Insurance Law Blog
Knowledge Centre

Windfall from wildfire reduced covered loss

April 11, 2023

Insurance law – Commercial general liability insurance – Property damage – Rental loss – Indemnity contract – Interpretation of policy – Practice – Summary judgments – Appeals

Shelter Canadian Properties Ltd. v. Aviva Insurance Co. of Canada, [2023] A.J. No. 216, 2023 ABCA 74, Alberta Court of Appeal, March 3, 2023, P.A. Rowbotham, D. Pentelechuk and K.P. Feehan JJ.A.

The insured landlords sought coverage under a commercial insurance policy for loss of rental income from properties damaged in the Fort McMurray wildfire. The policy provided for indemnity in the amount by which the gross rentals fell short of the standard gross rentals, and that adjustment shall be made to standard gross rentals to provide for the trends of, variations in or special circumstances affecting gross rentals. The insurer took the position that the insured received a net windfall rather than a loss, because the wildfire led to increased demand for rental housing which the insured successfully rented out. Occupancy before the fire was only around 50% and increased after the fire. The trial judge determined that coverage was available for the loss of rent from tenants whose units were deemed uninhabitable, and for vacant units that could have been rented out while the premises were uninhabitable, calculating total compensation at $1,254,000.

The insurer appealed, which was allowed in part. The Court of Appeal found that there should be an offset for the amount of rent collected from new tenants and to account for security deposits retained by the insured. The principle of indemnity required that the insured receive no more from the insurer than the financial loss suffered. The appeal was allowed with respect to loss of rent for vacant units, and the parties were directed to recalculate the loss with respect to loss of rent for occupied units.

This case was digested by Joe Antifaev, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Joe Antifaev at [email protected].

To stay current with the new case law and emerging legal issues in this area, subscribe here.

Tags

Expertise

Important Notice: The information contained in this Article is intended for general information purposes only and does not create a lawyer-client relationship. It is not intended as legal advice from Harper Grey LLP or the individual author(s), nor intended as a substitute for legal advice on any specific subject matter. Detailed legal counsel should be sought prior to undertaking any legal matter. The information contained in this Article is current to the last update and may change. Last Update: April 11, 2023.

Related

Harper Grey’s New Website Recognized by Hermes Creative Platinum Website Award
Harper Grey’s New Website Recognized by Hermes Creative Platinum Website Award
Erin Hatch appointed Harper Grey’s Chief Diversity Officer
Erin Hatch appointed Harper Grey’s Chief Diversity Officer Erin Hatch appointed Harper Grey’s Chief Diversity Officer
Rose Keith, KC authors Mediation Moment column for Summer 2024 Issue of The Verdict
Rose Keith, KC authors Mediation Moment column for Summer 2024 Issue of The Verdict Rose Keith, KC authors Mediation Moment column for Summer 2024 Issue of The Verdict
Roshni Veerapen explores the critical issue of mental health in her recent BarTalk article
Roshni Veerapen explores the critical issue of mental health in her recent BarTalk article Roshni Veerapen explores the critical issue of mental health in her recent BarTalk article
Rose Keith, KC authors Employment Update Column for Summer 2024 Issue of The Verdict
Rose Keith, KC authors Employment Update Column for Summer 2024 Issue of The Verdict Rose Keith, KC authors Employment Update Column for Summer 2024 Issue of The Verdict
Expanding the Scope of Cost-Recovery Actions under BC’s Environmental Management Act
Expanding the Scope of Cost-Recovery Actions under BC’s Environmental Management Act Expanding the Scope of Cost-Recovery Actions under BC’s Environmental Management Act Expanding the Scope of Cost-Recovery Actions under BC’s Environmental Management Act
Natasha Cooke elected to Insurance Law section of Canadian Bar Association
Natasha Cooke elected to Insurance Law section of Canadian Bar Association Natasha Cooke elected to Insurance Law section of Canadian Bar Association
Harper Grey Supports the 2024 ACEC-BC Awards
Harper Grey Supports the 2024 ACEC-BC Awards
Harper Grey to host Angel Forum x Startup TNT for a Founder Check-In
Harper Grey to host Angel Forum x Startup TNT for a Founder Check-In
Tribunal finds no discrimination where there is a valid business reason for termination
Tribunal finds no discrimination where there is a valid business reason for termination Tribunal finds no discrimination where there is a valid business reason for termination
Harper Grey Hosts 2024 Spring Insurance Law Seminar
Harper Grey Hosts 2024 Spring Insurance Law Seminar
Nick Sulentic to present “Law Firm Finance for Non-Finance Professionals” to BCLMA members
Nick Sulentic to present “Law Firm Finance for Non-Finance Professionals” to BCLMA members Nick Sulentic to present “Law Firm Finance for Non-Finance Professionals” to BCLMA members
Harper Grey welcomes 2024 Temporary Articling (Summer) Students
Harper Grey welcomes 2024 Temporary Articling (Summer) Students
“Dependent” Contractors Entitled to Reasonable Notice of Termination
“Dependent” Contractors Entitled to Reasonable Notice of Termination “Dependent” Contractors Entitled to Reasonable Notice of Termination
Charleen Sibanda attends 2024 Black Business Summit hosted by the Black Entrepreneurs & Businesses of Canada Society (BEBC)
Charleen Sibanda attends 2024 Black Business Summit hosted by the Black Entrepreneurs & Businesses of Canada Society (BEBC) Charleen Sibanda attends 2024 Black Business Summit hosted by the Black Entrepreneurs & Businesses of Canada Society (BEBC)
arrow icon

Subscribe