The COVID-19 Pandemic and Insurance Coverage for Business Interruption in Canada

14 Pages Posted: 28 Jul 2021

See all articles by Erik S. Knutsen

Erik S. Knutsen

Queen's University Faculty of Law

Date Written: June 1, 2021

Abstract

This article explores the impact of the COVID-19 pandemic on the insurance industry and analyzes whether most Canadian businesses are insured for business interruptions and losses caused by the pandemic. The author suggests that pandemic-related losses are insurable. Insurers have had sufficient time and experience to prepare and model their policies to account for events such as the COVID-19 pandemic. Insurance policies typically protect against risks which are triggered only where a business suffers “direct physical loss of, or damage to” property. Ultimately, whether Canadian businesses are insured against COVID-19 business interruptions will depend on how the courts interpret “direct physical loss of, or damage to, property” in the context of pandemic-related losses. The author cautions against engaging in a literalist or dictionary-focused interpretation of insurance policies. Instead, the author argues that equitable and predictable insurance coverage determinations requires a contextual assessment grounded in the role of insurance as a risk-based financial instrument.

Keywords: insurance, pandemic, covid-19, business interruption,contract

Suggested Citation

Knutsen, Erik S., The COVID-19 Pandemic and Insurance Coverage for Business Interruption in Canada (June 1, 2021). 46:2 Queen's Law Journal, 2021, Available at SSRN: https://ssrn.com/abstract=3858033

Erik S. Knutsen (Contact Author)

Queen's University Faculty of Law ( email )

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Canada
613-533-6000 ext. 78360 (Phone)
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HOME PAGE: http://law.queensu.ca/facultyAndStaff/facultyProfiles/knutsen.html

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