COVID Research: Does Business Interruption Insurance Cover Losses Stemming From COVID-19?

With COVID-19 forcing business to temporally close or even permanently. Does Business Interruption Insurance cover losses from COVID-19?

We asked Alexi the following question.

Will a business interruption insurance policy cover losses stemming from forced closures of certain businesses due to the COVID-19 crisis?

Conclusion:

The insurer-insured relationship is contractual and the parties are parties to an arm's-length agreement. The words of one provision must not be read in isolation but should be considered in harmony with the rest of the contract. An insurance contract, like any other contract, should be construed in a manner that attempts to harmonize and make sense out of the various provisions contained in it and does not strain them. Ambiguities are to be resolved in favour of the insured. But ambiguity does not exist whenever the policy contains wording that could be open to two or
more reasonable interpretations. Before resorting to the contra proferentem principle, an effort should be made to interpret the policy in a commercially reasonable fashion, and in a way that gives effect to the reasonable expectations of the parties (Garneau v. Industrial Alliance
Insurance and Financial Services Inc.)...

For the full memo.

Alexi is a web-based platform that produces legal research memos on demand for lawyers and leverages the latest advances in machine learning and natural language processing to make knowing the law easy and affordable.

Given the current global pandemic as a result of COVID-19, we at Alexi have decided to help by producing and distributing covid-related memos free of charge to help lawyers during these uncertain times. We’re calling this research series “COVID Research”.

For more free of charge COVID-19 related memos, please check our blog