Does a pandemic differ from an outbreak of disease?
That could be the 100-million dollar question facing the courts right now as hundreds of businesses across the country are suing insurance giant Aviva.
Bingemans, the largest hospitality business in Waterloo Region, is one of those companies who turned to their insurer after losing millions so far to the pandemic.
"Our policy has a business interruption coverage and when we got into the pandemic and, certainly in the first few weeks and months, we started looking at that and, in reviewing with our broker we pulled up that paperwork and said, by reading the definitions and by reading our documents, we should be able to apply for this for some assistance," said Mark Bingeman, President of Bingemans.
But despite their understanding of the business interruption coverage, that application was denied.
"We asked for the reasoning and then we actually resubmitted and sent it to [Aviva's] ombudsman, and after some review internally there the ombudsman for Aviva came back and said no, we agree this is not applicable," said Bingeman.
"That still didn't sit well with us because we felt we can read it in plain English, this is what it says."
Specifically, Bingemans says Aviva's business interruption policy, which it pays a premium for, claims to cover loss of income caused by the interruption of the business when entering and exiting from the premises is restricted, including when ordered by a civil authority following an outbreak of a contagious or infectious disease.
The issue then seems to fall to whether a pandemic differs from an outbreak, which is the argument that has been made previously by other insurance companies.
The CEO of Chubb Limited, in an interview with Bloomberg last spring, warned lawmakers forcing insurers to foot the bill for these policies during a pandemic, not just an isolated outbreak, could cause the insurance industry to go bankrupt.