Baltimore Developer The Cordish Cos. Sues Insurer Over Pandemic Losses

The Cordish Cos., operator of Live! Casino in Hanover and entertainment centers, casinos, malls and hotels across the United States, is suing its insurer for failing to cover hundreds of millions of dollars in business losses amid pandemic closures.

The Baltimore-based developer filed a breach of contract lawsuit against Affiliated FM Insurance Co., arguing that business interruption losses associated with communicable disease are covered in its policy.

Cordish properties, such as Power Plant and Power Plant Live! in Baltimore, depend upon gatherings of large crowds, with visitors typically able to mill about from bar to restaurant in a stadium-like atmosphere, says the lawsuit, filed in Baltimore Circuit Court.

“Unlike a retail store selling a product, or a traditional restaurant selling food and beverages, the sports and entertainment businesses primary sell experiences that involve customers coming onto and moving about the premises and interacting with one another there,” the lawsuit says.

A representative from Johnston, Rhode Island-based Affiliated FM could not be reached for comment Monday morning.

Faced with the rapid spread of COVID-19, state and local governments issued orders this spring closing stores, casinos, restaurants, bars, malls and other public gathering spots. Cordish’s lawsuit says those orders prohibited access to its properties in multiple states.

Among the worst hit has been the Live! Casino in Anne Arundel County, which typically has 18 million visitors a year and generates revenue of more than $50 million a month but was completely closed, the lawsuit said.

Besides the Hanover casino, the insurance policy with Affiliated FM covers 32 other Maryland properties, part of 97 total nationwide.

The policy offers “broad coverage” with limits of $1 billion and business interruption coverage for lost profits, rental income and extra expense, the lawsuit says.

The policy, for which Cordish says it has paid nearly $2 million in premiums, covers losses incurred when a civil authority order prohibits access to a property. It also should cover losses caused by the loss or damage to a nearby property that attracts business to one of the Cordish developments, the lawsuit argues.

Entertainment venues such as Texas Live! in Arlington, Texas; Kansas City Live! in Kansas City and Ballpark Village in St. Louis have been hurt by the closures of nearby sports venues that bring business to the entertainment centers, the court filing says.

In addition, Cordish also operates dozens of retail strip centers, where stores have lost sales and been unable to pay rent.

The lawsuit, which seeks a jury trial, argues that the policy covers the time period required for business to return to normal.

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