MLB sues insurance providers, cites billions in virus losses

Major League Baseball and all 30 of its teams sue their insurance companies, citing billions of dollars in losses during the 2020 season, played almost entirely without fans due to the coronavirus pandemic.

The lawsuit, filed in October at California Superior Court in Alameda County, was obtained Friday by The Associated Press, saying providers AIG, Factory Mutual and Interstate Fire and Casualty Company have refused to pay MLB claims despite the ‘all-risk ‘of the competition. purchasing policy.

The league claims to have lost billions of dollars in unsold tickets, hundreds of millions in concessions, tens of millions in parking lots and millions more in suites and luxury seat permits, sales of merchandise in the park and corporate sponsorship. It also cites more than a billion dollars in local and national media losses, plus tens of millions in lost revenue for MLB Advanced Media. It says all those losses should be covered by their policies.

MLB stopped spring practice and postponed the start of the regular season in March, then began a shortened schedule in late July that banned fans from entering stadiums. Teams were limited to 60 games in the regular season, against 162.

Most postseason games were played without fans, although there was a limited capacity of about 11,000 per game for the National League Championship Series and World Series in Arlington, Texas.

“Thanks to COVID-19, the Major League Baseball entities, including those of the 30 Major League clubs, have suffered significant financial losses due to our inability to play games, host fans, and otherwise conduct normal business for a long period of time. part of the 2020 season, “the league said in a statement to the AP.” We are confident that these losses are fully covered by our insurance policies and are confident the court and jury will agree. “

Messages asking for comment were not immediately returned by the insurance companies.

According to data from the University of Pennsylvania Carey Law School, more than 1,400 lawsuits have been filed against insurance companies in connection with business interruption claims related to the pandemic. That includes several similar suits from minor league baseball teams, whose season was completely wiped out when baseball commissioner Rob Manfred canceled it.

At least one of those minor league cases, filed in Arizona and led by the Chattanooga Lookouts, has already been dismissed due to a virus exclusion policy.

In many cases, insurers have insisted that financial losses caused by the coronavirus are not physical loss or property damage. MLB claims the virus led to both.

“The presence of the coronavirus and COVID-19, including but not limited to coronavirus droplets or cores on solid surfaces and in the air at insured properties, has and will continue to cause direct physical damage to physical properties and ambient air on the property. , “Says the suit.” Coronavirus, a physical substance, has attached and adhered to plaintiffs’ properties, thereby altering that property. Such a presence has also directly resulted in the loss of use of those facilities. “

Many teams have fired front office workers in response to the pandemic, and many are predicting a slow low season for free agency players. Several clubs have already let go of high-level players to save money, including when the Cleveland Indians declined a $ 10 million club option on triple All-Star Brad Hand and the Chicago Cubs were unable to offer a contract to popular slugger Kyle Schwarber, making the World Series Champion 2016 could become a free agent.

MLB has not said whether the 2021 spring practice or the season will start on time.