Mich. Casino Bets Zurich Device Must Cover $270M Virus Loss


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” href=”https://www.law360.com/insurance/articles/1360297/mich-casino-bets-zurich-unit-must-cover-270m-virus-loss#”>Shawn Rice

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Law360 (March 2, 2021, 6:19 PM EST) —
The master of engine City Casino resort moved all in with case in Michigan state court alleging its Zurich affiliate insurer owes it $270 million for COVID-19-related losings following the casino had to turn off and alter its cleaning operations.

Detroit Entertainment LLC, in a complaint in Wayne County Circuit Court on Thursday, stated the coronavirus has triggered a primary real lack of or injury to home to its casino company, triggering the possible limitations of $750 million under a property that is commercial policy issued by American Guarantee and Liability Insurance Co.

The presence of coronavirus made certain areas like the buffet and banquet hall unsafe, the casino owner said, “just as if asbestos, cat urine, ammonia, fumes or a salmonella outbreak was in the air or on surfaces.”

The owner said it paid for deep cleaning of gaming tables, slot machines, chips, dice and more that should be covered by the policy. And it lost money not only from the casino closure, but also because it had to cancel events in light of government shutdown orders.

Detroit Entertainment said about 100 employees tested positive for the virus, which spread either through the fresh atmosphere or on areas, in line with the suit. The business has let go a lot more than 1,100 workers, in line with the suit.

At a right time when it was needed, Motor City said, the insurer abandoned its obligations despite marketing its product as having higher limits with broader coverage. Instead, the Zurich unit gave the casino owner a payment that is one-time of100,000 — lower than one-tenth of just one% associated with casino‘s losses — as an element of a communicable conditions supply associated with policy.

The insurer’s primary officer that is financial George Quinn, said in a May teleconference that the majority of Zurich policies exclude losses for viruses, Detroit Entertainment noted.

“Zurich has waged a public relations campaign to discourage and deter policyholders from bringing business interruption claims,” the casino owner said.

The insurance company tried to tack on a virus exception to the policy in December 2019 after the policy was written and after the first case that is COVID-19 identified, the casino owner said.

Motor City President Bruce Dall stated in a statement that the company has implemented health and safety protocols to protect its employees and patrons.

“Thus tuesday far, our insurance carrier has failed to honor our business insurance claims, necessitating this action,” Dall said. “Our hope remains for an resolution that is amicable”Detroit Entertainment is not the casino that is first to push for pandemic coverage. Mohawk Gaming Enterprises LLC, which is behind Akwesasne Mohawk Casino Resort, is fighting its insurer Affiliated FM Insurance Co. in New York court that is federal the consequences of a virus exclusion to its protection. Affiliated can be protecting against Treasure Island LLC’s Nevada court that is federal with a contamination exclusion

.

Representatives for American Guarantee did not answer communications for remark.

Detroit Entertainment is represented by J. Michael Huget, Andrea Hansen and Adam M. Wenner of Honigman LLP and Joseph D. Jean, Scott D. Greenspan, Benjamin D. Tievsky and Janine M. Stanisz of Pillsbury Winthrop Shaw Pittman LLP.

Counsel information was not readily available for US Guarantee.

The situation is Detroit Entertainment LLC v. Us Guarantee and Liability Insurance Co., situation quantity unknown, within the Circuit Court for the County of Wayne.

–Additional reporting by Daphne Zhang and Jeff Sistrunk. Modifying by Marygrace Murphy.

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