Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether Extra Expense and Professional Fee claims were separate from the $1,000,000 IDE sublimit.

• Policies clearly stated the IDE limit was "part of and not in addition to" Business Interruption coverage.

• Plaintiffs argued for broader interpretation of coverage beyond the IDE limit.

• Court emphasized reading the policy as a whole and applying principles of contractual interpretation.

• Determined that both Extra Expenses and Professional Fees fell within the IDE limit.

• Costs awarded to defendants due to unsuccessful additional claims by plaintiffs.

Facts and outcome of the case

Background and insurance coverage

The plaintiffs, Jewish Theological Society of Canada (Camp Ramah) and 1310784 Ontario Inc. (Camp Manitou), operated summer camps in Ontario and had insurance coverage for the period of May 2019 to May 2020. Their policies included a specific clause—an Infectious Disease Extension (IDE)—with a coverage limit of $1,000,000.

Due to the COVID-19 pandemic, Ontario government regulations mandated the closure of overnight summer camps. Both camps made claims under their insurance policies for business interruption losses caused by these shutdowns. The insurers, Arch Insurance Canada Ltd. (55%) and Sovereign General Insurance Company (45%), acknowledged liability under the IDE and paid each camp the $1,000,000 sublimit.

Claims for additional compensation

Despite the payments made under the IDE, the camps sought further compensation under two separate heads: Extra Expenses and Professional Fees. They argued these were independent of the IDE coverage and therefore not subject to its $1,000,000 cap. According to the plaintiffs, these heads of coverage were found elsewhere in the policies and should be treated as additional, not overlapping, entitlements.

Court's interpretation of the policy

The court approached the case by analyzing the language and structure of the insurance contracts as a whole. It found the IDE clause expressly stated the $1,000,000 was "part of and not in addition to" Business Interruption coverage, which encompassed both Extra Expenses and Professional Fees.

In interpreting the policy terms, the court applied standard principles of insurance law: if a clause is clear, its plain meaning prevails; where ambiguity exists, the court resolves it against the insurer only if other interpretive tools fail. Here, the policy language was not found to be ambiguous in a legal sense, especially given the explicit integration of Extra Expenses within the Business Interruption section tied to the IDE.

Regarding Professional Fees, the court acknowledged that they were addressed in a separate provision of the policy but concluded that, absent clear language excluding them from the IDE limit, they too were subject to the same $1,000,000 cap.

Final ruling and cost consequences

The court held that the plaintiffs were not entitled to any further payments beyond the $1,000,000 each had already received. It ruled that both Extra Expenses and Professional Fees were limited by the IDE sublimit.

As the plaintiffs were unsuccessful in obtaining additional compensation, the court awarded costs of $20,000 to the defendants.