A claim by the Mashantucket Pequot Tribal Nation in Connecticut resulted in a $2 million payout under the terms of the policy.
Mashantucket Pequot’s Insurance Claim is Qualified Success
Foxwoods Resorts, owned by the Mashantucket Pequot Tribal Nation, will be able to walk away with some money from an insurance claim, albeit not as much as originally hoped for. The casino requested to be paid up to $76 million under the “all-risk” policy of its policyholder, Factory Mutual, in relation to pandemic damages. However, a Connecticut superior court has ruled that Factory Mutual needs to only pay $2 million to the operator.
While the case seemed to stand on thin legal ground, since no other insurers agreed to pay out pandemic-related damages, or at least the vast majority of them argued back against claims vehemently, the Pequot have been able to achieve a small victory. This is at a time when, according to the Wall Street Journal, insurers have won around 200 similar cases against claimants.
Both parties’ arguments were at odds with the tribe insisting on a breach of contract, while the insurer is sticking to the contract’s clauses and arguing that “viruses and contamination” were specifically excluded from the signed policy. The only way for a business to have a chance of retrieving money not covered by communicable disease policy is to prove that their business has received physical damage, which is what most policies cover, as a direct result of the pandemic.
A Fair Ruling Based on Policy Contracts
The court was unequivocal on the terms in the contract and argued that the operator could not deny the nature of the issue, which was rooted in a virus forcing the casino to shut down, rather than the property being physically damaged by nature’s elements, for example.
The awarded $2-million payout, though, comes as part of additional communicable disease coverage that the Pequot bought when they were insuring their property. Meanwhile, the Mashantucket Pequot Tribal Nation isn’t the only tribe suing the insurer.
Another Connecticut tribe, the Mohegan Sun Casino operator Mohegan Tribal Gaming Authority, is also suing Factory Mutual. It simply claims that its pandemic-related losses have amounted to millions of dollars, with the tribe now seeking what it believes is just compensation. Originally, a hearing date was set for August 2, but no new reports have surfaced since, with the fate of Mohegan’s insurance claim unknown.
Elsewhere, other casinos are also suing insurers. Caesars Entertainment is in a legal battle against a group of insurers who refuse to pay $2 billion to the company. However, Caesars’ case is different, as the company has made $25 million in premiums towards specific policies that the operator believes explicitly cover any pandemic-related damages. The case is still ongoing and awaiting further development since Caesars brought its claim to the Nevada state court back in March.