Canadian hotel chains file proposed class action against insurer after pandemic-related claims denied
Hotel chains including Best Western and Hampton Inn are part of a proposed class action lawsuit launched Monday against Aviva Insurance Company of Canada after claims for loss of business income resulting from the coronavirus pandemic were denied.
Lerners LLP, a London, Ont.-based law firm that specializes in class actions, filed the proposed lawsuit, which must be certified by a court in order to proceed.
“The action alleges that Aviva is in breach of contract when it denied the hotels’ loss of business income coverage after the federal and provincial governments declared states of emergency, restricting their business, due to the outbreak of COVID-19,” the law firm said in a statement.
Lerners said the class action claims, if certified, would apply to all hotels that were insured under a commercial insurance policy issued by Aviva under its hotel program.
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Since the pandemic was declared in March, disputes between businesses and their insurers have landed in court in Canada, the United States and Europe. Many firms have been denied coverage under their “business interruption” insurance policies because such policies often include language that assumes business is interrupted due to physical damage to premises.
In an interview with the Financial Post this month, John Neal, chief executive of Lloyd’s of London, said there was little uptake historically for coverage specific to pandemics.
He noted that after an Ebola outbreak in West Africa in 2014 threatened to spread widely, German reinsurer Swiss Reinsurance Company Ltd. offered a pandemic product that got no uptake whatsoever.
“Nobody bought the coverage — not a single customer,” Neil told the Post.
Financial Post
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