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Sea to Sky Gondola sues its insurance brokers for alleged negligence

The Squamish business claims brokers inadequately insured the tourist attraction
sea-to-sky
The Sea to Sky Gondola, prior to the second act of sabotage in September. (via Getty Images)

The Sea to Sky Gondola is suing its insurance brokers for alleged negligence, among other things, after claiming they “failed to procure adequate insurance” for the gondola in 2020.

The gondola’s cable was cut for a second time that year.

In a lawsuit filed on Dec. 7 in the Vancouver courts, the gondola names Marsh and McLennan Holdings (Canada) ULC, Marsh Canada Limited, Sandy Millar and Wendy McNary as defendants.

Millar and McNary are identified as insurance agents who represented Marsh and McLennan. They previously worked for Jardine Lloyd Thompson Canada Inc., which dealt with the gondola before Jardine was absorbed by Marsh and McLennan.

The gondola is suing for damages as a result of alleged negligence, breach of contract, breach of fiduciary duty and negligent misrepresentation.

The gondola alleges that the defendants “failed to procure adequate insurance for [the Sea to Sky Gondola] in 2020.”

According to the statement of claim, Millar and McNary told the gondola its insurance policy may not be renewed in January 2020.

The defendants did not procure a renewal of the policy before its expiry, forcing the gondola to obtain two short-term extensions that lasted until late January, the claim says.

Around Jan. 22, 2020, the day when the second extension would expire, the defendants allegedly said they would not be able to renew the policy, the claim reads.

“The second policy extension expired without the policy being further renewed or extended,” the gondola’s claim said. “As a result, [the Sea to Sky Gondola] was required to extend the policy on unfavourable terms while it procured a new property insurance policy for the Sea to Sky Gondola for the balance of the 2020 year.”

Kirby Brown, the general manager of the gondola, told The Chief that the tourist attraction was insured when the second sabotage occurred in 2020 and has since been working with its insurance adjuster.

“We switched brokers last year and we were successful in getting insurance coverage in place for the balance of 2020,” Brown said in an email.

In its claim, the gondola also complained that there were issues with the insurance coverage for 2019, when the gondola’s cable was cut for the first time.

The claim says that the gondola was indemnified for “only approximately 70% of the business interruption loss” that happened as a result of the first sabotage.

The gondola was insured for about $11.39 million in business interruption coverage.

In the claim, business interruption loss is described as the revenue the gondola believes it lost, because its operations were stopped for several months as a result of the 2019 act of sabotage.

The gondola alleges that its insurance brokers ought to have known its insurance coverage for business interruption was “derived with outdated financial information and outdated estimates and projections,” among other things.

As a result, the gondola will only be partially indemnified by its insurance for the loss of business it incurred as a result of the 2019 sabotage, the claim says.

Marsh and McLennan declined to comment on the matter.

Sandy Millar did not respond to an emailed request for comment by press deadline.

The Chief left voice messages with a phone number listed under the name of Wendy McNary, and reached out to a Facebook account bearing that name. There have been no responses as of press deadline.