Strict proof of business loss may not be required when the insured peril destroys documentation

When the particulars of a loss are destroyed by the insured peril the court will be more sympathetic to the insured when determing the quantum of the loss

Visual Design Consultants Inc. v. Royal and Sun Alliance Insurance Co. of Canada, [2012] N.S.J. No. 682, December 18, 2012, Nova Scotia Supreme Court, R.W. Wright J.

The insured brought an action against its insurer for damages for business interruption loss. The insured was a graphic design firm whose premises were destroyed by Hurricane Juan. Most of the insured’s electronic equipment was destroyed. At the time of the disaster, the insured had a commercial policy with the insurer which provided coverage for “business interruption loss; increased cost of working; and professional fees toward the cost of hiring accountants and other professionals to assist the insured in making a claim”. The insured and insurer were unable to agree on the amount of the loss.

The court considered the impact of the hurricane on the insured’s business, the relevant sections of the insurance policy, the indemnity period, and concluded that the insured had met its evidentiary burden of proving a business interruption loss in the aggregate amount of $230,990.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP.

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