Lawsuit of the week: Long-term care operators say insurers wrongfully denied COVID-19 loss claims

Seniors’ home companies claim compensation, damages stemming from outbreak-related losses at facilities in B.C. and Alberta

Operators of long-term care homes including Dufferin Care Centre in Coquitlam are suing to recover COVID-19-related losses | Stefan Labbé, Glacier Media

A trio of long-term care home operators is suing a group of insurance companies for losses related to COVID-19 outbreaks at facilities in British Columbia and Alberta in 2020.

PR Seniors Housing Management Ltd., Dufferin Seniors Village 3 LLP and Millrise Seniors Village 3 LP filed a notice of civil claim in BC Supreme Court on March 2, naming Aviva Insurance Co. of Canada, Royal & Sun Alliance Insurance Co. of Canada, Tokio Marine & Nichido Fire Insurance Co. and Allianze Global Risks US Insurance Co. as defendants.

According to the claim, PR Seniors Housing Management and its affiliate, Dufferin Seniors Village, operate the Dufferin Care Centre in Coquitlam, a “home for individual requiring complex care.” Millrise Seniors Village, meanwhile, is a seniors’ residence in Calgary operated by the limited partnership that is also affiliated with PR Seniors Housing Management.

The plaintiffs claim they’re insured under an all-risks policy issued by the defendants, with Aviva holding the largest stake at 50 per cent, followed by Royal & Sun at 30 per cent, Alliance at 15 per cent and Tokio Marine holding the remaining five per cent. The policy, the lawsuit says, covered business interruptions under an “infectious disease extension,” including loss of business income and expenses for medical tests, vaccinations and facility closures due to government orders should an outbreak of “any human infections or human contagious disease” occur on the insured premises.

In March 2020, the claim states, a staff member at the Dufferin Care Centre tested positive for COVID-19, leading the Fraser Health Authority to declare an outbreak at the care home and ordering the facility to “implement enhanced control measures.”

The measures altered staffing level requirements, restricted visitors to the home and prompted new cleaning and infection control methods and infection screening for staff and residents. While the outbreak abated by May 2020, the control measures caused Dufferin to suffer “a reduction in gross earnings” due to expenses for medical supplies including personal protective equipment, food and kitchen supplies and lost income because of “a lack of admissions of new residents and unexpected payroll expenses.”

The Dufferin facility experienced multiple COVID-19 outbreaks and multiple resident deaths, though the lawsuit doesn’t include details of resident or staff infections, nor does it specify the amount of the facilities’ allegedly insured losses.

Similarly, at the Millrise Seniors Village, a staff member test positive for COVID-19 on April 11, 2020, spurring Alberta Health Services (AHS) to declare an outbreak a few days later. In early May 2020, the Alberta Ministry of Health ordered that the services agreement with Millrise be terminated, and appointed AHS as administrator of the facility, where several residents died and more than a dozen staff members contracted COVID-19.

The plaintiffs claim the insurance companies denied coverage for the Dufferin facility’s losses in November 2021, while they submitted a claim for the Millrise facility’s losses in March 2022 which to date “the insurers have not confirmed that the Millrise Losses are covered under the Policy.”

PR Seniors Housing Management Ltd., Dufferin Seniors Village 3 LLP and Millrise Seniors Village 3 LP seek indemnity for all losses covered under the insurance policy and unspecified general damages for breach of contract. The allegations have not been tested or proven in court and the insurance company defendants had not responded to the claim by press time.