Housing charity suing insurance providers over flood coverage

Once afive-storey apartment complex, the buildingat the corner of Scott Street and AthloneAvenue in Westboronow standsempty.

The building saw extensive damage after a sprinkler system burstand released nearly 20,000 litres of water inFebruary 2023, displacing all 40 tenants.

More than a year later,the supportive housingcharity that owns the buildingsaid repairs are far from completeand blames its insurance providers.

"For nearly a year and a half, Intact Insurance has operated in bad faith, trying to bully and force us into taking millions less than we're rightfully owed,"Ottawa Salus CEO and president Mark MacAulay said.

The charity is now suing Intact along withTemple Insurance, Lloyd's and Liberty Mutualfor up to $55 million, claiming they failed tosufficiently cover rebuilding costs.

The money would be mostly for damages and restitution.

As of Wednesday, no statement of defence has been filed and none of the allegations have been tested in court.

Charity facing monthly losses

MacAulay saidthe "first sign of trouble" came when the remediation company Intact selectedfor initial repairs left the building in a worse state, creating more delays.

"It went from something that was a basic flood restoration into mould issues,"he said.

MacAulay saidto actually restore the building, Salus would need $7.5 million from its insurance providers based on an assessmentdone by independent contractors.

An assessment byIntact put the cost at $3.2 million, which Salus received, but MacAulay maintains that it's not enough to cover repairs.

"Allwe're asking for is to bring the building back to its original state and make sure that it's at code," he said.

Though the building has been vacant for more than a year, Salus said it's still carryingmortgage, insurance, and maintenance costs,plus the loss in rent, which MacAulaysaidamounts to around $45,000 a month.

According to Salus's statement of claim, the policy it took out under Intact should have covered those losses, but that policy was issued for a one-year term between July 1, 2022 to July 1, 2023.

In a statement to CBC, Intact said it hashave already provided Salus with multi-million dollar paymentsandisworking closely with the charity to come to a resolution.

MacAulay fears one won't come soon enough.

He saidSalus had hoped to rebuild in time to house vulnerablelow-income tenants by winter, but if construction on the building doesn't start within a monththat won't be possible.

"I'd like with allmy heart to provide theaffordable and supportive housing that our residents of Ottawa so desperately need," he said,"but here we are."

CBC reached out to the other three defendants.Liberty Mutual Insurance saiditdoes not publicly discuss matters in litigation,Lloyd's said it wouldn't discussmatters in litigation or individual policies, and Temple Insurance has not yet replied.