Wynn Resorts is seeking compensation for losses incurred from operating disruptions caused by COVID-19. But its insurer is refusing to pay.
The Encore and Wynn Las Vegas owner and operator brought a lawsuit last June against Factory Mutual Insurance Co. on grounds that it’s entitled to compensation stemming from the pandemic. Factory Mutual disagrees, and has refused to pay Wynn Resorts damages.
Factory Mutual asked the Nevada District Court to dismiss Wynn’s lawsuit on allegations that the casino company’s litigation includes “excessive use of evidentiary footnotes.” Defendant attorneys argued that federal Rule 8 requires that “each allegation must be simple, concise, and direct.”
US District Court Judge Andrew Gordon rejected the motion for dismissal with no comment. The federal judge simply signed an order dated January 11 denying Rhode Island-based Factory Mutual’s motion to dismiss.
Casinos have labored with little success to battle their insurance carriers to provide compensation for damages caused by the coronavirus. The insurance groups claim that the pandemic didn’t result in physical damage to their resorts, which therefore doesn’t warrant compensation.
Wynn Resorts argues COVID-19 is not unlike a hurricane or tornado that ravages a coastal casino. The Las Vegas Strip casino operator contends that COVID-19 had a physical presence inside its casinos, and led to the company suffering an estimated $595 million in direct damages.
Wynn Resorts incurred substantial property and financial losses caused by the prevalence of COVID-19 at its own and other nearby premises, which rendered these properties unfit for their ordinary use, and required the imposition of various closures, capacity limits, and other restrictions on their normal operations,” Wynn’s suit asserts.
To insure against pandemics, Wynn Resorts says it purchased “all risks” commercial property insurance policies from Factory Mutual. The casino claims its coverages provide $2.25 billion worth of broad protection against “all risks of physical loss or damage.”
Wynn Resorts concludes in its complaint that Factory Mutual “has turned its back on Wynn Resorts and refused to pay even a single penny of the substantial insurance to which Wynn Resorts is entitled under the Policies.”
‘Communicable Disease’ Disbursements
Wynn Resorts isn’t alone in not receiving COVID-19 money from its insurance carrier. Numerous other casinos — both tribal and commercial — have brought lawsuits against their insurers after not receiving compensation for business disruptions caused by the pandemic.
A Connecticut court ruled last August that Foxwoods is entitled to only $2 million of its $1.6 billion insurance policy. That policy is also with Factory Mutual.
Factory Mutual attorneys are seeking a similar outcome in Nevada with Wynn Resorts. The insurance group says Wynn is only entitled to on-site “communicable disease” coverage. For Wynn Resorts’ policies, that provides up to $1 million in compensation.
“Factory Mutual has instead made a calculated bad faith effort to dodge its contractual obligations by improperly directing Wynn Resorts’ insurance claim into, at most, a claim made under a $1 million sub-limit for on-site ‘communicable disease’ coverage. In doing so, Factory Mutual has not only misrepresented the express language of the Policies to Wynn Resorts, but has remarkably even gone so far as to make objectively false factual assertions regarding Wynn Resorts’ claim, including baselessly contending that ‘COVID-19 was not actually present at a location owned, leased or rented by Wynn Resorts.’”
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