COVID-19 & Insurance

Here is where we are as of January 20, 2021.

Ontario COVID Regulation Update January 20/21:

We have had many inquires from Ontario pet care businesses wanting to know if they are allowed operate or if their insurance policy covers them if they do operate.  We are also aware there have been news reports indicating that dog walkers in Ontario are permitted to operate under certain circumstances (ie. it’s for the health and welfare of the animal or provided through curb side pick-up and drop-off of the dog).

We understand there is a lot of confusion and frustration in the pet care industry, ourselves included, with the ambiguity of the current COVID regulations in Ontario.  Here is the best information we can provide you with at this time from an insurance perspective (sorry, it’s a long post):

  1. We have no inside knowledge and have not seen anything published by the government that specifies what pet care services are considered “necessary for a pets’ health and welfare”. Without seeing anything published about this by the government, we are unable to comment on the accuracy of news reports or their applicability to any specific businesses. We too do not know what pet care services can be legally provided besides those specifically listed under section 22 and 23 of the COVID regulation
  2. We are not able to advise whether it is legal for you to operate as that direction can only be provided by the government since they are the ones responsible for determining what services can be provided and how they are to be provided. Speaking with a lawyer may help you to ensure that you operate in compliance with the COVID laws.
  3. The COVID regulations do not invalidate or cancel your insurance. Insurance policies are in full force and effect for the term of the policy regardless of the COVID regulations in place. However, you still need to operate in compliance with the COVID regulations so you don’t potentially jeopardize your insurance coverage should you have a claim (see point #4 for more on this).
  4. Business owners need to know that if you are providing services that you are not legally allowed to be providing, and a liability claim arises during the time you are operating illegally, it is possible that the insurance company may deny coverage for the claim. This will depend on the specific circumstances of the claim itself.
  5. We have heard from many business owners who have contacted various Ontario government representatives. Some businesses report being told they can’t open; some have been told they can open to provide limited services; and some have been told they can open to provide full services. It seems to be different for each public health region.  Our suggestion is to contact your regional public health department or municipal bylaw office to ask them to clarify if you are allowed to offer any of your services under the current COVID regulations.
  6. If your regional public health department or municipal bylaw office advises you that you are allowed to operate, it is our advice that you get the approval in writing. You are not required to have written approval to operate, but it is our recommendation to have it in writing and to keep that record for a minimum of 2 years should a claim arise and you need to justify your reason for operating.
  7. If you have written approval from your regional public health department or municipal bylaw office, you can expect your insurance to continue to provide the liability coverage you’ve always had. You do not need to provide us with proof that you have approval to operate – just keep that on file for at least 2 years (refer back to point #6 for more on this).
  8. If you are unable to get approval to operate in writing, we recommend you speak with a lawyer to find out how you should proceed. Your insurance policy continues to be in full force and effect even if you are unable to get approval in writing, however, refer back to point #4 above to know how your insurance coverage may be affected.

This is only information from an insurance perspective.  You may want to get legal advice to help ensure you maintain compliance with the COVID regulations if you are operating.

Business Interruption Coverage – Lost Revenue
Liability Coverage
If Your Business is Open
If Your Business is Closed
Operating in Contravention of Government Orders
What Options Do I Have?
Providing Online, Video or Remote Consultations, Training or Advice
What’s Next?

Business Interruption Coverage – Financial Loss

At this time, we are seeing that business interruption claims for lost profit, increased operating expenses, or closure due to government order as a result of COVID-19, are being denied for 3 main reasons.

  1. Most business insurance policies were created to cover property damage claims and the financial loss that results from property damage.  We are seeing that insurance companies in general are not currently considering the COVID-19 pandemic as having caused property damage. Since insurance companies aren’t considering the pandemic to be property damage, then it follows that business interruption coverage does not apply.  Claims for business interruption are being denied on this basis.
  2. The policy has a condition that excludes coverage for loss or damage caused by delay, loss of market or loss of use or occupancy. So, if your losses are caused by the government ordering you to close your business because it’s deemed “non-essential”, or if customers are staying away from your business or postponing appointments due to quarantine or social distancing, we are seeing insurance companies apply this exclusion.  Claims for business interruption are also being denied on this basis.
  3. The policy has an exclusion for loss or damage caused directly or indirectly by a service interruption due to contamination.

There is not a lot of precedence for the current situation.  It is likely that these conditions and exclusions will get challenged in court in the coming months and years, which could change the coverage available, but currently, this is the best information we have available.  At this time, we are seeing these claims being denied, but if you wish to submit a claim to have your insurance company determine if your policy will provide coverage for your specific situation, please let us know.

Note that in early April there has been a suggestion in the legal and insurance industries that if COVID-19 has been determined to be present within your premises, that it may be considered as physical damage, which could trigger business interruption coverage to respond.  At this time, we do not know if this will or won’t trigger coverage.  If COVID-19 has been present on your premises, we recommend you contact us to submit a claim so your insurance company can asses your specific situation and determine if coverage will apply.

Liability Coverage

Unfortunately, there is no clear answer at the moment as to whether the General Liability coverage on a policy will respond to COVID-19 related lawsuits.  There isn’t any precedence to give direction as to what to expect.  We have asked the insurance company for clarification on their intent so we can advise our client’s better, but we do not have an answer on this yet.

The General Liability coverage on the policy includes coverage for sickness or disease sustained by a person, which is good.  However, there is some question as to whether the virus could be considered pollution or possibly spores/mold/fungus (depending on the specific allegations made), which general liability policies don’t cover.  These are common exclusions in Canadian General Liability policies.

It is quite possible that this will have to be debated between lawyers to determine if coverage will apply as there are a variety of allegations that could be brought forward and would have to be tested in court to determine if coverage will apply.

If you are continuing to operate your business and interact with customers and co-workers, we recommend that you follow the recommendations of the health authorities and have a clear and enforced pandemic policy to limit transmission of the virus and keep sick workers home.

If Your Business is Open

Business owners are responsible for the safety and protection of employees and customers, and anyone else coming into your business premises.  If you are operating during the pandemic, we highly recommend you have a written COVID-19 operational plan documenting the procedures in place for your business to minimize the chance of transmission of the virus.  This also helps to minimize your liability exposure.  Refer to for additional information and a Back to Business Kit specific to each province, including a template COVID-19 operational plan that you can use.

If you have started making products like face masks or sanitizer, or started a delivery service, please let us know as these can have significant insurance and liability implications.

If Your Business is Closed

If your business location is closed and you’re not currently operating but intend to when you’re permitted to re-open, we recommend you take the following steps:

  1. Maintain the heat to minimize the chance of frozen pipes or damage to equipment and furnishings.
  2. Turn the water off at the water main to limit the chance of damage from a burst pipe or other plumbing issues.
  3. Check the premises as often as authorities are allowing or at least once a week if it’s safe for you to do so.

Note that if you are moving contents away from your business premises, please let us know so we can ensure you have the right coverage as policies typically limit coverage for items moved away from the premises.

If your business location is closed and you do not intend to return or re-open, let us know right away as your policy will likely require alterations to ensure you have proper protection in place.

Operating in Contravention of Government Orders

If you choose to keep operating your business in contravention of government orders, it is possible that it could jeopardize your liability coverage. For instance, if a customer contracts COVID-19 and they allege that your negligence caused them to contract the illness, if you should not have been operating, it is possible the insurance company could deny your liability coverage. At this time, there is no clear answer as to whether any liability claims involving COVID-19 will be covered by liability insurance, however operating in contravention of government orders makes it even murkier as to whether coverage would be provided.

In short, if you’re subject to a government order to close your business, we highly recommend you close your business to minimize health risks and your liability risk.

What Options Do I Have?

Contact our office if you would like us to review your policy and find out what options available for your specific situation to help manage your insurance costs.

Please note we’ve had an extremely high demand for this service.  It is a fairly lengthy process for us to complete the review and provide appropriate advice to each client.  As a result, there may be a delay in responding to inquiries.  We are working hard to ensure each email and phone call is returned with a considered response.  Thank you for your patience.

Providing Online, Video or Remote Consultations, Training or Advice

We are hearing from more businesses, particularly dog trainers and pet first aid trainers, who are switching to providing online, live video or other remote consultations, advice or training. The PROfur policy will automatically cover you for this provided:

  • The services, advice and training is no different than what you normally provide in-person and that is covered on your existing policy. For example, if you have typically provided behaviour training and puppy classes in person, you are also covered to provide that service online or by video;
  • Your customers must be located in Canada. If you begin servicing customers located outside of Canada, it can invalidate your insurance coverage (this is because the risk of lawsuits can be significantly higher).

If you are providing any consultation or advice at all, whether it’s online, but phone, email, text, social media posts or video, we highly recommend you keep your liability coverage in place as you can be held liable for any advice you give.  Keep in mind that there is no coverage if your online postings, including social media posts and videos, are alleged to have caused:

  • Libel, slander, disparaging a person or organization or their goods, products or services
  • Publication of material that violates a person’s right of privacy
  • Defamation
  • Misappropriation of advertising ideas or style of doing business
  • Infringement of copyright, title or slogan

If you begin to provide vocational training for compensation (for example, charging others to provide them with training to develop the skills and knowledge required to perform a particular job), your PROfur policy will not automatically cover that. In this case, please contact us to talk about your options.

What’s Next?

Like all businesses right now, we are waiting to see what the federal and provincial governments are going to do to help ease the impact COVID-19 is having on citizens and businesses. We’re all in this together.

We will update this posting as new information comes available that affect insurance.

In the meantime, if you need to see if adjustments can be made to your policy reduce costs, please contact us. We are currently experience a very high number of customer service inquiries and are working hard to respond to calls and emails as quickly as possible. We appreciate your patience. Thank you and best wishes during trying times.

Chris Ingoe, President (signature)
Chris Ingoe, CAIB

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