Aviva insurance faces class action lawsuit from hotels denied COVID coverage

By Ross Marowits


TORONTO _ Canadian hotels are the latest group to launch a class-action lawsuit resulting from COVID-19 after they were denied insurance coverage for business income lost because of the pandemic.

In a statement of claim, Lerners LLP alleged that Aviva Insurance Company of Canada was 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 novel coronavirus.

It is seeking $150,000,000 including loss of business income and the accountants’ fees. Each hotel has up to $500,000 of coverage.

“We are still quantifying the specific loss for the representative plaintiff and putative class members, but the losses are expected to be significant,” said a Lerners spokeswoman.

The claim said hotels paid premiums for loss of business income insurance with the expectation that Aviva would act in good faith.

However, the insurance company notified hotel customers that the coverage applies only to outbreaks that occurred  “at or within the applicable area of the insured premises”.

“We know these are challenging times for everyone. And like many, the hospitality industry has been severely impacted by the COVID-19 pandemic,” Aviva said in a statement.

“Unfortunately in this instance there is no coverage for provincial wide shutdown orders as a result of a worldwide pandemic. As this matter is in litigation, it wouldn’t be appropriate for us to comment further.”

The lawsuit was filed on behalf of Roshan Holdings Inc., which owns and operates two hotels, a Home 2 by Hilton located in Milton, Ont., and a Hampton Inn located in Peterborough, Ont.

The Ontario government declared a provincial state of emergency on March 17 to help contain the spread of the pandemic. Other provinces ordered the mandatory closure of all places of non-essential business.

“Although the hotels were not completely closed, their operations were significantly restricted,” said the claim.  “The hotels could not offer food and beverage service, and all of the amenities including the pool and gym were mandated to close under the Closure Orders due to COVID-19.”

No one rented rooms as Canadians were told to stay home and international borders were closed to tourists.

The class action, which could involve hundreds of hotels, needs to be approved by a judge.

Multiple class-action lawsuits have been filed in Canada against insurance companies, airlines, a meat-packaging company, retirement homes, Correctional Service Canada and others resulting from COVID-19.


Manulife helping those on the frontlines

Manulife has set up the St. Mary’s COVID-19 fund to help those on the frontlines, who are battling the virus.

Every dollar donated will be matched by Manulife, up to $200,000.

St. Mary’s General Hospital in Kitchener is the referral centre for specialized respiratory and thoracic disease in Waterloo Region.

The funds will be used to purchase critical equipment and supplies needed to fight the coronavirus.

You can also share a personal message for the frontline workers, which will be displayed in the hospital’s lobby.


Ontario allows auto insurance companies to provide rebates due to pandemic

By Allison Jones


TORONTO _ Ontario has made a regulatory change that will more easily allow auto insurance companies to provide breaks to their customers because of the COVID-19 pandemic.

The change will allow insurance companies to provide auto insurance premium rebates to consumers for up to 12 months after the emergency has ended.

Finance Minister Rod Phillips said he will be watching to see companies’ responses.

“Given the financial crisis that’s facing many Ontario families, I think with this barrier removed we should expect insurance companies to be responding in a matter of days,” Phillips said.

The regular prohibition on such rebates is in place to ensure consumers aren’t misled in purchasing insurance based on them, the government said.

Phillips said Ontario isn’t dictating a certain percentage of rebate for companies to provide, but he said it needs to be  “commensurate with the scale of duress that Ontario families are under.”

He said some companies have already done this, and the province wants to make it as easy as possible for drivers to receive discounts because so few people are driving right now.

Allstate Insurance Co. of Canada is giving all of its drivers a “stay at home payment” of about 25 per cent of their monthly auto premium.

CAA Insurance has said a 10 per cent reduction for a year for both new and existing customers, once they renew, will be automatically applied.

Intact Financial Corp. and Aviva Canada are offering discounts of 15 per cent for customers who are driving less and reductions of 75 per cent for customers who park and store their vehicles.

Most companies are also offering to defer payments for customers in financial difficulty and waive non-sufficient fund fees.

The NDP has called on the Ontario government to mandate a three-month, 50 per cent discount on auto insurance.

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