Laval restaurants file lawsuit against their insurers

Class action launched alleging non-respect of ‘business interruption’ clause

A group of Quebec restaurant owners, including some in Laval, have joined forces to file a class action lawsuit against their insurance companies after the latter refused to honor claims stemming from damages caused by the COVID-19 pandemic.

Ordered to shut

The COVID-19 pandemic forced bar and restaurant owners across Quebec to shut completely on March 23. This came about following an order issued by the government of Quebec. The effect has led to enormous losses for the restauranteurs and bar owners, however.

“Unfortunately, quite a number of insurers that cover restaurants are refusing to honor their obligations by denying the fact that the impact of this pandemic was an insurable risk,” said lawyer Laurent Debrun of the firm Spiegel Sohmer who is representing three of the claimants.

Three claimants

The claimants are the Bâton rouge and l’Elixor in Laval, as well as 21st Century Foods of Montreal. They are respectively suing insurers Allianz Global Risks, Promutel Assurance and Intact Assurance in Quebec Superior Court.

The Bâton Rouge is among the restaurants that have jumped on board a class action lawsuit against insurers refusing to pay out compensation for businesses losses caused by the COVID-19 pandemic.

For their part, the insurers are claiming that the restaurant owners didn’t suffer any physical losses caused by a disaster (such as a fire or flood), but rather are victims of a governmental decree. At least one of the insurance companies replied as such to a claimant, suggesting that compensation should be sought instead from government assistance programs that have been set up.

Claim not among exclusions

On the other hand, their lawyer maintains that the policies held by the restauranteurs were for comprehensive coverage, including all possible risks, except for certain specific exclusions. He pointed out that “interruption of business” is not among the exclusions and that it should be considered a valid claim during a pandemic.

The lawyer is asking for $739,314 for Bâton Rouge, $570,000 for Elixor, and $270,000 for 21st Century Foods. Some other restauranteurs in the province have also come forward to say they too might want to join the class action suit.