A property management firm responsible for several vacation rental properties in Canmore, AB is suing Lloyd’s Underwriters for alleged wrongful denial of the property manager’s business interruption insurance claim.
Wataga Properties is the representative plaintiff of the proposed $180 million class action lawsuit against Lloyd’s. Wataga, which manages five vacation rental properties in Canmore, claims in its complaint that Lloyd’s is in breach of the insurance policy, which “was intended to provide peace of mind to property owners.”
According to the complaint, the COVID-19 pandemic led to shutdown orders which closed off both borders and travel. The orders also severely impacted Wataga’s rental business, particularly during the period between March and May. The firm later filed a claim for rental income loss with Lloyd’s. But in July, Lloyd’s advised Wataga that the claim “must arise out of an order of civil authority which prohibits access to the insured property due to direct physical loss or damage.”
Wataga argued in its suit that its insurance with Lloyd’s was an “all risks” commercial insurance policy, and that the policy has no exclusions for pandemic-related losses. The firm’s lawyer also maintained that the COVID-19 pandemic constitutes physical damage due to the coronavirus’s ability to spread in physical ways.
“Just because you can’t see it doesn’t make it less real or less physical,” said lawyer Matthew Farrell, a lawyer with Guardian Law Group.
CBC News reported that the statement of claim was filed at the Calgary Courts Centre, and that Lloyd’s had yet to file a statement of defence in response. The Guardian Law Group also revealed that Wataga is the only company involved in the suit so far, but other businesses whose claims were similarly turned down are expected to join later.
