A hearing before the 9th U.S. District Court of Appeals in California for the lawsuit filed on behalf of more than 20 Minor League Baseball teams has been scheduled for Aug. 11
The teams, including the Augusta GreenJackets, want their insurance companies to cover the financial losses incurred when the league suspended the 2020 season because of COVID-19.
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The lawsuit, originally filed in July 2020 in U.S. District Court in Arizona, argues that the teams had purchased business interruption insurance to protect themselves against business losses, including for the cancellation of games.
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The complaint stated, “These ‘all risks’ policies cover the MiLB teams for business interruption in circumstances where, as here, there has been direct physical loss or damage, including, but not limited to loss of use, to the teams’ ballparks or elsewhere caused by the SARS-CoV-2 virus, the governmental response to it, or the MiLB teams’ inability to obtain players.”
The teams said their individual insurance companies are in breach of contract for refusing to pay the claims the teams filed.
Those lawsuits were dismissed in September 2020 because the contracts each team had with its individual insurance provider included an exclusion clause: “We will not pay for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”
Lawsuits demanding insurance companies cover COVID-19-related business losses are under review in numerous federal courts across the country, including one filed on behalf of Augusta University Health.
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The AU lawsuit, filed in February 2021, accuses Rhode Island-based Affiliated FM Insurance Company of acting in bad faith and breach of contract. AU is seeking $9 million dollars.
AFM filed its response in early March and cited a clause excluding coverage due to contamination from “the actual or suspected presence of any foreign substance.” The list of exclusions includes virus among the hazards.
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However, AU court documents state that AFM filed with the Georgia Department of Insurance two “Healthcare Endorsement” updates. One in 2015 said, “For the purpose of this coverage, the presence and spread of communicable disease will be considered direct physical damage and the expenses listed above will be considered expenses to repair such damage.” In the second, filed in 2016, AFM expanded this coverage again, adding it to the Core All-Risk Policy, which AU representatives said it has.
Both sides are continuing to file motions and a hearing date has not been scheduled.
Dana Lynn McIntyre is a Staff Reporter with The Augusta Press. You can reach her at dana@theaugustapress.com.
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