Sports | December 7, 2020 11:32 am

Major League Baseball Sues Insurance Companies Over Unpaid Coronavirus Claims

The suit alleges the insurers refused to pay claims despite the league’s “all-risk” policy purchases

Major League Baseball Sues Insurance Companies Over Unpaid Coronavirus Claims
A general view of the Major League Baseball logo on a dugout.
Icon Sportswire via Getty Images

Major League Baseball’s 30 teams have filed a lawsuit in California against three insurance companies over massive financial losses caused by the COVID-19 pandemic.

Filed in Alameda County Superior Court in October, the breach-of-contract lawsuit alleges that AIG Specialty, Factory Mutual and Interstate Fire & Casualty have failed to pay claims that should have been covered by the league’s purchase of an “all-risk” policy, according to The Associated Press.

“Due to COVID-19, the Major League Baseball entities, including those of the 30 major league clubs, have incurred significant financial losses as a result of our inability to play games, host fans and otherwise conduct normal business operations during much of the 2020 season,” the league said in a statement to the AP. “We strongly believe these losses are covered in full by our insurance policies, and are confident that the court and jury will agree.”

MLB claims to have lost billions of dollars in revenue from lost ticket purchases, concession and merchandise sales, parking fees and other forms of revenue that were cut off from playing games with no fans in attendance. The league also lost billions in local and national advertising revenue as the season was shortened from 162 games to 60 due to the coronavirus.

In June, 15 minor league baseball teams filed a similar lawsuit against five companies over the insurers’ rejections of the teams’ coronavirus-related business interruption claims.

The lawsuit contends the teams should have been able to collect from the insurers despite policy provisions excluding losses “caused by or resulting from any virus” and “acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body.”