Intact Insurance Company, Novex Insurance Company and Royal & Sun Alliance Insurance Company of Canada, the largest provider of property and casualty insurance in Canada, have defeated an appeal from a common issues trial determination relating to business interruption insurance arising out of the COVID-19 pandemic and related government closures. The Ontario Court of Appeal concluded that the trial judge’s reasoning was “thorough and impeccable”.
In the underlying class action, the class was made up of all businesses in Canada (except those in Québec) that purchased business interruption insurance policies from various Canadian insurers and made claims for losses under those policies arising from the pandemic that were denied.
Three certified questions proceeded to trial with respect to: (i) whether the presence of the SARS CoV-2 virus or its variants caused physical loss or damage to property within the meaning of the relevant insurance agreements; (ii) whether government orders issued to address the pandemic caused physical loss or damage to property within the meaning of the relevant insurance agreements; and (iii) if the answer to either of the first two questions was yes, whether any exclusions in the policies precluded coverage.
After a 15-day trial on the Commercial List, Justice Michael A. Penny found that the presence of the SARS CoV-2 virus or its variants, as well as an order of a civil authority that was made due to the SARS CoV-2 virus or its variants, cannot cause physical loss or damage to property within the meaning of the relevant insurance agreements. Given the finding on these issues, Justice Penny found that it was not necessary to answer whether any exclusions in the policies would exclude coverage.
Fasken advised Intact Insurance et al. with a team led by Sarah Armstrong and David Rosenbaum, and including Jesse Harper, Daanish Samadmoten, Rachel Laurion, Kimberly Potter, Andrew Borrell and Carolyn Flanagan.
A Fasken team led by Sébastien Richemont and Vincent Cérat Lagana, and including Jean-François Trudelle and Xin Jia Wang had previously been successful in obtaining the dismissal or withdrawal of several Québec business interruption class actions by the Québec Superior Court and the Court of Appeal.
Jurisdictions
- Ontario
- Québec
