The Houston Rockets basketball organization and its location Toyota Center sued FM Global's Intermediate Market Unit on Wednesday to seek business interruption coverage for coronavirus-related losses.
In costume, Clutch City Sports & Entertainment LP (d / b / a Toyota Center) and Rocket Ball Ltd. v. Affiliated FM Insurance Co. ., filed in the state court in Providence, Rhode Island, where FM Global is based, the team and the site said the insurer erroneously denied their claim last month.
According to the suit, the Rockets and Toyota Center, which hosts concerts and other shows in addition to National Basketball Association games, purchased an "all risk" insurance from Affiliated FM that provides $ 41
The organizations paid $ 719,490 in premiums for the coverage, which went into effect on October 6, 2019, court documents say.  The Toyota Center attracted nearly 1.3 million people to events in 2019 but has attracted only 340,000 by 2020 due to the forced closure of the arena during the COVID-19 pandemic, the courts say.
City and state officials issued various orders in March imposed restrictions on companies in Houston and issued additional orders in June following an increase in COVID-19 cases in the state.
The premises and the rockets claim in a suit that the presence of COVID-19 in the Toyota Center constitutes physical damage that triggers coverage for lost revenue according to various clauses in its policy, including business interruptions, extra expenses, attraction and transferable sickness coverage, according to the suit.
The communicable disease sublimates "is not considered to reduce other coverages available under the policy. They are additives," according to the suit.
FM Global did not immediately respond to a request for comment.
The suit is one of the point suits submitted by companies across the country. Most suits are pending, but judges in Michigan and New York ruled in two cases for insurance companies.
More insurance and risk management news about the coronavirus crisis here .