Spark Insurance
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    604 699 2259
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    Suite 1275 Two Bentall Centre
    555 Burrard Street Vancouver
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CLAIM SCENARIOS


Insurance for small business is often best understood by looking at examples of claims that have been paid by each type of coverage. Spark Insurance helps Canadian small businesses collect thousands of dollars when the worst happens.

Please note coverage scenarios are for reference only. For full details of coverage, including any conditions and limitations, please read the policy wordings.

Wrongful Dismissal

Student Association – Former McMaster Association of Part-time Students (MAPS) executive director Sam Minniti filed a $500,000 lawsuit against MAPS (his former employer), five former MAPS student directors and McMaster University for wrongful dismissal. Claim included damages for wrongful dismissal and breach of contract/unpaid wages in the amount of $225,000; mental distress, aggravated and punitive damages in the amount of $100,000, damages for expenses incurred by the Plaintiff in finding other employment; additional interest and other costs.

Event Safety Planning

Nonprofit Event – A nonprofit is sued by a spectator at a holiday parade after one of the NPO volunteer performers tossed a free gift into the viewing crowd, injuring the plaintiff.

The bodily injury damages were covered by the CGL. Additionally,  the plaintiff alleged inadequate safety protocol and training procedures and sued for financial damages of $200,000. The Directors and Officers policy paid for defense costs and out of court settlement.

Duty to Organization

Community Association – A nonprofit is sued by a group of its members on the grounds that the directors and officers failed to exercise an option to extend the rent-free lease of a space used by many community groups and clubs. As a result of this omission, the city required the nonprofit to either purchase the building or to lease under a newly structured agreement with financial implications for members.

Medical Expenses

Newspaper – Two people filed lawsuits in 2012 looking to recoup medical expenses and other costs they racked up after run-ins with poorly maintained newspaper racks on campus.”The newspaper stand was negligently owned, maintained, managed and operated” was the claimant statement. Plaintiff suffered severe injuries that caused him to lose wages. Plaintiff requires future surgery and has lost future earning capacity as a result of the injuries.

Bodily Injury

Summer Festival – As part of its festival each year, a Toronto based nonprofit holds an outdoor concert. The festival grounds include picnic tables set up by the festival organizing committee. In an effort to find a better view, teenagers began standing on one of the tables. The wooden top gave way near the edge and one teen suffered a broken arm.

The teenager sued the nonprofit for not checking the condition of the tables nor indicating standing on them was prohibited. The Bodily Injury portion of the CGL policy responded to cover defense costs and award settlement for lost wages.

Employment Dispute

An employee is let go after showing up late on a regular basis and missing several important meetings. She commences a wrongful dismissal action, alleging discrimination. With legal expense insurance, an employment lawyer will be assigned to the case and cover all legal costs to defend the organization from the first dollar spent.

Landlord Inaction

The head office for a small business has a plumbing issue which is causing damage to office equipment and ability of staff to work on the premise. Despite repeated promises made by the landlord, no repairs have been undertaken within the time stipulated by the lease agreement. With legal expense insurance a lawyer will be assigned and all legal costs covered to pursue legal action for repairs to be done.

Tax Protection

A nonprofit faces a tax audit when the CRA alleges they improperly filed taxes for several years. The former volunteer treasurer cannot be contacted. With legal expense insurance a tax lawyer and/or tax account will be assigned and legal costs related to the audit will be covered.

Libel

Community Newspaper – Katz v. Uniter.

Winnipeg Mayor Sam Katz filed a lawsuit against the University of Winnipeg, The Uniter (Campus and Community Newspaper), and student writer Josh Benoit.

In court documents, Katz claims an editorial written by Benoit that appeared in the print edition of The Uniter on December 4, 2013, states that Katz “is a criminal, has committed criminal acts pertaining to insider trading, belongs in jail, and is evil.”  Katz is suing for damages to be determined by the courts and legal costs.

In a statement, the University of Winnipeg said it is erroneously included in the lawsuit and that it has no control over the student newspaper’s actions, editorial content, reporters or editorial board.

Managing Conflict

Roger McConchie, an Internet and Libel lawyer, says most Internet libel cases in which damages are awarded are those in which the person responsible for the offensive material refuses to remove it once whey are warned that it may be defamatory. Even if they got into legal trouble over a blog entry or social media posting, most amateur internet authors can avoid a full-blown court case with some common sense and willingness to compromise.

Fire

A fire starts in a mechanical room in the same building where a small business office is located. Days later, despite the office being mostly unscathed, the city and landlord prohibits access as a safety precaution. As a result, the business cannot access their offices for several weeks while authorities investigate and the restoration company works through the site. Extra Expense coverage is enacted to support the business while they do not have access to their office.

Water Damage

Arts Club – A nonprofit arts club has many costumes stored in a local community centre. A pipe burst and leaked through the ceiling and into the storage room damaging the costumes. The nonprofit was able to make an insurance claim and the costumes were either cleaned and saved or replaced by the insurer.

Theft

A nonprofit orchestra had their double bass, orchestra bell, and piccolo stolen from a storage room at a local church. The insurance policy paid to replace the missing instruments as well as sheet music in a pocket on the case.

Chaperone

A volunteer accompanied a youth group on a day skiing trip to a local mountain. While skiing she fell and injured her arm. She was unable to work as a result of the injury and claimed under the Weekly Accident Indemnity portion of the policy. This paid a weekly amount to her while she was off work. 

Set the Stage

A volunteer was working on the set of a community theatre production. While building the set a piece of wood slipped and hit him in the face, causing a broken jaw. The volunteer was paid by the insurance policy as a result of his injuries.

Beer Garden

A nonprofit hosts a beer garden at a local park for a summer jazz and chili festival. A patron who spent several hours at the event crashed his car later in the evening into the front yard of a neighbouring house. The individual was found to have been intoxicated at the time of the incident. 

The homeowner sued the nonprofit for negligence causing property damage and mental anguish.  The host liquor umbrella insurance coverage responded to pay for legal fees and damages. 

Wine Tasting

A nonprofit hosted many community members for a wine tasting and social. The event took place at a local community centre where the nonprofit had secured a liquor license. An intoxicated attendee tripped and fell into a person causing them to fall and break their arm.

The nonprofit was sued for bodily injury damages and lost wages as a result of over-serving the patron who tripped. 

Personal Records

A woman purchased a used computer from a nonprofit swap meet. The computer still contained the donor information including credit card numbers of many local philanthropists.

The policy paid for crisis management to create a plan, understand the exposure, implement a mediation and public relations strategy.

Website

A business had its website hacked and the home page filled with racist rhetoric.

The policy paid for expenses to find and mitigate the breach.

Liquor – Nonprofit Crime Dishonesty Claim

An volunteer was tasked with ordering alcohol for various events. When another volunteer looked into the invoices, questions were raised over the amounts of alcohol being ordered and the fraud was discovered. Over a two year period the volunteer had ordered and invoiced alcohol which was being kept for herself. The policy responded to pay for the expenditures.

Overtime – Crime Dishonesty Claim

A community centre manager had been billing excessive overtime hours to which he was not entitled. The fraud came to light after a new manager would not approve further overtime. The employee subsequently resigned and made a claim for unpaid overtime. In attempting to reconcile the employee’s time sheets against payments, the community centre discovered discrepancies that resulted in significant overpayments.