December 24, 2024
The mandatory shutdowns and limitations on business activities during the height of the Covid pandemic caused many businesses to suffer losses, or less profit than anticipated.
THE ISSUE
To mitigate these losses, many businesses filed claims with their commercial property insurers claiming under their business interruption coverage.
Perhaps you have commenced a lawsuit because the insurer denied coverage.
THE CASES
Be aware that the Ontario Court of Appeal, in the 2024 decision of Workman Optometry Professional Corporation v. Certas Home and Auto Insurance Company upheld a Superior Court decision that found that the policies of most of the major insurers in Ontario do not cause physical loss or damage to property within the meaning of the business interruption provisions of each defendant’s property insurance wordings, and therefore there is no coverage for business interruption losses.
This affirms the result in a 2023 case involving a distinct policy and alternative arguments. This strongly suggests that the door is closed to coverage for business interruption losses due to COVID.
The Workman decision relies on the reasons of the Superior Court decision under appeal, based in turn upon the core principles of insurance interpretation, including that:
The fact that, as submitted by the plaintiffs, SARS-CoV-2 is a “physical thing” spread to humans in a “physical way” such that there is a “physical dimension” of some kind to the event is insufficient to bring it within the language of “physical loss or damage to property.
TAKEAWAYS
- You may be able to find a lawyer who is prepared to continue your claim on some novel basis or hope for a successful appeal to the Supreme Court of Canada, but the combined weight of the cases to date suggests that a different result is highly unlikely.
- If you persist in a claim, it is likely that you will be required to pay costs to your insurer.
WHAT WEILERS LLP CAN DO TO HELP YOU
Weilers LLP has throughout our 75 years represented insurers and insureds in insurance disputes. We know how to read and interpret a policy. We take a practical and assertive approach to resolving disputes, including trials when necessary. If you have a problem with your insurer, give us a call and see if we are the right lawyers for you.
We also continue to work for insurers when requested to do so, which improves our ability to navigate the claims and dispute resolution process.