Two law firms have filed a class action lawsuit against Canada’s largest insurance companies, alleging that the insurers are in breach of their contractual obligations to over 100,000 Canadian business owners by refusing business interruption insurance claims related to the COVID-19 pandemic.
In the complaint filed by the law firms Koskie Minsky and Merchant Law Group, the insurers are also accused of negligence and breaches of the duty of good faith.
“Business interruption insurance is designed for circumstances such as the current pandemic,” said Koskie Minsky partner Kirk Baert in a statement. “Many business owners who have contacted our firm have paid significant insurance premiums going back a decade or more, to have business interruption insurance coverage in place, and now find that their insurance claims are denied without even a cursory investigation of their business losses during the COVID-19 shutdown.”
Baert accuses the Canadian insurance industry of “abandoning small business owners when coverage is needed most.”
“Even at this early stage in the class action process, our firm has been contacted by more than 500 business owners who are shocked that despite the temporary closure of their businesses and clinics due to COVID-19, they are being denied any form of business interruption coverage,” added Merchant Law Group partner Steven Roxborough.
Roxborough identified several insurers named as defendants in the lawsuit, including Aviva, Intact, The Co-operators, Wawanesa, Economical Insurance, Royal & Sun Alliance, “and many other insurance companies.” He also said that these insurers “all seem to be taking the same blanket denial approach when it comes to business interruption insurance claims.”