Aviva Canada's C$150 Million Settlement Ends Canada's Biggest COVID Business Interruption Class Action After Six Years, With Court Approval on October 16 and Fees of C$40.68 Million

A five-year legal fight over whether business interruption insurance should have paid for COVID-19 shutdowns has ended with a C$150 million settlement by Aviva Canada. The Ontario Superior Court approved the deal on October 16, 2026, according to a report published by Insurance Business Canada on October 26. The article calls it the biggest COVID business interruption class action in Canada. This summary draws only on that report and does not rely on the court order itself, which was not reviewed.

What the settlement is

The class is made up of about 49,000 policyholders in Ontario, Quebec and British Columbia. Four Ontario businesses served as representative plaintiffs. The settlement involves no admission of liability by Aviva, and the court did not rule on whether the policy wordings covered losses from pandemic closures. That point matters because the central legal question, whether the policies responded to COVID shutdowns, remains undecided in this case. Settlement approval tests whether a deal is fair and reasonable to the class; it does not decide who was right.

Who is in the class

The class consists of policyholders who had restricted access endorsements or negative publicity endorsements. A negative publicity endorsement responds when an outbreak of an infectious disease occurs within 25 kilometres of the insured premises. Although the class is large, the number of policyholders who formally notified Aviva of a claim was much smaller: about 3,600 gave formal notice, and the report says 2,162 of them held the relevant coverage. This gap between the 49,000 class members and the few thousand with notified claims explains part of the settlement's logic, since the compensation process has to deal with a large group of people who may never have made a formal claim.

Timeline

The case was filed in July 2020, a few months after the pandemic began. It was certified as a class action in March 2023, which allowed it to proceed on behalf of all those policyholders. A six-week trial was scheduled for January 2026, and the parties settled through mediation before it took place. The article describes the process as roughly five years of litigation.

Why both sides settled

The report sets out risks on each side. Aviva argued that about 95% of policyholders had never filed formal claims, which would limit what they could recover. Class counsel pointed to the need to prove coverage, the task of valuing tens of thousands of claims and the prospect of years of appeals even after a trial win. Both sides therefore faced uncertainty about the outcome, and a settlement removed the risk of a loss for either side as well as the delay of an appeal.

The objections

Nine valid objections were filed with the court, and one objector attended the hearing: a lawyer acting for his daughter. The objection was that the claims protocol pays all class members for 30 days of loss, although her policy had a 60-day period. He described this as confiscation. She said her losses in the first 60 days were about C$500,000. The court held that representative plaintiffs owe a duty to the class as a whole, and noted that she had not opted out. The effect is that a class member with a policy that would have paid more cannot insist on a different outcome from the group settlement, unless she has left the class.

Fees and costs

Class counsel were awarded fees of C$36 million plus C$4.68 million in HST, a total of C$40.68 million. By simple arithmetic, that is about 27% of the C$150 million fund after tax, which is below the 27.5% allowed under the retainer agreement. The report says counsel worked more than 12,800 hours, with a billable value of about C$8.1 million, so the fee is roughly 3.9 times that value, a ratio the court accepted. The Class Proceedings Fund levy is about C$10.2 million. Each of the four representative plaintiffs receives C$15,000. BDO Canada is administering the claims process, which is under way.

What it means

For policyholders in the class, the settlement offers a structured process for payment but not a ruling in their favour. For insurers, the absence of a decision on the wording means that pandemic business interruption cases elsewhere may still turn on the exact policy language and on local law. For lawyers, the dispute over a 30-day versus 60-day payment shows how a single claims protocol can treat members with different policy terms the same way. The report does not tell us what the average payment will be, and with the fees, levy and expenses deducted from the fund, the net amount per policyholder will depend on how many valid claims are submitted.

Caveats

This article is based on a single trade-press report and not on court documents. It is general information, not legal advice, and class members should consult the official notice and the claims administrator for their rights and deadlines.