Hotels Sue Insurance Provider for Denying COVID-19 Coverage

Canadian hotels have launched a class action lawsuit against Aviva Insurance Co. of Canada for being denied insurance coverage for loss of business income related to the pandemic.

In a statement of claim, Lerners LLP alleges Aviva is in breach of contract when it denied the hotels’ loss of business income coverage after the federal and provincial governments declared states of emergency, restricting their business due to the COVID-19 outbreak.

This applies to all hotels who were insured under a commercial insurance policy issued by Aviva pursuant to the hotel program.

Lerners is seeking $150 million, including loss of business income and the accountants’ fees. Each hotel has up to $500,000 of coverage.

Although the hotels were not completely closed, their operations were significantly restricted while access to their business was prohibited in whole or in part by the government closure orders.

The claim says hotels paid premiums for loss of business income insurance with the expectation that Aviva would act in good faith.

The lawsuit was filed on behalf of Roshan Holdings Inc., which owns and operates two hotels, a Home 2 by Hilton located in Milton, Ont., and a Hampton Inn located in Peterborough, Ont.


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