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A Regina restaurant has filed a class action lawsuit against more than a dozen Canadian insurance companies over business interruption insurance claim refusals in the wake of the coronavirus pandemic.
Business Interruption Refusal Mounts Restaurant Class Action Lawsuit
Plaintiff JKT Holdings Ltd., a restaurant known as Memories, launched a lawsuit in April 2020 after pandemic restrictions forced the business closed and its insurer did not accept a business interruption insurance claim.
Memories has been in operation and paying insurance premiums since 1989. The restaurant business interruption class action lawsuit defines business interruption as “BII permits a business or business owner to collect, from the insurer, income that the business would have expected to generate were it not for the intervention of an unexpected event.”
Memories purchased insurance from Wynward, which allegedly covered the premises, inter alia, meaning “among other things.” According to the restaurant business interruption class action lawsuit, the insurance policy included business interruption coverage, but it alleges Wynward refused the claim. All Class Members have a similar story about business interruption denial.
In the context of the restaurant business interruption class action lawsuit, business interruption is described as “a direct or indirect result of the COVID-19 pandemic.” The business interruption faced by Memories and other potential Class Members includes loss of revenue due to a decrease in customers, government restrictions, closures of the premises, and limited group gathering guidelines.
Many Class Members in the restaurant class action lawsuit Canada were also subject to higher costs during the pandemic.
Since the start of the coronavirus outbreak, heaps of business interruption class action lawsuits in Canada have been piling up over denied claims during the challenges of the pandemic. The stories are virtually the same, Canadian businesses in all industries have sought business interruption, but claims have been denied. The class action lawsuits grow as other businesses face similar situations. Insurance companies have been sued for breach of contract, negligence, and more for not following up on coverage during the pandemic’s business hurdles.
Canada’s Restaurant Industry Hit Hard by COVID-19 Pandemic
On Jan. 15, 2020, the Public Health Agency of Canada ordered the Emergency Operation Centre to assist Canada’s response to the coronavirus outbreak. The first case of COVID-19 in Canada was reported on Jan. 25, 2020.
Canada’s Chief Public Health Officer announced on March 6, 2020, that most coronavirus cases in the nation were mild, and that the country was able to handle the viral outbreak.
But, by March 11, 2020 health authorities categorized the COVID-19 outbreak a pandemic, unlike anything they had seen.
Canadian provinces and municipalities were ordered to close or were able to operate under severely limited conditions. However, the restaurant and hospitality industry has arguably been hit the hardest by COVID-19 closures and restrictions.
According to the restaurant business interruption class action lawsuit, sometime between mid-March and March 23, the Saskatchewan government systematically closed all restaurants, cafes, bars, bistros, and other hospitality venues, except for take-out or delivery services. Limiting restaurants to take-out or delivery really restricted the Class Members’ businesses, according to the class action lawsuit.
Closures Cause Business Losses
The restaurant business interruption class action lawsuit asserts that Memories and Class Members already began losing revenue even before the ordered closures in March. For example, there were already coronavirus guidelines in place including limited social gatherings, which created a disadvantage for restaurants and other social venues.
The restaurant class action lawsuit argues that business operations were nearly impossible due to the coronavirus restrictions. Memories and Class Members were either forced to close or had to drastically reduce their operations to protect their staff members, customers, and the general public.
The complaint posits damages were sustained as a result, and the representing lawyer believes the Class Members are entitled to recoup their losses with business interruption insurance.
Canadian Insurance Companies Face Breach of Contract for BII Denials
Memories and potential Class Members in the restaurant business interruption class action lawsuit are suing for aggravated, compensatory, general damages, and special damages claiming that the insurance companies’ denials were “false, misleading, and deceptive.”
The restaurant business interruption class action lawsuit is claiming the insurers were negligent in denying business interruption insurance. The alleged claims against them include breach of contract and breach of duty of faith. Memories and Class Members are seeking an undetermined amount in damages for the losses they have endured over the course of the pandemic.
Are you a business owner in Canada who was denied business interruption insurance during the pandemic? Are you going to join the restaurant business interruption class action lawsuit? Why or why not? Tell us in the comments section below!
Memories and Class Members are represented by E.F. Anthony Merchant, Q.C. of Merchant Law Group LLP.
The Memories Class Action Lawsuit is JKT Holdings Ltd. v. Aviva Canada, Inc., et al., Case No. 795/20, in the Court of Queen’s Bench for Saskatchewan, Canada.
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