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Aviva Insurance Company of Canada is facing a $20 million breach of contract class action lawsuit accusing the insurer of improperly denying business interruption coverage for losses stemming from the COVID-19 pandemic.
Plaintiff Matt McCallum works as a denturist in Ontario under the business name McCallum Denture Clinic & Implant Solutions. His business had an insurance policy through Aviva Canada which reportedly provided coverage for issues such as property damage, general liability and business income losses.
He claims that Aviva Canada wrongly denied him coverage for business interruption losses that were caused when the government ordered businesses to shut down to prevent the spread of COVID-19.
Class Action Lawsuit: Aviva Breached Contract
On March 23, the Province of Ontario reportedly ordered the mandatory closure of all non-essential business starting on March 24 to help prevent the spread of COVID-19. As a result, many businesses, including those of denturists, were declared non-essential and ordered to close or restrict their business.
According to the breach of contract class action lawsuit, McCallum’s Aviva insurance policy covered exactly this type of business interruption loss.
McCallum notes that his Aviva insurance policy “expressly provides for loss of business income coverage, including Restricted Access coverage and accountants fees.”
According to the Aviva insurance breach of contract class action lawsuit, the Restricted Access provision of McCallum’s insurance policy “insures the actual loss of ‘business income’ sustained while access to the ‘premises’ is restricted in whole or in part by: … (b) order of civil authority resulting from any of the following occurrences, subject to the waiting period of 24 hours: … (ii) an outbreak of a contagious or infectious disease that is required by law to be reported to government authorities.”
However, McCallum says Aviva denied coverage even though his business was covered for this type of loss. He says Aviva sent a letter to Class Members that wrongly stated that the Restricted Access coverage did not provide coverage for global pandemics.
The breach of contract class action lawsuit states that McCallum and other similarly situated individuals were insured for losses for a period of up to four weeks while their access to their premises was restricted due to the government’s COVID-19 shutdown.
Class Action Lawsuit Seeks $20M in Damages
McCallum filed the breach of contract class action lawsuit on behalf of himself and a proposed Class of denturists who were insured by Aviva Insurance Company under a commercial insurance policy issued by Aviva on behalf of the Denturist Association of Ontario, and whose businesses were restricted by a mandatory closure order made on March 23 by the Province of Ontario, and who were denied coverage for Business Income-Actual Loss Sustained.
The Aviva breach of contract class action lawsuit seeks a declaration that the loss of business income caused by Ontario’s mandatory closure order is covered under the Class Members’ Aviva insurance policies. McCallum is also seeking payment for himself and the proposed Class for the payment they are owed under their Aviva insurance policies for the loss of business income.
“As a result of the breach of contract by the defendant, the plaintiffs and Class members have suffered and will continue to suffer damages, including loss of business income and accountants’ fees for producing particulars or details of their losses,” the Aviva breach of contract class action lawsuit says.
McCallum alleges Aviva breached its contract with the Class Members when it denied coverage for their business income losses after Ontario’s mandatory closure order and seeks damages for breach of contract in the amount of $20 million.
Business Interruption Insurance Class Action Lawsuits
Aviva is already facing a growing number of class action lawsuits accusing it of wrongfully denying business interruption coverage to businesses who were forced to shut down due to the COVID-19 pandemic.
A group of Canadian hotel chains are pursuing an Aviva class action lawsuit after the insurer denied their loss of business income coverage after COVID-19 shutdown orders were issued by the government. They claim Aviva breached its contract to them by denying the coverage.
Aviva is not the only insurance company to take heat for refusing to pay business interruption claims following the COVID-19 shutdown orders. Intact insurance is facing a business interruption coverage class action lawsuit in Quebec.
Another class action lawsuit takes aim at dozens of Canada insurance companies over allegations their business interruption claims during the COVID-19 pandemic were wrongly denied.
The denial of business interruption insurance claims is just one of the many legal issues that have manifested during the COVID-19 pandemic. More information about the coronavirus outbreak legal issues is available here.
McCallum is represented by Kevin L. Ross, Alfonso Campos Reales, Peter W. Kryworuk and Anthony J. Bedard of Lerners LLP.
The Aviva Insurance Breach of Contract Class Action Lawsuit is Matt McCallum v. Aviva Insurance of Canada, Case No. CV-20-00000981-00CP, in the Ontario Superior Court of Justice, Canada.
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