Caesars Entertainment is suing dozens of insurers for more than $2 billion for losses connected with the Covid-19 pandemic.
In a filing with the Securities and Exchange Commission, the casino giant said it purchased broad property insurance coverage to protect against “all risk of physical loss or damage” and resulting business interruption and paid more than $25 million in premiums “to secure a top-of-the-line, all-risk policy portfolio” that provided more than $3.4 billion in coverage limits.
“However, even though the vast majority of the company’s insurance policies do not exclude loss or damage caused by a virus or pandemic, the company’s insurance carriers have refused to pay the company’s losses which are estimated to exceed $2 billion,” Caesars said.
The suit, filed in Clark County District Court in Las Vegas, attempts to recoup losses to both the company’s 15 casinos in Nevada and several of its regional properties. The company operates more than 50 casinos and racinos in 16 states, all of which were closed at various times last year as states and tribal governments ordered the shutdowns of nearly 1,000 casinos in 43 states in an effort to slow the spread of the virus.
In the lawsuit, Caesars said it hired epidemiologists and crisis management advisors to help mitigate the physical loss or damage. The company drew down $1.6 billion under its bank loans and raised $772 million in new debt to cover ongoing costs to maintain the company, it said, and also furloughed and laid off “a substantial number” of its pre-pandemic workforce and reduced salaries of management and “mission-critical” personnel.
Caesars is not the first casino operator to pursue its insurers in court over losses due to pandemic-related casino closures. Last summer, Treasure Island and Circus Circus owner Phil Ruffin and a San Diego-area tribal casino operator filed legal claims against their insurers over similar issues.
Caesars declined to comment on the suit, according to news reports, but said in the SEC filing that it hopes for “an amicable resolution” with the insurance companies.
