The Covid-related insurance coverage dispute between the Las Vegas Strip casino Treasure Island and its insurer Affiliated FM Insurance Co. (AFM) will head to trial following a March 29 ruling from U.S. District Judge James Mahan.
The crux of the dispute centers around the casino’s claim that it suffered physical loss and damage from the virus and was therefore entitled to coverage, which AFM has denied since Treasure Island made its initial claim March 19, 2020.
In his ruling, Mahan asserted that the casino did in fact present “sufficient evidence from which a jury could find that it did in fact suffer physical loss and damage.”
Mahan sided with Treasure Island’s argument that the policy was contradictory in that it included coverage for costs related to the removal of “communicable disease,” but also sweeping exclusions for “contamination” of the insured property.
He cited a 2011 case which held that “vague or ambiguous” provisions should be held against the insurer.
AFM, which had unsuccessfully requested for the case to be dismissed since it was first filed in June 2020, did score one victory from the recent ruling, in that Mahan agreed that the insurer did not breach the Nevada Unfair Claims Practices Act or act in bad faith.
No trial date has been set, but the casino is seeking the full $1.18 billion in coverage limits it had on its policy.
The case is one of several that have been filed by both commercial and tribal casinos against their insurers since the virus first broke, but it is the first to successfully move forward.
In January, the New Jersey Supreme Court ruled against Ocean Casino Resort in a very similar dispute regarding physical damage from the pandemic.
In a unanimous decision, the judges there said that the casino did sustain a loss of business from the virus, but the property itself was not damaged in such a way to render it unusable, and therefore its claim was not warranted.
