Minor League Baseball Teams Sue Insurers for Coronavirus Business Income Losses

By | June 24, 2020

Fifteen U.S. minor league baseball teams on Tuesday sued several insurers for not paying out claims for business interruption losses after the cancellation of “much or all” of the league’s season as a result of the coronavirus pandemic, according to a lawsuit.

The cancellation is a “catastrophic loss” for the teams, which include the Chattanooga Lookouts in Tennessee, the Fort Wayne TinCaps in Indiana and the Amarillo Sod Poodles in Texas, the teams said in a lawsuit filed in a Pennsylvania federal court.

They dispute insurers’ claims that their losses are not covered by their policies.

The cancellation of minor league baseball games is the latest example of how the pandemic is upending global sports events.

Novak Djokovic, the men’s world No. 1 tennis player, tested positive for COVID-19 earlier on Tuesday and then apologized to all individuals who contracted the virus after playing in an exhibition tournament he organized in Serbia and Croatia.

Global insurers have begun rejecting claims from all sorts of businesses affected by the coronavirus crisis, such as restaurants, hotels and retail stores. Insurers say the policies only apply when actual physical property damage prevents a business from operating.

The minor league teams’ suit alleges that the presence of the coronavirus has caused such damage and that exclusions in some coverage for viruses and bacteria are unenforceable.

Insurers named in the suit include Philadelphia Indemnity Insurance Co, a Tokio Marine Holdings Inc unit, as well as units of Nationwide and W.R. Berkley Corp.

“We have implemented a process to address and assess Coronavirus related claims and we will evaluate any reported claim based on the relevant facts and individual merits of the claim,” a Nationwide spokesman said in a statement. Viruses are excluded from standard policies issued to business owners, the spokesman said.

A Philadelphia Indemnity representative did not respond to a request for comment. A W.R. Berkley spokeswoman declined to comment.

Minor league teams incur more than $2 million in expenses to operate regardless of whether their businesses are running, the lawsuit said. Expenses include rent, marketing and merchandise.

(Reporting by Suzanne Barlyn in Washington Crossing, Pennsylvania; Editing by Leslie Adler and Christopher Cushing)

The case is Chattanooga Professional Baseball, LLC, et al. v. Philadelphia Indemnity Insurance Co., et al. and the case number is 2:20-cv-03032 in the United States District Court Eastern District of Pennsylvania.

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