Two years after being destroyed by the McDougall Creek wildfire, Lake Okanagan Resort (LOR) is still unable to rebuild.
The resort’s frustration over the process has led to a lawsuit filed against an insurance firm over “gaps” in coverage that the resort was allegedly not told about.
According to the notice of civil claim, LOR and a related holding company, the plaintiffs, have had a “longstanding business relationship” with Western Financial Group (WFG), one of two insurance firms named as defendants.
“WFG was and ought to have been familiar with the plaintiffs’ business and insurance needs,” the claim reads.
Despite this, the resort alleges that it hasn't been able to rebuild due to a lack of insurance coverage on utilities.
“Due to the lack of water, sewage, and electrical services, LOR is unable to rebuild any buildings or facilities on the resort and the owners of the strata properties are unable to rebuild the strata buildings,” the claim notes.
It explains that WFG, along with co-defendant ABC Company, placed several insurance policies for LOR.
Those included policies for the marina and gas bar, commercial general liability, environmental impairment liability and the resort property itself. They did not, however, include a policy that covered the utilities at the resort.
LOR says WFG failed to advise them of these “potential gaps” in the coverage, which is one of multiple breaches of duties that the resort has alleged against the insurance firm.
It adds that the resort was owed “a duty of care” by the insurance firms to act in LOR's best interest, ensure coverage was sufficient and “advise the plaintiffs of situations in which the property would not have adequate coverage.”
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LOR is seeking damages representing the replacement costs of utilities, past and future loss of income, loss of value of the resort, losses arising from the fire and beach of contract.
These allegations have not been proven in court and the defendants have not yet filed a response.
The McDougall Creek wildfire and two resulting smaller fires in Kelowna and Lake Country ripped through the Central Okanagan communities in August 2023, most notably during the evening of Thursday, Aug. 17.
Nearly 200 homes were destroyed in the trio of fires, along with another 150 units at LOR.
Others have dealt with insurance issues while trying to rebuild following the destructive wildfire, which Kent Molgat covered for NowMedia last March.
