YES and No: New York’s Yankees Network Sues Insurer to Recover COVID Losses

May 23, 2022
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Yankees Entertainment and Sports Network (YES), the broadcasting company for the New York Yankees, New York Nets and other area sports teams, is suing its insurer, Hartford Fire Insurance Co., for denying its claims for business losses that it maintains were caused by COVID-19 restrictions, shutdowns and cancellations of games and events.

YES does not quantify its losses in its complaint except to say it has suffered “millions of dollars” in losses. It indicates it is due the policy limit of business income coverage up to $419,727,636 plus additional damages.

YES claims that its business losses should be covered under its “all risk” policy from Hartford Fire. The entertainment firm claims the virus caused direct physical loss for damage to properties throughout the locales where it operates by altering the physical conditions of the properties so that they were no longer safe to be used.

Specifically, the firm claims that the virus attaches itself to surfaces and properties, thereby producing physical change in the condition of the surfaces and properties “from safe and touchable to unsafe and deadly.”

Hartford denied YES’s losses, noting that the policy requires “direct physical loss or damage” to the insured’s property . The insurer determined that there was no “direct physical loss or damage” to property at any of the insured premises. The insurer also cited a policy exclusion for loss or damage “caused by or resulting from any virus” as also precluding coverage to justify its denial.

YES maintains that Hartford is estopped from relying on any virus exclusion based on regulatory representations in 2006 that the exclusion was not a reduction in existing coverage.

The Hartford is asking that the case be dismissed or, if not dismissed, moved to the federal court in New York from the federal court in Delaware where it now sits. Hartford Fire argues that the case should be transferred to the Southern District of New York in the “interest of justice” and convenience for the parties and witnesses. “The center of gravity of this insurance coverage dispute is plainly New York,” Hartford Fire told the court in its filing. Hartford Fire said New York is where YES has its principal place of business and where five of the seven Insured premises are located. Also, the insurance policy covers properties entirely outside of Delaware.

The “only thing connecting this dispute to Delaware” is that YES is a limited liability company under Delaware law but that single contact does not create jurisdiction over Hartford Fire in this action, according the insurer. YES had originally filed the complaint in Delaware state court but Hartford had it moved to Delaware federal court and now wants it moved out of Delaware.

Insurers have a winning record in COVID-19 business cases. According to an analysis on by Hinshaw & Culbertson law firm, at the trial court level, insurers have prevailed in more than 78 percent of the 194 rulings on motions to dismiss in state courts and in more than 95 percent of the 598 rulings by federal courts. Also, insurers have won, on the merits, in every appellate court decision in both federal and state court.

Topics Lawsuits Carriers COVID-19 Profit Loss New York

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