The Liard First Nation is taking its insurance broker to court over the Watson Lake Hotel fire.
The hotel burned to the ground in the spring of 2010 and was uninsured at the time of the fire. The insurance policy had lapsed in October 2009 because the building had been vacant for two years.
In a statement of claim filed in Yukon Supreme Court on April 22, the Liard First Nation and its development corporation are claiming that insurance broker Aon Reed Stenhouse Ltd. owes them damages because the broker failed to properly inform its client about the consequences of letting its insurance policy lapse.
The First Nation hired Aon in 2007 to help it find suitable insurance for three properties it had bought – the hotel, the Dawson Block and Dyland House.
In 2007, relying on advice from Aon, the First Nation bought a policy covering up to $250,000 wreckage value for the Watson Lake Hotel from Aviva Insurance Company.
But that policy lapsed when the building had been empty for more than two years.
The suit alleges that Aon should have known the First Nation intended to leave the building vacant until it had the chance to renovate it, and that Aon should have warned the First Nation about the consequences of allowing the insurance policy to lapse. The First Nation also claims Aon failed to properly advise it of any gaps in the coverage on the Watson Lake Hotel and should have done a better job of finding other insurance options when it realized that the policy was going to lapse.
The statement says that Aon sent two letters to the First Nation in May and October, 2009 warning it that the insurance policy would lapse at the end of October that year.
The hotel was considered an historic landmark because it was the only hotel in town when the Alaska Highway was built in 1942. It had sat empty for five years before the blaze levelled it. The First Nation purchased it with plans to renovate it and either restore it or use it as a community space.
The First Nation is suing for compensation of damages, plus interest and costs associated with bringing the case to court.
Contact Jesse Winter at