Aviva Insurance Accused of Breaching Contract in Another Class Action Lawsuit

Aviva Insurance Company of Canada has been hit with yet another class action lawsuit accusing it of unlawfully denying insurance coverage for business income losses and other related costs during the COVID-19 pandemic.

Plaintiff Fritzworks Printing Services Inc., a British Columbia corporation, purchased an Aviva insurance policy with a period of coverage extending from Feb. 9, 2020 through Feb. 9, 2021, the Aviva Insurance Company Canada class action lawsuit alleges.

The Aviva insurance policy reportedly includes business interruption insurance with extensions for negative publicity and restricted access. Fritzworks paid all premiums owed under the policy as required, according to the Aviva business interruption coverage denial class action lawsuit.

COVID-19 Regulations Force Business Closures

COVID-19 first became an issue in China in December 2019. By January 2020, the novel coronavirus spread to other countries, including Canada. The first COVID-19 case in British Columbia was reported on Jan. 28.

In March 2020, provincial governments throughout Canada began issuing orders that required many businesses to close temporarily or restrict their operations. Fritzworks closed its business following an emergency order issued on March 17, and has subsequently suffered an ongoing loss of business income.

In March 2020, Fritzworks closed due to the COVID-19 pandemic and notified Aviva by phone that it wished to make a claim for loss of business income under its insurance policy. During the phone call, the Aviva representative denied the claim.

On Aug. 24, Fritzworks wrote to Aviva to assert the business interruption claim and asked the insurer to confirm any denial in writing. The next day, Aviva wrote Fritzworks to confirm the business interruption coverage denial.

Class Action: Aviva Issues Blanked Business Interruption Coverage Denials

Fritzworks asserts that Aviva has “issued blanket and reflexive denials” to Class Members asserting a claim damages related to the COVID-19 pandemic. These blanket denials violate the Insurance Act, according to the Aviva insurance coverage denial class action lawsuit.

Fritzworks seeks recovery of all of the losses it has suffered due to closing its business due to the orders of government and public health officials. The company alleges that Aviva has breached its contract to policyholders by failing to provide coverage for the business interruption losses related to the COVID-19 pandemic.

“The Plaintiff reasonably bargained for protection for losses due to infectious diseases and it is entitled to coverage for those losses under the policy,” the Aviva coverage denial class action lawsuit says.

“The confirmed presence of COVID-19 within 25 km of the Plaintiff’s business is an insured peril,” Fitzworks states in the Aviva coverage class action lawsuit. “The government declared a province-wide outbreak with the Emergency Order on March 17, 2020. The Plaintiff’s business was interfered with and closed as a result of the Emergency Order and occurrences of COVID-19 within 25 km of its business.”

Fritzworks argues that Aviva breached its duty of good faith, which included the obligation to assist policyholders with reasonable claims and to properly investigate those claims.

Fritzworks filed the Aviva insurance coverage class action lawsuit on behalf of itself and a proposed Class of anyone in British Columbia who had Aviva insurance policies since March 17 that included business interruption insurance with extensions for negative publicity coverage and/or restricted access.

The class action lawsuit Canada seeks general damages, punitive damages, pre- and post-judgment interest, costs and other relief the court deems just.

Aviva Business Interruption Coverage Class Action Lawsuits

Aviva has already come under fire for denying coronavirus insurance claims. The Royal Canadian Legion filed a business interruption class action lawsuit accusing Aviva of wrongly denying “loss of business use” claims made by legions during the early days of the COVID-19 pandemic.

Aviva is also facing a nationwide class action lawsuit on behalf of businesses who attempted to make Aviva insurance claims under the “contagious disease coverage” included in their Aviva insurance policies.

A group of hotel chains have also joined together in a class action accusing Aviva of breaching its contract with policyholders by denying their loss of business income coverage during the COVID-19 pandemic orders.

Aviva is not the only insurance company in Canada to be accused of wrongfully denying business interruption claims stemming from the COVID-19 regulations. The pandemic has disrupted businesses in a wide range of industries. Many of these businesses are counting on payment from their insurers to cover the losses they have experienced due to the orders requiring businesses to close temporarily or restrict their operations.

Fritzworks Printing Services is represented by Douglas Lennox and Darren Sall of Klein Lawyers LLP.

The Aviva Business Interruption Insurance Coverage Class Action Lawsuit is Fritzworks Printing Services Inc. v. Aviva Insurance Company of Canada, Case No. VLC-S-S-209189, in the Supreme Court of British Columbia, Canada.

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