When Dr. Michael Duchnay had to close his west end Toronto dental practice due to the pandemic, it was catastrophic, but there was one stroke of good luck: He had insurance. In fact, his business policy explicitly mentioned pandemic-caused closures.

But when he shuttered his shop March 15 after an advisory from the Royal College of Dental Surgeons of Ontario strongly recommended he do so, his initial attempt to collect was rebuffed.

It took two weeks of runaround before insurance giant Aviva Canada agreed to pay him and other Ontario dentists for the pandemic coverage included in their expensive policies.

But while the dentists may have won their fight, other Ontario business owners might not be so lucky, experts say.

“I would say that given the extent of the loss here, cutting across multiple industries, really all sectors, the insurers are in a bit of a difficult situation,” says Toronto lawyer Hovsep Afarian, who specializes in insurance coverage law.

“So their reflexive response has been, let’s deny and we’ll sort things out later,” says Afarian, who works at the national firm McCarthy Tetrault LLP.

He says denials are being made to all kinds of claims — likely, he believes, because the insurance companies are hoping that Ottawa will offer up more aid in the meantime.

“I think a part of it may be motivated by the potential for the government to step in and provide alternative avenues for redress,” says Afarian who has already taken on pandemic clients.

“So if there’s another pocket involved, the insurers have essentially mitigated their loss because no doubt they’re going to say ‘look to the government first.’ ”

Aviva Canada CEO Jason Storah announced Tuesday evening that the company would be honouring its pandemic commitment to dentists, saying they had a unique arrangement for such viral coverage.

“There were a number of complex legal, regulatory and operational hurdles related to the dentists’ claims that we simply had to work through,” Storah said in a statement.

But, Storah said, the hurdles have now been overcome.

“As a result I can confirm today that Aviva Canada will of course stand by this pandemic coverage,” he said, adding there would be guidance from the company soon on making claims.

Afarian says most businesses would not have pandemic language written into their property policies. And if they don’t, he says, there is a real legal question as to whether pandemic related interruptions are covered.

“Business interruption is usually a component of a property policy (for which) you need physical damage,” Afarian says.

“So the debate in the industry is ‘do we have physical damage if there is a virus in the building?’ ”

That issue is already before the courts in the United States and will doubtless be litigated in Canada as well, he says.

“It’s going to be an interesting debate,” he says, adding that awards may well come down to whether there was an actual case of COVID-19 or the mere threat of the virus in a particular business.

David Mackenzie, a Toronto lawyer who acts as council for major Canadian and international insurers, says income loss claims made on property policies are typically dependent on physical damage being done by fires, floods, windstorms and the like.

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“The business income protection will say ‘if you have physical damage to property and you lose business income because of that, then we will cover your business income,’ ” says Mackenzie, who practices at the firm Blaney McMurtry LLP.

“The pandemic isn’t a physical injury to property and so that’s the problem that most (people), I think, are running into. That’s the basis of most denials of coverage,” he says.

Mackenzie agrees that vast income losses experienced by businesses across the country during the pandemic may well need government money to redress.

“The insurance industry hasn’t issued policies to deal with this problem. It wasn’t within their contemplation that they’d be paying out claims for a pandemic,” he says.

“And so to the extent that this particular problem exists, then it probably is going to have to be someone like the government that steps in and does it.”

But insurers do face increasing perils as the pandemic lengthens, Mackenzie says.

“The longer you leave businesses and buildings unoccupied the more likely they are to suffer damage,” he says.

Afarian says an official for a local brokerage told him last week that the firm had already seen more than 1,300 coronavirus-based claims come into its office.

And Afarian sees the potential of a lot more work for lawyers in his legal specialty.

“The insurance industry obviously thinks that having a virus in the building does not constitute property damage and they want to be able to litigate that,” he says.

“And when the stakes are this high, they are willing to spend money on litigation.”

This story has been updated to reflect that Aviva Canada announced on Tuesday that it would pay claims by dentists who have pandemic-specific clauses in their insurance.

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