weather icon Clear
RJ App
Vegas News, Alerts, ePaper

Circus Circus sues insurance company over rejected coronavirus claim

Updated July 7, 2020 - 1:05 pm

Lawyers for Circus Circus filed a federal lawsuit against the north Strip property’s insurance company that has refused to cover losses experienced during the coronavirus pandemic.

The complaint against AIG Specialty Insurance Company marks the second insurance dispute lodged with the courts by a property owned by billionaire Phil Ruffin.

“AIG relies on sleight-of-hand, distortions of fact and contortions of law to escape from Circus Circus’s covered claim,” Renee M. Finch, a lawyer for the property, wrote in the suit filed Thursday. “But no illusion or death-defying feat can alter the plain language of AIG’s policy and the broad all risks coverage that it provides.”

The complaint alleges that AIG sold an “all risks” insurance policy to Circus Circus and promised up to $500 million in coverage for physical loss or damage of property and up to almost $97 million in coverage for loss of business income. Circus Circus paid a $1.6 million premium for the insurance.

“The physical loss and damage caused by COVID-19 and the threat of further physical loss or damage caused by COVID-19 has had a devastating effect on Circus Circus’s business,” the complaint states.

While the property closed March 18 after an order from Gov. Steve Sisolak, the lawsuit stated that people with the virus had already been inside.

“In fact, during the period January 1, 2020, to March 18, 2020, Circus Circus employees recorded more than 1,600 sick days,” Finch wrote.

On June 19, the insurance company rejected Circus Circus’ insurance claim, the lawsuit alleged. Two months earlier, the American Property Casualty Insurance Association issued a statement that called pandemic outbreaks “uninsurable.”

Losses from the business being shuttered should have been covered because COVID-19 was not excluded under the policy, according to the suit.

In late May, another Ruffin-owned casino, Treasure Island LLC, filed a similar lawsuit against Affiliated FM Insurance Co.

“AFM refuses to show its hand and, instead, has doubled down on a calculated claims handling strategy designed to limit or altogether deny Treasure Island from the recovery it is entitled to receive under an insurance contract it has long-relied on as protection against unforeseen loss or damage and resulting loss of income,” that complaint alleged. “Undeniably, AFM chose to insure against loss caused by communicable disease, both at and away from Treasure Island’s property. AFM should be required to play its hand and cover Treasure Island’s losses.”

Contact David Ferrara at dferrara@reviewjournal.com or 702-380-1039. Follow @randompoker on Twitter.

Don't miss the big stories. Like us on Facebook.