COVID-19: Vancouver Canucks and 19 NHL teams sue insurance companies

David Klein: “The insurance companies’ strategy is consistent with what they have done to businesses, large and small, across Canada, which is to deny coverage and force companies to sue.

Publication date :

06 January 2022 • January 6, 2022 • 4 minute read • Join the conversation

The Vancouver Canucks and 19 other NHL teams are suing five insurance companies in a bid to recover what they claim is US$1 billion in losses due to the COVID-19 pandemic. Photo by Bob Frid /USA TODAY Sports

The Vancouver Canucks and 19 other NHL teams are suing five insurance companies in a bid to recover what they claim is US$1 billion in losses due to the COVID-19 pandemic.

According to documents filed over the past six months in a California court, the owners of the 20 NHL teams — including the Aquilini Investment Group, which owns the Canucks — and the league itself, say they believe their insurance companies are in breach of contract. Four other Canadian teams are also involved, the Toronto Maple Leafs, Ottawa Senators, Winnipeg Jets and Montreal Canadiens.

The Canucks declined to comment.

TSN’s Rick Westhead first reported the filing complaint Wednesday.

“Fan attendance is the lifeblood of plaintiffs’ revenue,” said the NHL’s claim, as reported by TSN. “A significant source of income for plaintiffs comes from arena-related activities, such as ticket sales, concessions, parking and the sale of merchandise in the arena. The extra expenses the NHL incurred to host the 2020 playoffs and Stanley Cup Finals were enormous. »

“The perils covered include both known perils and, more importantly, new, unknown perils. COVID-19 and the COVID-19 virus are exactly those kinds of perils. In short, the hockey plaintiffs purchased the comprehensive policies to specifically cover the losses they suffered from a series of almost unimaginable, multi-arena, multi-country physical disasters,” the suit alleges. “In addition to selling broad coverage, insurers – in an effort to make their policies more marketable – chose not to include the extended virus or pandemic exclusion that most other insurers used to exclude coverage of all losses related in any way to viruses or pandemics,” note the plaintiffs. This is different from the policies taken by the organizers of Wimbledon and the NCAA’s March Madness basketball tournament, whose insurance specifically included pandemic coverage. The teams’ policies cover damage and repair costs to their physical property as well as loss of income due to orders from “civil or military authority” that place limits on access to their arenas.

Lawyers for the teams argue that losses incurred when a communicable disease renders club arenas unfit for their intended use should be considered damage to their properties. And not only did they see losses because they couldn’t sell tickets, but they had to spend on new air filtration systems and other measures to mitigate the risk of infection, all costs created by the risk to public health.

Their lawsuit argues that these requirements should also be covered by their policies.

Among the defendants named in the case is the Factory Mutual Insurance Company. The Canucks and 18 other NHL teams purchased insurance from Factory Mutual, the Nashville Predators from the Cincinnati Insurance Company, one of four other companies named in the lawsuit.

The NHL and its teams allege they provided loss reports to Factory Mutual on March 13, 2020, but that Factory Mutual told the NHL in May 2020 that finding COVID-19 at an insured location did not constitute physical harm. of the insured type.”

This was an effort by Factory Mutual to transfer all of their pandemic-related claims into their limited communicable disease coverage, “despite the realities of the damage caused by COVID-19 and the COVID-19 virus,” the company alleged. NHL.

David Klein, managing partner of Klein Lawyers, told Postmedia that Factory Mutual’s response to the NHL was very familiar.

“The insurance companies’ strategy is consistent with what they have done to businesses, large and small, across Canada, which is to deny coverage and force companies to sue,” he said. stated in an email.

“That’s why there’s been a deluge of class action lawsuits sneaking their way through the courts. The outcome will depend on the specific wording of each insurance policy and the various endorsements (i.e. additional coverage) attached to those policies.

Klein’s company has multiple class records actions related to COVID-19 insurance claims.

“Because these differ from one insurance company to another, there will not be a single answer that applies to everyone. The pursuit of hockey teams is neither a slam dunk nor a hopeless cause. This is where lawyers and courts come in,” he said.

Once the remainder of the 2019-20 regular season was canceled following the NHL’s March 2020 hiatus, the league settled into bubbles in Toronto and Edmonton, without fans, to complete the playoffs of the Stanley Cup 2020.

Between the canceled games and the costs incurred to set up the bubble environments, the suit says teams have lost over US$1 billion. The NHL has cut its 2020-21 regular season schedule to 56 games, with some games in the United States later in the season and in the playoffs played with fans in the stands. But most games, including nearly all of those played in Canada, have been played without fans. In November, Factory Mutual filed a lawsuit asking a judge to dismiss the NHL’s claim, citing the absence of “physical loss or damage” to plaintiffs’ property. The NHL and its teams involved in the lawsuit filed an objection in December to the dismissal request.

— with files from the Toronto Sun

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Kristan F. Talley

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