More than twenty student cooperatives are suing their insurance company, The Co-operators, which refuses to compensate them for the financial losses caused by their closure in March 2020, ordered by the Quebec government at the start of the pandemic.
Posted at 9:00 a.m.
They maintain that their policy includes protections against loss of income linked in particular to an interruption of activities pronounced “by the civil authorities” or following the “spread of a contagious disease”.
These student cooperatives, which sell books, computers and other school supplies, are not the only ones to lead this fight. Several companies insured for “operating losses” have also tried to be compensated by their insurer, without success, confirms Jasmin Guénette, vice-president of national affairs for the Canadian Federation of Independent Business (CFIB).
Thus, in the lawsuit filed in the Superior Court on March 29, 2022, 26 student cooperatives, including those of the University of Quebec in Montreal, HEC Montreal, the Collège de Rimouski and the Cégep de Saint-Jean-sur-Richelieu, claim to their insurer a total sum of more than 1.5 million dollars because of the losses incurred by the cessation of their activities.
PHOTO MARTIN TREMBLAY, THE PRESS
The HEC Montréal student cooperative
Starting in May 2020, they alternately sent – depending on when their insurance policy expired – “a notice of claim seeking compensation for financial losses suffered due to the circumstances related to the pandemic of COVID-19, all in accordance with the provisions of the policy,” the suit reads. It is pointed out that the policy offers “various protections against the real loss of income which may result in particular from a ban on access to the insured premises ordered by the civil authorities, or even from an interruption of commercial activities following the spread of ‘a notifiable contagious or infectious disease’.
However, The Co-operators answered them in the negative. The insurance company does not intend to compensate them. It recognizes that “COVID-19 is a reportable contagious or infectious disease”.
However, to explain her decision, she “claims that to her knowledge, there have been no cases of COVID-19 at or near the plaintiffs’ insured premises”. “As a result, there has been no total or partial disruption to business operations caused by a localized case of COVID-19. In short, the defendant maintains that the interruption of the plaintiffs’ activities resulted from the taking of general measures for the purpose of combating the pandemic and not from an isolated case of COVID-19 in [les] insured premises,” the lawsuit says.
There was coverage that was accurate. We are quite convinced that we are right to sue.
Mand Dominique Gilbert and M.and Julien Dubois, lawyers representing cooperatives
The Co-operators declined to comment further on the matter, “because it is an active litigation,” we were told by email.
Several complaints
If he was not in a position to give his opinion on the prosecution of student cooperatives, Jasmin Guénette, of the CFIB, which notably represents companies in the retail trade, confirms that many members who had protection against operating losses” attempted to be compensated by their insurer at the start of the pandemic.
There are many companies who thought that this clause would allow them to be compensated. But they did not succeed. Pandemics are not covered by these contracts.
Jasmin Guénette, Vice-President, National Affairs, Canadian Federation of Independent Business
“Normally, when we talk about property and casualty insurance, business interruption coverage is generally linked to physical damage,” explains Pierre Babinsky, director of communications at the Insurance Bureau of Canada. He cites in particular the case of a fire which would prevent a business from continuing its activities.
“It is possible that some insurance policies contain language that covers government orders, but generally what we see the most are clauses really related to business interruption caused by damage physical, he insists. The majority of business insurance policies are not specific enough to mention government orders. »
After two years of the pandemic, Mr. Babinsky was unable to say whether some insurers now offer coverage for businesses related to diseases like COVID-19.