Camps bought coverage for infectious disease, extra expenses, professional fees
In a claim for business losses during the COVID-19 pandemic, the Ontario Superior Court of Justice ruled that the $1 million sublimit for an infectious disease extension also covered extra expenses and professional fees under the insurance policies.
The plaintiffs in this case both operated overnight camps in Ontario – Camp Ramah in Canada in the Muskoka region of Southern Ontario and Camp Manitou Inc. in the Parry Sound area of Northern Ontario. The defendants – Arch Insurance Canada Ltd. and The Sovereign General Insurance Company – were insurance companies registered to operate in the province.
Through the Canada Camps Association Insurance Program, the plaintiffs each bought an insurance policy for the period from May 1, 2019 to May 1, 2020. Arch underwrote 55 percent and Sovereign 45 percent of the policies.
Under section IV F, the insurance policies included an extension for infectious diseases, with coverage of $1 million. The policies also provided coverage for extra expenses under section III A and professional fees under section IV D, provision 11.
The plaintiffs shut down following the government’s emergency and business closure orders amid the pandemic. They could not conduct their usual businesses in 2020 and continued to face requirements and restrictions in 2021.
This case arose after the plaintiffs both claimed business losses suffered during the pandemic. They moved for a determination of the scope of coverage under the policies. The insurers paid them $1 million each for business interruption losses due to the pandemic under the infectious disease extension.
The plaintiffs alleged an additional entitlement to coverage for extra expenses and professional fees. The defendants did not deny coverage for these items. However, they argued that the additional coverage claimed was within the monetary limit for the infectious disease extension.
In The Jewish Theological Society of Canada o/a Camp Ramah in Canada v. Arch Insurance Canada Ltd., 2025 ONSC 374, the Superior Court of Justice of Ontario issued a judgment determining that coverage for both extra expenses and professional fees was subject to the $1 million sublimit applicable to the infectious disease extension.
The infectious disease extension triggered access to coverage for extra expenses and professional fees, the provisions for which included no coverage independent of the infectious disease extension, the court held.
The court said that it did not need to determine the issue raised regarding the period of indemnity for coverage for extra expenses, given that the insurers already paid the plaintiffs $1 million each, the cap on coverage for extra expenses and the infectious disease extension together.
