Calgary Flames file $125 million lawsuit against insurers over COVID-19 reimbursements

The Calgary Flames organization is bringing a $125 million lawsuit against its insurers for “massive losses” suffered because of COVID-19 during the past two hockey seasons.

The NHL first halted its operations due to the pandemic on March 12, 2020. Since then, teams in Canadian provinces particularly have been impacted by heavy government mandates preventing fans from being in attendance.

The NHL and 20 other clubs — including the five Canada-based teams not located in Alberta — filed lawsuits similar to Calgary’s in June 2021. That group is collectively seeking reimbursement for more than $1 billion in COVID-19 related losses.

This week, the Calgary Flames LP filed its own claim with the Calgary Court of Queen’s Bench over insurance coverage purchased through a group of six companies. The named defendants are Westport Insurance Corp., Royal and Sun Alliance Insurance Company of Canada, Liberty Mutual Insurance Company, Aviva Insurance Company of Canada, Northbridge General Insurance Corp., and Special Program Group Canada Inc., operating as Can-Sure Underwriting.

In their filing, the Flames said those insurance businesses have concluded that “viruses do not cause physical loss or damage” and that’s why they have not been paid back for any COVID-19 damages, despite the “significant expense” of purchasing an all risks policy.

“The all risks policy broadly covered ‘all risks of direct physical loss or damage,'” Calgary wrote in the filing. “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.

“These covered perils include known and unknown risks, including 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.”

The Flames did not reveal in the documents what the premiums were on their policy.

Calgary asserts the insurance did not include any “broad virus or pandemic exclusions” but that instead, “insurers offered coverage with narrower and fundamentally different exclusions” that still should not prohibit coverage for the types of losses the organization has endured due to COVID.

Further, the Flames referred to fans as “the life blood” of the organization’s revenue, and government protocols outside their control barring people from gathering severely limited operations.

“The purpose of this arena is to allow thousands of fans to gather inside to watch events, consume food and beverages, and vocally cheer on sporting or other events, sometimes with multiple events being hosted each day,” the claim states.

Calgary also points out the team’s “significant expenses” that included repairs and preventative measures required just to reopen the building once allowed.

Statement of defense responding to the Flames’ allegations, which remain unproven, have not yet been registered.