A Las Vegas casino sued an FM Global unit last week for coronavirus-related coverage, claiming that the total $ 1.18 billion limit on its property policy was applied to its losses.
Affiliated FM Insurance Co., the insurance company's middle market affiliate, denied Treasure Island LLC's property damage and business interruption claim, but said that purge coverage could be available during the $ 100,000 transfer sickness, according to the suit.
In the case Treasure Island LLC v. Affiliated FM Insurance Co. filed in the Nevada Federal Court on May 28, the casino seeks an explanatory judgment that it is required to cover coverage under several clauses of the policy.
Treasure Island, a nearly 3,000-room casino and resort, bought insurance with AFM that went into effect March 20, 201
The casino paid nearly $ 1 million in coverage for the coverage, the suit says.
One of the first COVID-19 cases in Las Vegas was reported March 11 at the Mirage Resort and Casino located next to Treasure Island, court papers say. On March 17, Nevada authorities ordered all casinos closed in an attempt to slow the spread of the virus.
“People infected with COVID-19 were present on Treasure Island before March 18, 2020. In fact, during the period January 1, 2020, to March 18, 2020, Treasure Island employees registered more than 1,500 sick days. During the same period, Treasure Island had more than 329,000 registered guests from all over the world, "the suit says.
The presence of coronaviruses caused physical losses and damage to the property, which triggered coverage under all clauses of the policy, not just the extension of communicable diseases. , which has $ 100,000 sublimit for property damage and business disruption, says the suit.
"The coverage for sublimated transmissible illnesses in place does not apply to limit any other coverage under the policy that may also apply to loss or damage as a result of or caused by contagious disease, including physical injury as a result of or caused by infectious disease away from Treasure Island Locations, "the suit says.
After the casino filed its claim with the AFM, the insurer focused discussions on the claim for transferable disease, court papers say.  An adjuster for the insurer is called Treasure Island's genes lawyer, Brad Anthony, and asked if any Treasure Island employees had tested positive for COVID-19. Anthony said he was not comfortable disclosing personal information due to privacy concerns.
The adjuster then followed up with an email stating that the casino knew of no COVID-19 cases and that there was no physical damage to the property, but that coverage is potentially available to cover redevelopment costs.
According to the AFM policy, the transmission of diseases is triggered by the "actual not suspected" presence of the disease on a covered property.
FM Global refused to comment on the suit.
Unlike many insurance companies, FM Global offers transferable sickness coverage to policyholders, with different sublimits.
More insurance and risk management news about the coronavirus crisis here .