MLB sues insurance providers, cites billions in virus losses

LeHab

Registered User
Aug 31, 2005
15,956
6,259
Major League Baseball and all 30 of its teams are suing their insurance providers, citing billions of dollars in losses during the 2020 season played almost entirely without fans due to the coronavirus pandemic.
The suit, filed in October in California Superior Court in Alameda County, was obtained Friday by The Associated Press. It says providers AIG, Factory Mutual and Interstate Fire and Casualty Company have refused to pay claims made by MLB despite the league’s “all-risk” policy purchases.
The league claims to have lost billions of dollars on unsold tickets, hundreds of millions on concessions, tens of millions on parking and millions more on suites and luxury seat licenses, in-park merchandise sales and corporate sponsorships. It also cites over a billion dollars in local and national media losses, plus tens of millions in missed income for MLB Advanced Media. It says all of those losses should be covered by their policies.

MLB sues insurance providers, cites billions in virus losses

Early analysis of the case:

Business Interruption Makes its Way to the Big Leagues – Covid Coverage Litigation Tracker
 

GindyDraws

I will not disable my Adblock, HF
Mar 13, 2014
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Indianapolis
Earlier this season, a bunch of minor league teams sued Nationwide and the case was dismissed. Granted, Major League Baseball is much larger, but I'm just pointing out something like this has already happened this year.
 

LeHab

Registered User
Aug 31, 2005
15,956
6,259
Earlier this season, a bunch of minor league teams sued Nationwide and the case was dismissed. Granted, Major League Baseball is much larger, but I'm just pointing out something like this has already happened this year.

Analysis link talks about it and how this lawsuit is different:

In fact, this complaint is not even the first by a professional sports organization nor the first baseball-related case. The Houston Rockets and Atlanta Falcons have both filed suits in Rhode Island state court, and several Minor League Baseball cases are currently pending, with one MiLB case already been resolved in favor of the insurers due to the presence of a virus exclusion in the policy at issue in that case. Despite their first win in one minor league case, insurers are still in the early innings of a long legal battle for pandemic-related losses and as one might expect, MLB came out swinging in their 66-page complaint.

As I explained in a summer blog post about the first MiLB case, the sports-related cases for business income coverage do not differ radically from cases in other industries. The central, hotly contested issue is whether Covid-19 causes “physical loss or damage” to property, but each case’s outcome depends on the specific language contained in their insurance policy. As the Tracker shows, insurers have had the upper hand in judicial rulings thus far. But most of the dismissals result from defective pleadings or the presence of strongly worded exclusions in the insurance policies at issue that specifically refer to losses from viruses that cause disease.

The MLB complaint is crafted to avoid these pitfalls. Consequently, the case has a strong chance of surviving a potential motion to dismiss the case. Assuming the case does not get dismissed, MLB will have the burden of proving that Covid-19 does indeed cause physical loss or damage to property; if so, defendant insurers are potentially on the hook for billions of dollars in coverage, unless they can prove that an exclusion or sub-limit applies.
 

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