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Calgary Flames sues six insurers for $125 million over pandemic damages

By HUB SmartCoverage Team on March 24th, 2022

Written by:  Lyle Adriano - Insurance Business Canada

Professional ice hockey team Calgary Flames has filed a $125 million lawsuit against its insurers over claims that the companies refused to cover the team’s “massive losses” due to the NHL’s suspended games during the COVID-19 pandemic.

The team filed its lawsuit with the Calgary Court of Queen's Bench, naming six insurance companies as defendants: Westport Insurance; Royal and Sun Alliance Insurance Company of Canada (RSA); Liberty Mutual Insurance; Aviva Insurance Company of Canada; Northbridge General Insurance; and Special Program Group Canada, dba Can-Sure Underwriting.

According to the complaint, the named insurers did not pay for any of the team’s pandemic-related damages because they claimed "viruses do not cause physical loss or damage," despite the "significant expense" Calgary Flames incurred in purchasing an all-risks policy.

"The all risks policy broadly covered 'all risks of direct physical loss or damage,'" the team said in its complaint. "The all risks policy promised to indemnify Calgary Flames LP against loss of revenue and certain other expenses if it could not use its arenas or other insured properties due to the impact of external physical peril.”

Calgary Flames also claimed in its lawsuit that its policy’s covered perils included known and unknown risks, such as “noxious substances that render arenas unusable.”

“COVID-19 and the COVID-19 virus were precisely among the perils and risks covered. In short, Calgary Flames LP purchased the all risks policy to cover the losses that it could suffer as a worldwide series of physical catastrophes like those brought on by the COVID-19 pandemic," it stated.

The team also maintained that while its insurance did not include any broad exclusions on viruses or pandemics, the insurers "offered coverage with narrower and fundamentally different exclusions" – which should not prohibit them from covering the types of losses suffered by the team.

ESPN reported that the Calgary Flames did not reveal in its lawsuit what the premiums were in its policy. The sports news outlet also noted that a statement of defense responding to the lawsuit has not yet been registered.

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