The ongoing protests in Ottawa and at the Ambassador Bridge border crossing in Windsor have been making headlines for weeks since they began in January. Since then, a number of legal issues have arisen, including how insurance could play a key role.
On February 14, the government of Canada announced that it would be invoking the federal Emergencies Act to “end disruptions, border blockades, and the occupation of Ottawa’s downtown core”. As part of the steps promised, Deputy Prime Minister Chrystia Freeland vowed to suspend insurance on vehicles involved in illegal activity and blockades.
Business interruption insurance policies have also been in the spotlight as of late, as many Ottawa businesses have closed due to accessibility issues and/or safety concerns for staff and patrons.
Lastly, a class action lawsuit has been launched against convoy organizers and participants by businesses and residents looking to recoup losses and compensation for damages suffered.
Government Vows to Suspend Insurance Coverage
When the government announced that insurance coverage could be suspended for illegal activity after the invocation of the Emergencies Act on February 14th, few details were provided, leaving insurers with many questions. Specifically, insurers pointed out that most policies contain wording that would require an insurer to take specific steps before voiding coverage, such as providing the insured with a registered letter of notice. Further, many raised questions about what would happen if a vehicle with a suspended policy were to be involved in an accident.
The official Emergency Economic Measures Order: SOR/2022-22 released on February 15th, has since provided some clarity on the specifics around insurance suspension. The Order specifies that insurance is to be suspended for any vehicle involved in a “public assembly”, as defined in the Emergency Measures Regulations, which states:
A person must not participate in a public assembly that may reasonably be expected to lead to a breach of the peace by:
(a) the serious disruption of the movement of persons or goods or the serious interference with trade;
(b) the interference with the functioning of critical infrastructure; or
(c) the support of the threat or use of acts of serious violence against persons or property.
If a vehicle with a suspended policy is involved in an accident, the injured party could seek compensation through their own insurance policy. If neither party is insured, an injured person would likely need to seek coverage through the Motor Vehicle Accident Claims Fund. However, there are still many unanswered questions from a legal standpoint, such as:
- How are insurers to know when a vehicle they insure is involved in a public assembly?
- What will happen with premiums paid on suspended policies?
- Will vehicle operators who have their insurance suspended be subject to fines or penalties under the provincial Compulsory Automobile Insurance Act?
The Insurance Bureau of Canada stated to Canadian Underwriter that it will work with the federal government to “gain clarity on elements of the Order and determine how best to implement the provisions within it.”
Businesses Consider Coverage for Closures Due to Safety Concerns
One unfortunate result of the protests in Ottawa and other impacted areas involves businesses that have been unable to operate due to blocked roads or safety concerns for customers and staff. This has led many to wonder if they will have any recourse through business interruption insurance coverage.
According to a number of industry experts, coverage may be unlikely in this scenario for several reasons:
- Many business interruption clauses require property damage as a factor before coverage will be granted. In the absence of property damage, closures due to blockades or public emergency orders, may not be covered.
- Even if there is property damage, damages covered by civil disability may not be part of the risks covered by the policy.
While local insurance brokerages anticipate receiving business interruption claims in the coming weeks, none have been received as of yet.
Class Action Launched Against Convoy Seeking Hundreds of Millions in Damages
While insurance coverage remains an unanswered question for those who have been impacted and suffered financial losses due to the convoy, some injured parties are looking to litigation as a means to recoup losses and compensate for injuries. On February 4, a class action was filed against convoy organizers on behalf of Centretown residents seeking $9.8 million for emotional and mental distress as well as punitive damages. Since then, the action has grown considerably, with many businesses, such as local restaurants, joining as plaintiffs. The claim is now seeking over $300 million in damages and has also expanded the defendant list to include those who have donated funds to the convoy. The action could grow further, or new actions could arise, the longer the disruptions continue in Ottawa and in other cities across Canada.
We will continue to watch the situation for new developments as they impact the worlds of business, litigation, and insurance.
Contact Milosevic Fiske LLP For Exceptional Legal Representation in Insurance Related Matters
The highly-experienced Toronto litigation lawyers at Milosevic Fiske LLP represent clients with insurance-related legal issues. They understand the importance of swift, resourceful action where insurance matters are involved and act quickly to help clients receive maximum compensation for their injuries or harm suffered.
The litigation lawyers at Milosevic Fiske LLP also act as defence counsel in class action claims. The firm’s co-founder, David Milosevic, has a Master of Laws in Civil Litigation with a focus on class action litigation and has the necessary skills and experience to defend even the most complicated class-action lawsuits.
To learn more about how Milosevic Fiske LLP can help you, call 416-916-1387 or contact us online.