Baltimore-based Cordish and Circus Circus Las Vegas lost recent appeals about their COVID-19 insurance cases against their insurers. The United States’ gaming industry was at a standstill due to the 2020 Coronavirus outbreak.
Even so, federal courts have ruled severally that casinos such as Circus Circus lack a legal lawsuit to claim property damage reimbursement from various insurance carriers. The Court of Appeals for the Ninth Circuit, which is based in San Francisco, made an unexpected ruling last week that favored the American International Group Inc. (AIG) as it defended against Circus Circus casino.
The Las Vegas gaming provider sued AIG, claiming that the insurance provider should be compelled to pay it for the pandemic’s adverse impacts, including business interruptions. Even so, the federal court supported the lower court’s ruling stating that the health crisis didn’t physically harm Circus Circus casino hence not warranting financial coverage.
The Ninth Circuit stated that the district court ruled that the Las Vegas casino cannot claim that it had direct physical damage on its property according to the Policy’s terms. The gaming company alleged that the Coronavirus was on its premises, yet it didn’t identify the physical damage that the virus caused and hence resulting in its closure.
Phil Ruffin, Circus Circus casino owner, bought the Strip budget-friendly gaming brand in 2019 for $825,000,000 from MGM Resorts. The transaction ended in December, but the country’s commercial casino industry closed operations after less than three years to curb the spread of the virus.
Insurance Providers Aren’t Liable
Some casino operators have sued their coverage carriers for COVID-19 reimbursement. But insurance carriers have denied paying coverage for any damage that a gaming facility claims it incurred due to the pandemic. The courts currently rule in favor of the insurance firms.
The Cordish Company was denied property insurance damages alongside Circus Circus. The U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia, ruled against Maryland Live! Casino last week in its case against FM Global. It is the Affiliated FM Insurance Company’s subsidiary.
The federal Appeals Court ruled in the Cordish company’s lawsuit that the district court upheld justice when it ruled in favor of FM Global. It added that the court didn’t find any reversible error after reviewing the lower court’s record.
The Coronavirus Didn’t Cause Any Direct Physical Damage
It might appear like casinos are the only businesses that have dealt with different losses in COVID-19 coverage cases. But that isn’t the case. Scott Seaman and Sarah Anderson from Hinshaw & Culbertson, claim that insurance carriers have benefited from each appellate court decision about the Coronavirus coverage. The two attorneys are based in Chicago, and their firms concentrate on the insurance sector.
They stated a few days ago that things are still good for insurance firms in the pandemic litigation battle. Also, they added that the lack of direct damage and physical loss makes judges favor insurance providers in their rulings.
Court records show that there are about 240 pending federal Coronavirus property coverage appeals. Still, it is unlikely that the courts will force insurance carriers to pay casinos for losses they incurred during the Coronavirus period.
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