These are uncertain and challenging times. With COVID-19 causing global concern, we understand many Canadians will have questions related to commercial insurance. IBC has produced a brief Q&A document outlining how coverage is triggered and how business interruption policies work.
Updated: April 8, 2020
Commercial insurance is complex and specialized, which makes it important that you speak to your insurance representative if you have any questions or need clarification about your coverage.
Will my standard business policy or business interruption policy cover me for interruptions due to COVID-19?
- Generally, commercial insurance policies and traditional business interruption policies do not offer coverage for business interruption or supply chain disruption due to a pandemic such as COVID-19.
- Some organizations may have purchased specialized contingent business interruption coverage, stand-alone business interruption coverage and supply chain disruption coverage which may be triggered as a result of the World Health Organization’s declaration of a pandemic.
- Commercial insurance is complex and specialized and specific to your business which makes it important that you speak to your insurance representative if you have any questions or need clarification about your coverage.
How does business insurance work?
Property insurance for businesses is designed to protect the physical assets of a business against loss and/or damage from a broad range of causes. There are two basic policy types:
- Named perils – covers only loss and/or damage caused by perils specifically listed in the policy, subject to exclusions. Loss and/or damage caused by any other peril is not covered.
- Comprehensive – covers loss and/or damage caused by any peril, unless specifically excluded.
What is business interruption (BI) coverage?
BI coverage is an add-on to an existing business insurance policy. In the event of a business temporarily needing to shut down, BI covers continuing expenses or replaces lost profits. There are three types of BI policies:
- Gross earnings policy, which pays only until property or damage is replaced or repaired, or stock is replaced
- Profits form policy, which continues to pay until a business resumes its normal, pre-interruption level (subject to policy limits)
- Extra expense policy, which is designed for businesses that can remain operational during periods affected by loss and/or damage.
How does BI insurance work?
BI policies are not standardized and include many variants, but most contain language indicating that the insurer will pay for the actual loss of “business income” due to the “necessary suspension” of operations during “the period of restoration.” A number of concepts and nuances come into play, including:
- Physical damage requirement: Most policies require proof that the insured premises sustained physical damage (for example, from fire, heat, flooding or firefighting efforts) that was covered under their property policy, which caused an interruption that resulted in a loss of business income. A business that is interrupted due to the loss of data or a loss of utilities may not have sustained a physical loss. (There is separate utility loss coverage.)
- Period of restoration: If BI coverage is triggered, a significant issue is defining the period of indemnity or, as some policies refer to it, the period of restoration. Most policies will pay business income loss through to the point that the business is restored or when the coverage expires (usually 12 months from the beginning of the interruption).
Consumer Relief Measures
To help Canadians cope with the financial impact of COVID-19, Insurance Bureau of Canada (IBC) member companies are offering substantial consumer relief measures. For consumers whose driving habits have changed significantly, IBC member companies are offering reductions in auto insurance premiums to reflect this reduced risk. IBC expects this could result in $600 million in savings to consumers. The reductions will continue for the next 90 days. Additionally, insurers have supported Canadians and businesses who are most adversely affected by honouring requests to defer premiums. Thousands of Canadians have had their premiums deferred.
Insurance customers whose driving habits have changed significantly or who are facing financial hardship as a result of the pandemic should contact their insurance representative. As it relates to savings on auto insurance premiums, savings will vary depending on individual driving habits.
Many insurers have transitioned their employees to work from home, and insurers ask for your patience as service levels may be strained.
In addition to adjusting premiums for drivers, IBC member companies have also committed to the following measures to help Canadians, which will also apply for the next 90 days:
- Explore flexible payment options for consumers who are in a vulnerable position or facing financial hardship as a result of COVID-19;
- Waive the NSF fees they would have charged if you have insufficient funds to cover your premium. You remain responsible for any fees your bank may charge you; and
- If you are temporarily using your car or home differently (for example, you may be using your car to commute to work instead of taking public transit, or you may be working from home) it will not affect your premium or your ability to make a claim.
Insurers are also working with small business and commercial clients to help businesses manage their costs.
Insurers are supporting communities across the country, and some have made substantial donations to help those impacted.
TORONTO _ Canadian mining firm Alamos Gold Inc. reports that a group of armed robbers intercepted gold dore bars on the runway at its Mulatos mine site in Mexico, then staged a dramatic escape in a separate light aircraft.
In a statement in Spanish, Alamos’s Mexican subsidiary Minas de Oro Nacional says five heavily armed people subdued security guards who were loading the bars for transport on a plane on Wednesday morning.
At the same time, it says, a light plane, described as a “Cessna-206 type,” landed, and within 10 minutes the aircraft, the armed group and the bars were airborne and headed towards the mountains.
Alamos spokeswoman Rebecca Thompson says no one was hurt in the dramatic robbery, adding another mine, owned by Mineria Penmont, a subsidiary of Fresnillo, was robbed a few weeks ago.
She says the Mulatos loss is covered by insurance.
In a report, National Bank analyst Mike Parkin says 2,600 ounces of dore bars, an alloy of gold and silver, were taken, but Thompson could not confirm that figure.
By Stephanie Taylor and Bill Graveland
THE CANADIAN PRESS
It’s been almost two years since the deadly Humboldt Broncos bus crash in Saskatchewan and with the solemn anniversary comes a closing legal window that has seen several lawsuits filed in court.
Sixteen people died and 13 others were injured after a transport truck barrelled through a stop sign and into the path of the bus carrying the junior hockey team on April 6, 2018.
The inexperienced driver of the truck, Jaskirat Singh Sidhu of Calgary, was sentenced to eight years in prison.
A proposed class-action lawsuit was filed Friday in Regina Court of Queen’s Bench against Sidhu and his former employer. It also lists the governments of Saskatchewan and Alberta, as well as the federal government.
“The people wanting to go forward aren’t motivated financially so much as these were wrongs by governments,” said lawyer Tony Merchant. He pointed to the trucking industry as a major concern.
Carol and Lyle Brons are listed as the plaintiffs. Their 24-year-old daughter, Dayna, was the team’s athletic therapist and was killed in the crash.
Also listed are all the others who were on the bus, their families, all hockey team staff, billet families and first responders who treated the victims.
At least one family has said it has asked to be removed from the class action, which still needs to be certified by the courts.
Several other lawsuits have also been filed.
Russ and Raelene Herold of Montmartre, Sask., were among the first of the families to file a few months after the collision. They are suing the truck driver, the Calgary-based company that employed him and the bus manufacturer. The lawsuit asks for damages and a court order that all buses carrying sports teams in Saskatchewan be equipped with seatbelts.
The couple’s son, 16-year-old Adam, was the youngest player on the team to be killed.
Their suit has since been joined by the families of three players and an assistant coach who died: Jaxon Joseph, 20, of St. Albert, Alta.; Logan Hunter, 18, also of St. Albert; Jacob Leicht, 19, of Humboldt; and Mark Cross, 27, from Strasbourg, Sask.
No statement of defence has been filed in that lawsuit.
Injured Broncos player Derek Patter, 21, of Edmonton, filed in March against the truck driver and the trucking company. The Alberta government joined as a plaintiff to recoup health-care costs.
Kevin Matechuk of Colonsay, Sask., said his family would also be filing a lawsuit against the trucker and trucking company on behalf of his son Layne, 20, who is still recovering from a traumatic brain injury.
“He will need special care. We don’t know if he will ever be able to live on his own. We’re hoping so. It’s still our hope and dream.”
It’s the same situation for Ryan Straschnitzki, 20, of Airdrie, Alta., who was paralyzed from the chest down. His suit also takes on the Alberta and Saskatchewan governments, as well as the team’s bus driver.
“There’s always new expenses and he’s going to have to be taken care of for the rest of his life,” said his mother, Michelle Straschnitzki.
“We won’t always be here. And people don’t understand … long-term care for people who are in wheelchairs _ the cost is astronomical.”
The Straschnitzkis said they’ve received hateful comments and death threats since their lawsuit was reported in the news last week.
“Ryan never got millions from the GoFundMe like a bunch of these dummies are saying,” said his father Tom Straschnitzki.
A GoFundMe campaign, which raised more than $15 million, paid out $525,000 to each of the families who lost a loved one and $475,000 to each injured player.
Some families have said they plan to give away through charities some of the money they received from donations.
“It’s not our plan to sue,” said Toby Boulet, whose 21-year-old son, Logan, was killed.
The Lethbridge family has used money received to set up a fund for causes that were important to their son, including organ donation.
The Adam Herold Legacy Foundation is a charity that gives Saskatchewan youth a chance to develop their hockey skills and leadership potential.
Others, including Evan Thomas’s family of Saskatoon, have given back through memorial scholarships and other donations.
Evan’s father, Scott Thomas, said the family decided against legal action.
“We just don’t feel its part of something we want to be a part of,” he said.
Thomas said it might have been different if his son had lived. “I know a lot of people think insurance is going to take care of them, but it’s not.”
At least one injured player doesn’t want anything to do with a lawsuit.
Myles Shumlanski of Tisdale, Sask., said his 22-year-old son Nick just “wants to move on.” He was the only one on the bus able who walked away without serious injuries.
“We’re going to put in for a little bit of insurance,” said his father.
“He doesn’t even feel comfortable doing that.”
The excerpted article was written by · CBC News ·
The coronavirus crisis is complicating condo life, just as a second wave of soaring insurance premium hikes is about to kick in.
For condominium residents, the COVID-19 crisis has led to elevator restrictions, party bans and quiet hallways as people try to keep two metres apart.
For condo property managers — it’s a frantic time.
“Some stratas are more prone to drama that others,” said property manager Allen Regan who is busy keeping up with changing disinfecting and physical distancing rules, while juggling the personalities and logistics involved in upcoming annual general meetings.
The cost of catastrophes, claims and expensive repairs have sent insurance costs soaring — in some cases doubling them — and many were hit with new costs at the end of 2019.
The other half were bracing for cost increases starting April 30.
Then came COVID-19.
“It is sort of a perfect tsunami of problems all coming at once,” said Regan, managing broker with Bayside Properties and Services Ltd., which helps manage strata corporations in the Lower Mainland.
Now the coronavirus crisis is forcing some of B.C.’s condominium stratas onto shaky legal ground as they try to balance achieving a quorum of 10 council members to pass budgets with physical distancing rules.
Building managers are also trying to balance the privacy rights of potentially-infected residents in isolation with the safety concerns of other condo dwellers as the virus spreads worldwide.
Some of them are vulnerable because of their age or underlying health issues. People are being urged to inform management if they are self-isolating, so it can take safety and cleaning precautions.
“You need to look out for them and accommodate them at the same time,” said Tony Gioventu, president of the Condominium Home Owners Association of B.C.
Condo community enforces social distancing
Gioventu says the condo community is also good at catching rule breakers, like the group that returned from Arizona to Vancouver Island last week and headed out shopping in the community but were reported to health authorities by neighbours.
Gioventu also urges condo dwellers to call police if they hear house parties — as gatherings like this are against provincial health rules and punishable with fines.
As cleaning regimes are ramped up, strata corporations also must pass budget increases to handle rising insurance costs. Regan says this must happen fast as strata corporations are non-profits, so they do not have financial cushions to draw on if owners refuse to approve budget increases or pay strata fees or special levies.
If that happens, then “it’s a huge, immediate financial problem for the strata corporation. This at a time when people are strapped financially,” said Regan.
‘Rabble rousers’ may challenge video AGMs
He is not sure if anybody will challenge the video conferenced AGMs as invalid under the Strata Property Act.
To hold an AGM, there needs to be 10 people present, and that’s a challenge with social distancing rules that require humans to stay two-metres apart. Regan said that stratas can pass a bylaw to allow an alternative form of meeting but not many stratas have that in place.
So they are moving ahead anyway, as budgets need approval and corridors need cleaning.
“We have a few rabble rousers that have threatened to go to the CRT — which is the civil resolution tribunal — if meetings aren’t held ‘properly.’ I think most councils are saying fine. Let the chips fall where they may,” said Regan.
Source: CBC News
The excerpted article was written by
The Star Vancouver
When Dr. Michael Duchnay had to close his west end Toronto dental practice due to the pandemic, it was catastrophic, but there was one stroke of good luck: He had insurance. In fact, his business policy explicitly mentioned pandemic-caused closures.
But when he shuttered his shop March 15 after an advisory from the Royal College of Dental Surgeons of Ontario strongly recommended he do so, his initial attempt to collect was rebuffed.
It took two weeks of runaround before insurance giant Aviva Canada agreed to pay him and other Ontario dentists for the pandemic coverage included in their expensive policies.
But while the dentists may have won their fight, other Ontario business owners might not be so lucky, experts say.
“I would say that given the extent of the loss here, cutting across multiple industries, really all sectors, the insurers are in a bit of a difficult situation,” says Toronto lawyer Hovsep Afarian, who specializes in insurance coverage law.
“So their reflexive response has been, let’s deny and we’ll sort things out later,” says Afarian, who works at the national firm McCarthy Tetrault LLP.
He says denials are being made to all kinds of claims — likely, he believes, because the insurance companies are hoping that Ottawa will offer up more aid in the meantime.
“I think a part of it may be motivated by the potential for the government to step in and provide alternative avenues for redress,” says Afarian who has already taken on pandemic clients.
“So if there’s another pocket involved, the insurers have essentially mitigated their loss because no doubt they’re going to say ‘look to the government first.’ ”
Aviva Canada CEO Jason Storah announced Tuesday evening that the company would be honouring its pandemic commitment to dentists, saying they had a unique arrangement for such viral coverage.
“There were a number of complex legal, regulatory and operational hurdles related to the dentists’ claims that we simply had to work through,” Storah said in a statement.
But, Storah said, the hurdles have now been overcome.
“As a result I can confirm today that Aviva Canada will of course stand by this pandemic coverage,” he said, adding there would be guidance from the company soon on making claims.
Afarian says most businesses would not have pandemic language written into their property policies. And if they don’t, he says, there is a real legal question as to whether pandemic related interruptions are covered.
“Business interruption is usually a component of a property policy (for which) you need physical damage,” Afarian says.
“So the debate in the industry is ‘do we have physical damage if there is a virus in the building?’ ”
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