Prince George sues insurance firm over COVID-19-related revenue losses


The city of Prince George is suing its insurance provider over the company refused a claim for COVID-19 related revenue losses.

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

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

Also shut down temporarily were swimming pools and the Prince George Conference and Civic Centre.

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

The temporary closure of the Treasure Cove Casino, the operation of which results in Prince George getting a percentage of the net gaming income, also adversely impacted the city, says the suit.

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The 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 gain protection under its business interruption coverage.

Prince George claims that in August 2020, RSA denied coverage for the losses.

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

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

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

But the suit went on to claim that RSA did not consider provisions in the coverage denial and did not deny coverage on the basis of any exclusion clauses.

The city is claiming general damages, damages for breach of contract and special damages.

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

A spokesman for the Union of B.C. Municipalities said he had not heard of any other similar lawsuits filed by municipalities in the province.

The Municipal Insurance Association of B.C., which provides insurance for 90 per cent of B.C.’s local governments but not for a number of its larger cities including Vancouver and Surrey, could not be reached.

The Insurance Bureau of Canada, the national industry association representing Canada’s private home, car and business insurers, declined to comment due to 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 connected to the pandemic, according to news reports.

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