The Chickasaw and Choctaw nations recently filed separate lawsuits against several insurance companies seeking declaratory judgements that financial losses to their casinos and other businesses caused by the coronavirus are covered by their business interruption insurance policies.
Attorney Michael Burrage, who filed the lawsuits on behalf of the tribes, said so far the insurance companies have not denied coverage for the losses. However, Burrage said coverage has been denied in Louisiana and other locations.
The Chickasaw, Choctaw and other Oklahoma tribes temporarily closed their casinos in response to the coronavirus. Financial losses from the casino closures, as well as hotels, travel plazas and other businesses, have yet to be determined, officials said.
Burrage said insurance companies have denied claims on the basis of lack of physical damage to properties. “But the property has been damaged by the virus and the pandemic because it cannot be used for its intended purpose,” Burrage said.
He added insurance policies include provisions that cover business interruptions by civil authority. He explained, “On the civil side we have the emergency orders, the Centers for Disease Control orders and that sort of stuff that would make it impossible to use as a casino.”
The lawsuits state, “As a result of this pandemic and infection, the Nation’s property sustained direct physical loss or damage and will continue to sustain direct physical loss or damage covered by the policies, including but not limited to business interruption, extra expense, interruption by civil authority, limitations on ingress and egress and expenses to reduce loss.”
Burrage said following a major disaster, it is not uncommon for policyholders to file lawsuits seeking judicial declarations that certain types of losses are covered; at the same time, insurers file lawsuits seeking declarations that those particular losses are not covered.
The suit names insurance marketplace Lloyd’s of London, as well as units of American International Group Inc and AXA XL, among others.
