Fifteen minor-league teams sue insurance companies over loss of revenue, blame U.S. government
Fifteen minor-league baseball teams are suing five different insurance companies over fears those insurers will reject coronavirus-related business interruption claims, according to ESPN.
The lawsuit states teams incur $2 million in expenses during the season. Those expenses are typically covered by fans, who purchase tickets, merchandise and refreshments at the ballpark.
Minor-league games have not gone off as planned due to the coronavirus, causing teams to lose out on that revenue. In order to recoup that money, the teams have — or will — file business interruption claims with their insurers.
Those teams believe the federal government is to blame for games not taking place as usual, according to the lawsuit.
"In the first few months of 2020," the suit says, "the federal government failed to recognize the severity of the pandemic and did not contain the virus." And it notes a "failure of the federal government to build an effective wall preventing the continued migration of the virus from states that were hit early to the rest of the country."
It’s unclear, however, how that argument will be used in the lawsuit. There are reportedly policy clauses between the teams and insurance companies that state the insurance companies don’t have to pay out in the case of a virus or "acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body."
ESPN contacted an attorney working with the teams who stated those clauses do not apply in this instance. The attorney did not explain why that’s the case.
While Major League Baseball and the players are still working on an agreement to restart the 2020 season, Minor League Baseball is not expected to be part of that agreement.
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