Defence + Indemnity
April 2020
An Ontario court held
that under an all-risk policy the "physical damage"
requirement for coverage may be met by a loss of use, which may
have some application for COVID-19 business interruption
claims.
MDS Inc. v. Factory Mutual Insurance Company (FM
Global), 2020 ONSC 1924, per J. Wilson, J.
Facts + Issues
The Plaintiffs MDS Inc.
et al (MDS) purchased radioisotopes from Atomic Energy of Canada
Limited's Nuclear Research Universal Reactor (NRU), which MDS
then processed and sold for use in medical products. In 2009, the
Plaintiff's nuclear facility experienced a leak of heavy water
containing radioactive material. The facility was proactively shut
down, without a government order, but was later ordered to be shut
down by the regulator. The shut-down, originally estimated to last
36 hours, ended up lasting 15 months and the Plaintiff incurred
loss of profits in the amount of $121,248,000.
