The tribal owners of Connecticut’s Mohegan Sun gaming property have filed a lawsuit against an insurance company after it failed to cover millions of dollars in coronavirus-related claims.
The Mohegan Tribal Gaming Authority filed the court action Friday in New London, Conn. Superior Court against Factory Mutual Insurance Co., according to the Associated Press. The insurer is headquartered in Johnston, R.I.
The lawsuit resembles one filed by the Mashantucket Pequot Tribe which operates Connecticut’s Foxwoods Resort Casino. That pending court action is seeking to cover an estimated $76 million in losses experienced at the gaming property and similar businesses.
The Mashantucket Pequot litigation was filed in February, and is also against Factory Mutual.
Foxwoods and Mohegan Sun both closed in March for about 11 weeks last year because of the pandemic. It led to lost revenue.
The policy is supposed to pay for as much as $1.655 billion in coverage per occurrence, the Mashantucket lawsuit claims. But Factory Mutual has responded the disputed claims are not covered under the casino’s insurance policy, the AP reported.
Factory Mutual wants to see the Mashantucket legal action tossed out of court, the AP adds. The issue will be addressed by state Judge Thomas Moukawsher in a scheduled Aug. 2 court hearing.
Are Virus Losses Excluded?
At question, is what is covered under an “all risk” insurance policy, The Day, a Connecticut newspaper based in New London, reported. A similar question is how “business interruption” insurance coverage is defined, and what it excludes.
Factory Mutual, like many other insurers, has argued viruses are excluded from coverage. Damage from hurricanes are more likely to be covered by such policies, many insurers have argued.
The Mashantucket case was moved from New London Superior Court to Hartford, Conn. Superior Court due to the complexity of the litigation, The Day said.
Several Casino Operators Sue Insurers
Other US casino operators have also filed lawsuits against their insurance companies related to COVID-19 claims the insurers failed to cover.
For instance, earlier this year, Caesars Entertainment sued several insurance firms. Caesars claims the insurers refused to pay out on an estimated $2 billion in losses linked to the pandemic.
The defendants in the Nevada court action include companies such as Allianz, Chubb, Aspen, and Lloyds of London. In total, Caesars named 60 insurers in the litigation, the AP said.
Also, Circus Circus owner Phil Ruffin sued the AIG insurance company on similar grounds. US District Judge Jennifer Dorsey dismissed the breach of contract case against AIG Specialty Insurance Co. But Ruffin’s attorneys were appealing the judge’s ruling, the AP said.
Ruffin’s Treasure Island additionally sued Affiliated FM Insurance Co. over disputed losses. As of earlier this year, the case was pending in Las Vegas federal court.
In an analysis of several court actions prompted by uncovered coronavirus losses, The Wall Street Journal reported earlier this year that insurance companies won some 80 percent of an estimated 200 lawsuits.
Most commercial insurance policies, including those with business interruption coverage, specifically exclude coverage for communicable diseases or viruses such as COVID-19 and have never covered viral exposures,” according to the American Property Casualty Insurance Association, which represents America’s insurance companies.
Several state legislatures, such as in New Jersey, have considered legislation to ensure that pandemic losses would be covered under business interruption polices.
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