Circus Circus Las Vegas loses COVID-19 insurance appeal

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Circus Circus Las Vegas has lost an appeal of the decision of their lawsuit against their property insurers, American International Group Inc. over COVID-19 losses and coverage.

The United State Court of Appeals for the Ninth Circuit in San Francisco ruled in favor of American International Group Inc. late last week. Circus Circus filed a lawsuit against American International on grounds that the insurer should be liable for damages from the resort casino suffering business interruptions due to the COVID-19 pandemic.

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The appeals court found in favor of the insurers and upheld a previous ruling issued by a lower level district court in Nevada. The lower level court ruled that the COVID-19 pandemic did not cause any physical harm to the casino property, so the insurer was not liable financially to Circus Circus.

In the appeal court’s ruling they stated, “The district court correctly held that Circus Circus does not plausibly allege that it suffered direct physical damage to its property under terms of the Policy. Despite Circus Circus’s allegation that the COVID-19 virus was present on its premises, it has not identified any direct physical damage to its property caused by the virus which led to the casino’s closure.”

This was not the only COVID-19 coverage-related appeal decision that favored the insurers last week. The Cordish Companies in Baltimore also appealed a similar ruling against their Maryland Live! Casino property in their lawsuit against their insurance company FM Global. A federal appeals court upheld the decision which found FM Global nor liable to pay for Maryland Live! Casino’s COVID-19 loses.

In all lawsuits between casinos and insurances companies that have been ruled on, the insurance companies have yet to lose. According to a law firm based in Chicago that specializes in insurance law the insurance industry has faced 28 lawsuits around COVID-19 coverage and all 28 lawsuits were ruled in favor of the insurers.

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