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Casino Covid-related verdict turns in favor of Zurich, AIG, Allianz



A New Jersey appellate court overturned a lower court ruling against a casino in Atlantic City and in favor of entities from Zurich Insurance Group Ltd., American International Group Inc. and Allianz SE in coverage of covid-19-related business interruptions on Thursday.

The lawsuit was filed by Ocean Casino Resort, a 138,000-square-foot casino and gaming entertainment facility that is the largest gaming suite in the United States, according to the judgment of the Superior Court of New Jersey Appeals Division in Jersey City in AC Ocean Walk, LLC v. American Guarantee and Liability Insurance Co., AIG Specialty Insurance Co. and Interstate Fire and Casualty Co. and National Fire & Marine Insurance Co..

Earlier this week, the same court upheld seven lower court decisions that dismissed similar lawsuits.

The units in Zurich, AIG and Allianz, together with National Fire & Marine Insurance Co., a unit of the Berkshire Hathaway Group, had provided a total of $ 50 million in quota-based coverage, according to the report.

The insurers agreed to pay $ 850,000 in coverage during an “outbreak of communicable disease”

;, but otherwise refused to reimburse the casino.

The casino sued them in Atlantic City State Court. The court agreed to dismiss Berkshire Hathway based on an “approval of exclusion of biological or chemical substances” in its policy.

However, it refused to do so for the remaining defendants, stating that the phrase “direct physical loss of or damage” in its coverage was ambiguous and that “may be satisfied if the property becomes unusable for its intended purpose, whether or not the property is altered. of the covid-19 virus. ”

The trial court also concluded that the coverage’s exclusion of contamination did not preclude coverage because it was related to “traditional environmental and industrial damage.”

When it overturned the lower court, the state appellate court said, “the documentation supports the conclusion that there was no damage to equipment or property on or off the site that caused Ocean to lose its physical alteration that made the casino facility too dangerous to enter.”

While Ocean was forced to close its casino gaming floor and other businesses in accordance with the governor’s executive order, it was able to continue to operate its restaurants, bars and hotel accommodation in a limited way, as well as its online gaming services, from March 16 to July 2, 2020. .

It also said that “although the Ocean successfully engaged the covid-19 virus caused an actual or imminent physical loss or damage to the Ocean”, the coverage’s exclusion exclusion “unequivocally excludes coverage.”

Lawyers in the case had no comments or did not respond to requests for comment.


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