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business owner looking at declining profits regarding the business interruption claim denial class action lawsuit

Economical Mutual Insurance Company has been served a class action lawsuit Canada after allegedly denying coverage to policyholders for business interruption insurance during the COVID-19 pandemic. Canadian company Matrix Production Services Ltd. filed the class action lawsuit citing breach of contract. The Class Members are seeking unspecified general and punitive damages over their business interruption coverage denials.

Automatic “All-risk” Insurance Coverage Denial

Lead plaintiff Matrix Production Services claims it notified Economical Mutual Insurance Company about its business closure due to COVID-19 around March 26, 2020, in an effort to file an insurance claim. On March 27, 2020, the business was notified via email that the insurance claim was denied. According to the Economical Mutual Insurance class action lawsuit, there was no proof of claim form, and the insurance company “issued blanket and reflexive denials” to the Class Members seeking claims for business losses due to the coronavirus pandemic.  

The Economical Mutual Insurance class action lawsuit Canada claims the plaintiff holds an “all-risk” insurance policy and therefore should be covered in the event of loss of income. According to the business interruption insurance class action lawsuit, the policy covers direct physical losses or property damage and is supposed to pay out when a civil authority prohibits anyone from the business’ premises. 

An “all-risk” insurance policy reportedly covers businesses in foreseen events. According to the business interruption class action lawsuit, the global coronavirus pandemic was an unforeseen event, and yet Matrix Production and other proposed Class Members were denied insurance coverage by Economical Mutual Insurance Company. 

As stated in the COVID-19 business interruption class action lawsuit, the insurance policy declares, “We will pay for ‘Loss of Business Income’ for the period of time during which access to the ‘Premises’ is prohibited by order of civil authority…coverage under this extension begins the day following the issuance of the order prohibiting access and is limited to a period of two weeks.”

The Unforeseen Event: COVID-19’s Impact

On March 12, 2020,  the Provincial Health Officer and Minister of Health ordered indoor and outdoor events with more than 50 people to be cancelled. Then, on March 16, 2020, all gatherings of more than 50 people were banned.Business owner with closed sign regarding the Economic Mutual Insurance Company class action lawsuit filed

The Provincial Health Officer announced the COVID-19 outbreak on March 17, 2020, and defined it as an Emergency Order.

Matrix Production Services Ltd. was affected by the Emergency Order placed on businesses and was forced to shut down. When lockdown began, the business felt safe because they were policyholders of “all risks” insurance coverage. They did not foresee being denied for business interruption that was out of their control.

Damages for “Unlawful Conduct” Amid COVID-19

The business interruption class action lawsuit Canada is suing for breach of contract over denied business interruption coverage amid COVID-19. “Through this suit, the Plaintiff and class members seek to hold the Defendant accountable for its unlawful conduct and to recover damages.” The Economical Mutual Insurance Company class action lawsuit is seeking an unspecified amount of damages, both general and punitive.

This is certainly not the first class action lawsuit to demand damages for denials of business interruption coverage during the pandemic. Dozens of insurance companies across Canada have been sued after allegedly denying policyholders coverage for their business losses, in what seems to be a theme amid COVID-19 restrictions and lockdowns.

Proposed Class Members are defined as anyone in British Columbia who held an insurance policy with Economical Mutual Insurance Company and was denied a claim for business interruption.

Are you a B.C. business owner who had to either close or reduce services amid the coronavirus pandemic? Did your insurance company deny your claim for business losses? If so, you may be able to join a lawsuit to recover your losses. 

Matrix Production Services Ltd. and Class Members are represented by Douglas Lennox and Darren S. Sall of Klein Lawyers LLP.

The Economical Mutual Insurance Class Action Lawsuit is Matrix Production Services Ltd. v. Economical Mutual Insurance Company, Case No. VLC-S-S-208574, in the Supreme Court of British Columbia, Canada.

Join a Free Pandemic Business Interruption Insurance Potential Lawsuit

If you are a B.C. business owner who was denied business interruption insurance coverage after closing due to COVID-19, you may be eligible to join this COVID-19 business interruption insurance class action lawsuit investigation.

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