The City of Prince George is suing their insurance company for declining to cover revenue lost at public facilities during the height of the pandemic.
In a notice filed in B.C. Supreme Court, the city contends that its business interruption policy with Royal & Sun Alliance Insurance should have covered the closure of several municipal facilities. In March 2020, the city shuttered all arenas, pools, conference and civic centres in line with public health restrictions.
It also closed doors of the Treasure Cove Casino, which the city has a revenue-sharing agreement with.
The closure of the facilities led to a “substantial loss in revenue” for the city, court documents read.
The city had contracted Royal & Sun to insure its property between July 1, 2019, and July 1, 2020. That policy was later renewed until 2021. The city claims it paid “significant premiums” for the policy, which was said to cover “all risks”.
“Viruses are insured perils,” the claim states. “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.”
The policy was also extended to cover losses while the business was affected by the results of “an order of civil authority” like the public health orders that limited capacity in venues and shuttered spaces like swimming pools and casinos. The policy was meant to cover losses “as a result of loss or damage by a peril or threat thereof”.
But Royal & Sun denied the city’s claims to cover “some or all” of the lost revenue. On or about August 4, 2020, the company said that there had been no physical loss or damages to the property that would have triggered the insurance. It also denied the civil authority extension because there was no threat of physical loss or damage to the space, but spaces were closed because of the pandemic.
Prince George is now seeking relief in the form of indemnity under their policy, general damages, damages for breach of contract and costs.
Royal & Sun has yet to respond to the notice of civil claim. None of the allegations have been tested in court.