The company, which owns multiple professional sports teams and major sports arenas in the District of Columbia, has settled a lawsuit against an insurance company over losses related to COVID-19 shutdowns.
It was only a partial victory for Monumental Sports, owner of the Capitals, Wizards, Mystics and Capital One Arena. In March 2023, the company missed a huge opportunity and lost the case based on a key clause in the insurance contract, but has now settled the claim under a different policy clause and the parties will withdraw the lawsuit on April 4th. jointly agreed.
Monumental Sports, which is chaired by founder Ted Leonsis, said the company suffered millions of dollars in business losses under its all-risk insurance policy due to the Capitals and Wizards seasons from March 2020 to April 2021. It sued Factory Mutual Insurance Company in 2021, claiming it had the right to recover. , the Mystics and other teams were suspended, and all events at Monumental Sports' indoor arena were canceled or postponed. The sports company claimed it was entitled to pay for lost business revenue, cleanup costs and other costs related to the closure.
However, as Factory Mutual and other insurance companies have been successful in many other lawsuits, Factory Mutual was unable to provide evidence of the physical loss or damage necessary to trigger most coverage. Monumental argued that it was not entitled to any insurance proceeds.
Factory Mutual said the sports and entertainment company lacked sufficient excusable facts to show that COVID-19 appeared to have caused damage to insured property. “And for good reason: 'COVID-19 harms people, not property,'” the insurer said in court. Loss of use is not a substitute for evidence of physical damage, the insurer added.
However, the insurer acknowledged that, unlike other coverage provisions, the communicable disease provision in the insurance contract does not require physical loss or damage to trigger coverage. Instead, if “the actual presence of an infectious disease is not suspected” at the insured location, coverage will apply regardless of whether the property is damaged or destroyed by the covered cause.
In July 2021, the insurer first signaled its intention to consider payments under the infectious disease provisions up to $1 million in a letter requesting proof of loss from Monumental. Factory Mutual said in October 2021 in a motion to dismiss the lawsuit that it was still awaiting evidence. “Factory Mutual remains committed to coordinating plaintiffs' claims under the infectious disease clause,” the insurer said in court at the time.
Under the communicable disease clause, Factory Mutual will recover up to $1 million if there is an “order of a competent governmental agency'' or determination of an insured officer'' regarding the “actually suspected'' presence of a communicable disease. It is recognized that . This provision includes cleaning, removal and disposal. Public relations and reputation management costs. and certain business income losses and expenses.
In March 2023, U.S. District Judge Richard Leon granted Factory Mutual's motion to dismiss Monumental's claims for compensation for physical damage or repair and time factors. However, he found that Monumental “more plausibly swore” compensation under communicable disease coverage, and the judge did not dismiss those claims.
On April 4, the parties entered into a joint dismissal clause, telling the judge that the communicable disease clause claims had been resolved, without providing further details. As a result, the lawsuit was dismissed.
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