Intact is among a group of 14 insurers have jointly denied the claims against them.MIKE CASSESE/Reuters
An Ontario court has green-lit several class-action lawsuits against a group of Canadian insurers that claim Canadian businesses are owed billions of dollars after being denied business interruption insurance coverage during the COVID-19 pandemic.
Ontario Superior Court Justice Edward Belobaba certified a class-action lawsuit against 14 property and casualty insurers who offered business interruption insurance to small and large companies including owners of hotels, bars, restaurants and salons. The claim was filed in May, 2020, by Merchant Law Group LLP and Koskie Minsky LLP, which estimate damages are in the “billions of dollars” for companies that had to shut down their businesses. The class action claims that insurers were “unjustly enriched in selling business interruption insurance and did not honour the terms of such policies.”
“The certification of this important claim will allow business owners, large and small, to recover the losses they suffered due to the pandemic,” Kirk Baert, a partner at Koskie Minsky, said in an e-mail to The Globe and Mail.
The certification last week followed an earlier decision last month by Justice Belobaba, who gave the go-ahead for several class-action lawsuits against Aviva Insurance Company of Canada .
Law firm Lerners LLP filed a class-action case against Aviva on behalf of 625 Royal Canadian Legion branches and about 250 Ontario denturists, claiming there was a loss of business income following the mandatory closing order made by the Province of Ontario on March 23, 2020. The case has been fully certified.
At the same time, law firm Thomson Rogers, along with Lax O’Sullivan Lisus Gottlieb LLP and Miller Thomson LLP, has filed a class action against Aviva on behalf of Nordik Windows Inc., a window manufacturing and installation company in Ontario that had to close for several months in 2020 because of the pandemic. The case has been conditionally certified and seeks $300-million in damages on behalf of companies that have similar claims under Aviva’s enterprise insurance policies, which include protection for the loss of business income as a result of an outbreak of a contagious or infectious disease.
Aviva denied the claim last year, stating in court records that COVID-19 does not constitute an outbreak of a contagious or infectious disease.
Aviva did not respond to a request for comment on Sunday.
The group of 14 insurers have also jointly denied the claims against them, stating that coverage under the business interruption provisions of the insurance policies were “not triggered by the closure or reduction of operations of the businesses in question due to the pandemic and/or associated governmental orders.”
The group includes: Co-operators General Insurance Company ; Wynward Insurance Group; Continental Casualty Company; Certas Home & Auto Insurance Company; Economical Mutual Insurance Company; Federated Insurance Company of Canada; Northbridge General Insurance Corporation; The Wawanesa Mutual Insurance Company; Gore Mutual Insurance Company; Intact Insurance Company ; Novex Insurance Company; The Dominion Company of Canada; SGI Canada Insurance Services Ltd.; and Royal & Sun Alliance Insurance Company of Canada.
According to court documents, the group states the “vast majority” of the insurance policies require the existence of “actual physical loss or damage to property, and that the actual or suspected presence of the coronavirus on property and/or the government orders at issue do not constitute physical loss or damage.”
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Clare O’Hara