Major League Baseball (MLB) is refusing to strikeout in one of the latest high-profile lawsuits arising out of denied coronavirus insurance claims.
The MLB, the baseball commissioner's office, MLB's digital and streaming services, MLB Network, Tickets.com and all thirty teams collectively sued their insurers on October 16th, claiming that MLB purchased top-of-the-line All-Risks policies to protect baseball against the risk of catastrophic economic losses it now faces due to the pandemic.
The suit alleges that MLB and other plaintiffs paid millions of dollars in premiums each year to AIG, Factory Mutual and Interstate Fire and Casualty Company for broad protective coverage and that the insurers publicly refused to follow through with their end of the contractual agreement. The suit cites fans as the core of baseball's revenue, and claims that nationwide pandemic restrictions forced baseball clubs to cancel games, and prohibited the majority of that fan core from filling the stands.
Among the financial damages cited in the suit are losses from unsold tickets, concessions, parking, suites and luxury seat licenses, in-park merchandise sales and corporate sponsorships, local and national media losses, plus tens of millions in missed income for MLB Advanced Media, amounting to billions of dollars in losses. MLB Commissioner Rob Manfred claimed in October that the coronavirus-related limitations imposed on the league have caused at least $3 billion in operating losses for MLB teams in 2020, CBS Sports reported.
In a statement to the Associated Press, the league said it "strongly believes these losses are covered in full by our insurance policies and are confident that the court and jury will agree."
Although the MLB still played a sixty-game season beginning in July, each team normally plays 162 games ranging from March to October, plus a postseason.
Editor's Note: Although the insurance industry team has seen some individual professional teams suing insurers, this is the first instance of an entire professional sports organization suing a myriad of insurers in response to coverage denials after a stunted season due to COVID-19 and pandemic restrictions prohibiting teams from hosting games with fans in attendance. At least one lawsuit filed by a minor league team, the Chattanooga Lookouts, has been dismissed due to a virus exclusion. Despite this, the MLB's lawsuit says "The presence of the coronavirus and COVID-19, including but not limited to coronavirus droplets or nuclei on solid surfaces and in the air at insured property, has caused and will continue to cause direct physical damage to physical property and ambient air at the premises."
This will be an interesting case to follow as any decision will either spark or discourage similar suits from other sports teams and professional sports organizations in the future.