Caesars Entertainment sued a group of insurance carriers, accusing them of declining to cover more than $2 billion in estimated losses the company incurred because of the COVD-19 pandemic.
In the lawsuit, the casino and hotel company alleges that it had purchased property insurance coverage to protect against “all risk of physical loss or damage” and resulting business interruption. Most of the policies don’t exclude loss or damage caused by a virus or pandemic, Caesars said in the lawsuit filed in the 8th Judicial District Court of Clark County, Nev.
Caesars said it has paid more than $25 million in premiums to secure the all-risk policy portfolio providing more than $3.4 billion in coverage limits. The company reported losses of $1.76 billion in 2020.
Companies have been suing their insurers over pandemic-related damages, but insurers are on the winning side. Of the more than 200 rulings in suits pitting businesses against insurers, more than 80% have been in favor of insurers, according to a COVID-19 litigation-tracking effort at the University of Pennsylvania Carey Law School.
Caesars shut down its properties in March 2020 as COVID-19 lockdowns began. It was the start of what chief executive Thomas Reeg would later call “the most challenging year that we’ve had operationally and personally to date.” Its properties now operate with local restrictions.
Millions of businesses across the U.S. have “business interruption” insurance. But insurers have largely refused to pay claims under that coverage, citing a standard requirement for physical damage.