Co-operators, Wawanesa, Economical Insurance, Royal & Sun Alliance and many other insurance companies which are subject to this new class action, all seem to be taking the same blanket denial approach when it comes to business interruption insurance claims.” 

The pandemic has caused many unforeseen challenges for businesses and consumers, and these challenges have created a mountain of legal issues in Canada and around the world. Another class action lawsuit Canada was filed against 20 insurance companies who refused to acknowledge business interruption during the pandemic. Great Clips’ insurance company Intact Insurance, has been the target of several class action lawsuits. The insurance company has been accused of not granting business coverage during the pandemic similarly to the grievance filed by Great Clips.

As for the Great Clips class action lawsuit, the vice president of the Insurance Bureau of Canada, Aaron Sutherland, said that insurance coverage for pandemics is excluded in most insurance policies unless the business has been subject to physical damage. During the coronavirus pandemic, unless the businesses have been physically damaged, they are not covered, according to Sutherland.

Negligence and breaches of good faith are mentioned in the Great Clips business interruption class action lawsuit. The Class Members are reportedly seeking a declaration that the insurance companies breached policy contracts. Damages in the amount of $100 million are being sought, but the total damages might run into billions, according to one of the business interruption class action lawsuit lawyers. 

Do you think business interruption due to the coronavirus pandemic should be covered by insurance companies? Tell us your thoughts in the comment section below! 

The lead plaintiff is being represented by Tony Merchant of Merchant Law Group.

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