Class action lawsuit filed against insurers refusing to pay business interruption insurance

A Regina business owner is at the centre of a national class action lawsuit filed Friday against indemnity insurers refusing to cover losses during the COVID-19 pandemic.

Thomas Siarkos, owner of Memories Fine Dining in Regina, alleges his insurance providers are not paying business interruption insurance, claiming that a global pandemic isn’t covered in his policy.

“I have purchased insurance since day one for my place in order to be able to protect myself and my staff,” Siarkos, who opened the restaurant in 1989, said.

“I was told although that the pandemic is not listed in the policy, that I wasn’t able to collect any lost business.”

Siarkos said he was forced to lay off 28 staff members when the province announced closures for many retail businesses and restaurants last month.

He estimates he was lost anywhere between $100,000 and $150,000 already, with  more losses expected the further the pandemic spreads.

“I thought I should be entitled to some kind of a compensation from the insurance,” he said.

“I’ve been paying for 31 years. Right now when I need it the most ever, they have turned their back on us.”

Siarkos remains confident he will be able to reopen once the pandemic is over, but worries restaurants across the country won’t see the same sort of revenue as customers financial security remains uncertain.

The national class action lawsuit was filed by Merchant Law.

“Indemnity insurers are wrongfully refusing to honour their contracts. They say the contracts have been frustrated. Business owners intended their insurance to cover against this. Insurance companies should pay,” lawyer Anthony Merchant said in a release.

Co-operators General Insurance Company, Desjardins Financial Security Life Assurance Company and Aviva Canada Inc are named as defendants in the suit.

In a media release, Merchant said that “insurance companies are claiming force majeur and refusing to pay”, referencing a clause in most insurance contracts preventing a company or person from fulfilling a contract based on an unforeseen event or circumstance.

“This was foreseeable — it is not force majeur,” Merchant said.

After a successful 2019, Siarkos feels the most for his staff, who he calls family.

“We were on pace to have the best March in our history. For that to be back to zero — it’s devastating,” Siarkos said.

“It’s a double whammy. I never thought in my 31 years of business I would ever experience a day like this.”