Prince George sues insurance company over COVID-related revenue loss

The City of Prince George is suing its insurer because the company denied a claim for lost revenue related to COVID-19.

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The City of Prince George is suing its insurer for damages after the company denied the city’s request for business interruption coverage during the COVID pandemic.

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The city says that after the issuance of provincial health orders aimed at preventing the spread of the virus in March 2020, it was forced to close its civic facilities, including the CN Centre, Rolling Mix Concrete Arena, Elksentre Arena and Kin Center arenas.

The swimming pools and the Prince George Conference and Civic Center were also temporarily closed.

“Prince George has suffered a significant loss of revenue from the closure and limited operations of civic facilities,” the lawsuit filed in the Supreme Court of British Columbia said. No dollar figure for losses was provided in the lawsuit and the city declined to comment because the matter is before the courts.

The temporary closure of Treasure Cove Casino, the operation of which provides Prince George with a percentage of net gaming revenue, has also had a negative impact on the city, according to the lawsuit.

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City says it paid ‘significant’ premiums to Royal and Sun Alliance Insurance Canada (RSA), one of Canada’s largest property and casualty insurance companies, to obtain protection under its business interruption coverage .

Prince George claims that in August 2020, RSA refused to cover the losses.

He alleges that the RSA is contractually bound to the general civil authority cover of the policy to cover all or part of Prince George’s losses, with the policy also providing cover for losses resulting from business interruption caused by damage caused by an insured risk.

“Viruses are assured perils,” the lawsuit states. “Insured perils include known and unknown perils, including substances such as viral agents that render areas unusable. There is no specific exclusion in the policy for peril or risk of viral pathogens, contagious disease or pandemic.

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The lawsuit notes that the RSA denied the claim for several reasons, including that there had been no physical loss or damage to the insured property to trigger the business interruption cover.

But the suit went on to say that RSA failed to consider the denial of coverage provisions and did not deny coverage based on exclusion clauses.

The City seeks general damages, damages for breach of contract and special damages.

No response has been filed in the lawsuit, which contains allegations that have not been tested in court. RSA could not be reached.

A spokesperson for the Union of British Columbia Municipalities said he had not heard of any other similar lawsuits filed by municipalities in the province.

The Municipal Insurance Association of BC, which provides insurance to 90% of local governments in British Columbia but not to a number of its major cities, including Vancouver and Surrey, could not be reached.

The Insurance Bureau of Canada, the national industry association representing Canada’s private home, auto and business insurers, declined to comment because of the litigation.

RSA has been named as a defendant in several other lawsuits, including claims made by the Edmonton Oilers and its associated companies for $174 million in alleged COVID-related business losses and the Calgary Flames for $125 million in losses. allegedly related to the pandemic, according to the news.

kfraser@postmedia.com

twitter.com/keithrfraser

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Justin D. O'Neill