GULFPORT, Miss. (AP) — A Mississippi Gulf Coast casino has become one of many businesses nationwide to sue its insurer for refusing to cover business losses because of the coronavirus pandemic.
Island View Casino Resort in Gulfport contends in the federal lawsuit that its insurer owes it $10 million for business losses caused by a 65-day COVID-19 shutdown in the spring.
Gulfside Casino Partnership, Island View’s owner, is also demanding $90 million in punitive damages, attorney’s fees and interest.
The Sun Herald reports Island View says it lost $46.2 million in revenue when it was closed from March 16 until May 21 under orders from the Mississippi Gaming Commission. However, its policy only covers up to $10 million.
The lawsuit alleges breach of contract and negligence against Georgia-based Westchester Surplus Lines Insurance Co., which parceled out shares of the risk to nine other insurers.
Gulfport attorney Joe Sam Owen, who represents the partnership, said legal disputes over COVID-19 insurance claims generally have boiled down to the definition of “physical damage.”
Insurance companies argue the property must suffer actual physical damage, as it would in a hurricane, to recover losses under their policies.
But the casino says its policy specifically covers losses caused by canceled bookings, or the inability to accept bookings, caused by “a contagious or infectious disease at an insured location, as determined by a public or civil authority,” and that the loss is covered “whether or not physical damage occurs to the property.”
The cancellation coverage costs Island View an annual premium of $408,268.
An insurance adjusting firm assigned to the claim, Crawford Global Technical Services, wrote in a July letter to Island View: “As a general matter, the policies afford coverage only when there has been direct physical loss, damage or destruction. In the absence of such damage, there is not coverage.”
Pollutants and contaminants, including viruses, are listed in an underlying policy as being excluded from coverage, the letter said. It also said other policy language states that “communicable disease” is not covered.