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A group of businesses have lodged a class action lawsuit against dozens of Canada insurance companies alleging their business interruption claims during the coronavirus pandemic have been wrongly denied.
According to the complaint, the plaintiff businesses did their part to help stymie the spread of COVID-19 by shutting down and restricting their operations in March and April of 2020, resulting in “significant losses.” However, major insurance companies allegedly refused to honor their policies by blanketly denying claims for business interruption losses.
“The Defendants collected millions in premiums from Class Members over periods of years or decades, only to deny them coverage when they needed it most,” contends the proposed denied business interruption insurance claims class action lawsuit.
Business Interruption Insurance Premiums Paid
The plaintiffs allege that they and other Canadian business owners purchased business interruption policies to help cover losses due to circumstances out of their control. In fact, they say that they and others purchased “all risks” policies to extend coverage to situations such as the coronavirus pandemic.
“None of the Plaintiffs’ all risk policies contain specific exclusions for ‘pandemics’ or ‘epidemics’,” points out the complaint.
Canada Coronavirus Outbreak Hits Businesses Hard
According to the proposed denied insurance claims class action lawsuit, the first case of coronavirus occurred in mid-January 2020 in Ontario. A few short months later, the virus was spreading across the nation and authorities enacted restrictions on business activities to help “flatten the curve.”
The plaintiffs point out that, at the time, the virulence of the disease was unknown. Authorities and experts were concerned that coronavirus could circulate rapidly where people gather, including where business is done in-person. In addition, the lack of testing equipment and protective supplies made it imperative for businesses to shut down.
The plaintiffs say that they and other businesses did so, but not without suffering major financial losses.
“Businesses that were effectively forced to interrupt their operations in such circumstances experienced damage to, or loss of, their tangible property, including impairment of function or loss of use,” alleges the complaint. “With business premises inaccessible and business property thereon unusable, the owners of such businesses suffered significant losses.”
Canada Insurance Companies Conspire to Deny Claims
The proposed denied insurance claims class action lawsuit alleges that, despite paying millions in premiums for insurance to cover such a situation, numerous Canada insurance companies conspired to deny businesses’ claims for losses suffered during the coronavirus shutdowns.
“The Defendants have adopted, and continue to assert, a common interpretation of Business Interruption Insurance policies that entirely favours their own interests, to the prejudice of Class Members,” states the complaint.
The plaintiffs assert that the insurance industry has, in fact, made their policy of denying business interruption insurance claims publically known in order to deter additional claims. The complaint notes that the CEO of Ontario’s Business Insurance Brokers Association stated in March that businesses should not “flood insurance companies with claims” because of “significant discussion in the marketplace regarding the issue of business interruption insurance.”
The plaintiffs claim that Canada insurance companies have since denied business interruption insurance coverage based on the same reasoning, including allegedly false exclusions for ” hazardous substances”, “delay”, and/or chemical “contamination” as well as for claims that do not include “damage” or ” loss” to property.
Business Interruption Denied Insurance Claims Class Action Lawsuits Piling Up
This most recent denied insurance claims proposed class action lawsuit, filed in Ontario Superior Court, is far from the first. A Montreal wholesale construction materials company lodged a complaint in the spring alleging its claim was wrongly denied.
Aviva Insurance Company, one of the defendants in the Ontario lawsuit, is also a defendant in a class action lawsuit brought by a number of hotel chains alleging it wrongly denied COVID-19 business interruption claims.
Additionally, another defendant, Intact Insurance Company is facing legal action on multiple fronts for its alleged denial of business interruption insurance claims.
The proposed class action lawsuit seeks to represent businesses that were denied interruption insurance claims for losses due to COVID-19 restrictions. The plaintiffs accuse the defendant insurance companies of breach of contract, negligence, conspiracy, unjust enrichment, and for violations of Canadian law.
If you’re a British Columbia business owner who was denied business interruption insurance coverage, legal help is available for you! Submit your information below for a free case evaluation by a lawyer.
The lead plaintiffs and proposed Class Members are represented by Kirk Baert, James Sayce, and Nathalie Gondek of Koskie Minsky LLP, and Evatt Merchant and Christopher Simoes of Merchant Law Group LLP.
The Canada Business Interruption Denied Claims Class Action Lawsuit is Workman Optometry Professional Corporation, et al. v. Aviva Insurance Company of Canada, et al., Case No. CV-20-00643488-00CP, in the Ontario Superior Court of Justice, Canada.
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