Caesars Sues Insurance Carriers Over Covid-19 Business Losses

Nevada-based Caesars Entertainment has sued a conglomeration of insurance companies and underwriters over denied claims worth $2 billion due to the loss of casino-related revenue due to the COVID-19 pandemic.

The lawsuit, filed in Nevada’s Clark County District Court on March 19, alleges that the carriers violated the terms of the policies under which Caesars properties have been insured nationwide. In a Securities and Exchange Commission (SEC) filing, Caesars has declared that it spent more than $25 million in premiums alon
e during 2020 in purchasing “all risk” policies for its more than 50 venues nationwide.

Under the terms of these policies, Caesars has declared, the company is covered for any and all risks except those “explicitly limited or excluded by the terms of the policy.” The lawsuit declares, “This is the broadest form of first-party insurance coverage available in the marketplace and, importantly for this case, the policies at issue do not exclude loss or damage caused by a virus or pandemic conditions.”

The lawsuit is not the first such effort by a casino-entertainment corporation to recoup losses attributable to the coronavirus outbreak. Last year, Treasure Island and Circus Circus owner Bruce Ruffin sued its primary insurance provider, AIG, over $500 million in Covid-related losses. However, that lawsuit was dismissed in February.

Pandemic-related losses would bring a massive hit to the US’ insurance industry, if it was indeed forced to pay out claims associated with these “all risk” policies. To date, the industry has presented a unified front in declaring all Covid-related loss claims to be invalid. The potential losses due to the pandemic led one prominent insurance industry group to declare last year that the pandemic was an “uninsurable” situation, while floating the unlikely idea of a federal bailout for such claims.