The COVID-19 pandemic is affecting the lives of millions of Canadians. You may have questions about your insurance and how it will protect you. The resources below offer legal insights into insurance claims during a COVID-19 world.
The COVID-19 outbreak was unexpected. BC business owners are left scrambling for a way forward despite making dramatic operational changes and shutdowns. Businesses protect themselves from unexpected events by purchasing Business Interruption Insurance. But what if your claim is denied?
Due to the safety concerns from COVID-19, many businesses have closed because they have been ordered to. Whether by city bylaw, or provincial mandate, establishments have been shut down. If forced to close, can businesses recover any lost revenue, or be reimbursed for any normal operating expenses?
If a supply chain vendor ceases its own operations and this results in financial loss to their buyers/customers, can those Buyers be compensated for their losses? For example, will compensation be available if the break in supply causes a Buyer to halt its own production lines, or if their business is no longer able to open as it cannot provide a particular service without deliveries from the Vendor?
If a business has insurance coverage for business interruption in place, the question of whether or not its losses will be covered in the event of such an interruption, will depend on the policy itself. The period of coverage may not necessarily start from when the business closed operations.
Does a pandemic amount to “physical damage” under an all-risks Insurance policy? Prior to the COVID-19 outbreak, establishments with business interruption insurance may have purchased an “all-risks policy”. For businesses who have suffered losses from COVID-19 and are looking to their insurance policy for coverage, we anticipate that one of the most challenging issues is whether a pandemic or disease amounts to physical damage.