Despite Contruction Nearly Finished, High St. Businesses Want Compensation
Despite nearing completion, Phase Two of the Cast Iron Water Main replacement still has High Street West businesses looking for compensation for losses surrounding the project.
“The fact SGI has refused coverage reinforces the need to compensate High Street businesses most impacted by the road construction,” Jennifer Henshaw from the Canadian Federation of Independent Business (CFIB) told MJ Independent.
Recently High Street businesses started receiving denial letters from their insurers – including SGI Canada - informing them their business interruption insurance does not cover business losses from construction outside of their businesses.
Businesses have submitted claims to insurers only to find out they only qualify for coverage if their actual premises were damaged.
“Business interruption coverage is triggered only if there is direct physical damage to the premises insured. Business interruption policies also provide coverage if the business owner is denied access due to direct damage to neighbouring premises. These are standard industry approaches and SGI CANADA adheres to the terms of the insurance contract as written,” Tyler McMurchy, Manager of Media Relations at SGI, wrote in an emailed response asking why coverage was denied.
He responded to MJ Independent's questions speaking in general terms as SGI does not speak to the media about specific claims. “However, property & casualty insurance policies are meant to cover losses that are sudden and unforeseen,” McMurchy wrote.
McMurchy provided examples of where coverage would be approved. Examples are as follows:
- your business suffers a business interruption loss as a result of direct damage to insured property by fire
- your business suffers a business interruption loss due to denied access to your premises by the authorities due to a direct damage loss by fire to neighboring premises.
-your business suffers a business interruption loss as a result of direct damage to insured property by windstorm
-your business suffers a business interruption loss as a result of direct damage to insured property by vehicle impact by a third party
Asked if SGI Canada was aware the construction went on for weeks and months longer than initially announced and about the impact it had on businesses McMurchy responded that it had no effect on the final denial of any claim.
“Our understanding is that the maintenance work on High Street was planned and announced by the City. If a business owner did not suffer direct physical damage to their insured property, they would not be covered for business interruption under a property & casualty insurance policy,” he wrote.
Asked if the extenuating circumstances and lengthy construction completion delay couldn’t be taken into consideration and a review could be undertaken he responded what was being asked for isn’t covered.
“Again, this is not the kind of business interruption a property and casualty insurance policy is meant to cover. Any customer who has a question about how their particular insurance policy has been interpreted should contact their broker.”
Asked if there was any insurance businesses could buy to ensure they were covered in the future, McMurchy responded that he was unaware of any available.
The CFIB “is still hearing from frustrated High Street businesses,” Henshaw said, adding that this is not a new call for compensation for the businesses but a continuation of the initial request. The CFIB appeared before Executive Committee earlier to request compensation.
SEE RELATED: CFIB Disappointed with City's Response on High St.
“It’s disappointing to hear the City has done nothing to compensate those most affected by the construction,” she said, adding that the denial of insurance claims meant “that’s why the buck has to stop with the City...it really brings forth the need for the City to compensate those most affected by the construction.”
In a written response the City of Moose Jaw gave two main reasons why they would not be providing compensation.
“While we understand the concerns, the mitigation measures suggested by CFIB are not consistent with common practice in any municipality in Saskatchewan. Were the City of Moose Jaw to initiate those measures, the additional costs to our taxpayers could hamper our ability to continue to invest in infrastructure projects,” the City responded.
Phase Two of Cast Iron Water Main Replacement has been highly controversial, with the City taking control of the project from the contractor Ungar Construction of Theodore, SK, due to claimed problems and shoddy work. The street was voted Worst Road in Saskatchewan on a Canadian Automobile Association (CAA) online poll. Businesses have been vocal in voicing their concerns of the impact the project has had on their establishments pointing to major financial losses.
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