The Rogers outage that affected swathes of Canada on Friday is unlikely to trigger most business interruption or loss of income policies, according to the Insurance Bureau of Canada.
“Generally speaking, the vast majority of businesses would not have coverage for this type of an outage,” IBC national director of consumer & industry relations Rob de Pruis told Insurance Business.
The major provider’s internet service was down for more than 15 hours on Friday, leaving businesses and individuals without internet and phone service. Services have now been restored to most customers, according to a notice on Rogers’ website.
Interac’s bank transfer services were down during the outage, while ATMs were knocked out of service and vendors found themselves unable to take payments other than in cash.
911 calls were reportedly affected, as people struggled to get through to the emergency services.
Events were also affected, with music artist The Weeknd’s concert at the Rogers Centre in Toronto postponed on Friday due to “service outages impacting venue operations”, the venue said.
Government officials rushed to assure Canadians that the outage – which Rogers has blamed on maintenance – did not appear to be a cyberattack.
There are likely to be limited implications for the insurance industry from the incident, according to de Pruis, as the outage did not amount to physical damage preventing access to businesses.
“Generally speaking, a standard business insurance policy would not provide business interruption or loss of income coverage as a result of some type of an outage,” de Pruis said. “Typically, for a loss of business income there has to be some type of physical damage trigger, or damage to your premises that doesn’t allow you to operate, which would be the trigger.”
Some – but not all – policies may include a service interruption endorsement. However, there is no guarantee that this would be triggered by the event.
“These policies are typically also triggered by some type of physical damage – think of a big fire at a power generating station that causes an outage to a large amount of people,” de Pruis said.
“It sounds like this was more of some kind of a ‘maintenance oops’ [by] Rogers that caused the outage, so there likely would not be coverage even under this special endorsement.”
It could also be the case that businesses could have suffered a “delayed income” loss, wherein on being able to resume services people who had been unable to make purchases the previous day then bought goods, de Pruis said.
Those with specialty policies, such as in events, could be in line for a payout depending on the wording of their insurance contract. However, there are no guarantees.
“If you had a real specific big event that was happening, like a festival, or a wedding for that matter, these policies are specifically tailored for some of these interruptions,” de Pruis said.
“These policies are very customized, and very specific, and it really gets into the details as to what caused the outage, how long [the outage was for] – and […] the policies might say there has to be an outage for longer than a specific period of time [for example, 12 or 24 hours] before the policy would be triggered.”
The IBC national relations director urged businesses to check their specific policies and reach out to their broker if they did suffer an income loss that could be covered.
This is the second significant Rogers outage in 15 months, and the impact of the first incident on the industry was minor, according to the IBC – “nothing really came from that,” de Pruis said.
In response to the latest incident, Rogers president and CEO Tony Staffieri said on Saturday that the provider will automatically credit affected customers.
“We know how much our customers rely on our networks and I sincerely apologize. We’re particularly troubled that some customers could not reach emergency services and we are addressing the issue as an urgent priority,” Staffieri said.
