All eyes on the case
The New Jersey Supreme Court will decide if Ocean Casino Resort is entitled to insurance payouts for COVID-19 pandemic-related losses. The casino had $50m worth of business interruption insurance in advance of the pandemic.
insurers claim that the Atlantic City property did not suffer direct damage or physical loss
Three insurers claim that the Atlantic City property did not suffer direct damage or physical loss as a result of the virus. The high court will hear arguments from Interstate Fire & Casualty Co., American Guarantee & Liability Insurance Co. and AIG Specialty Insurance Co. on Wednesday.
The case could have a significant knock-on impact on pandemic-related loss coverage all across the US. Similar action is taking place in other states, involving businesses like hotel groups, movie theaters, and real estate firms.
Key battles
The insurers tried to dismiss the case when Ocean Casino Resort sued them. They were unsuccessful with the initial attempt and then an appeals court sided with the trio.
The casino has said that the Supreme Court’s decision will “provide needed clarity to hundreds of thousands of affected New Jersey policyholders and their insurers regarding the scope of coverage” for pandemic losses.
if insurers are able to legally restrict coverage for pandemic losses
Some of the key questions that the Supreme Court will answer include if the pandemic physically damaged insured property sufficiently to allege direct physical loss or damage, as well as if insurers are able to legally restrict coverage for pandemic losses by mentioning viruses in contamination or pollution exclusions.
Bouncing back
New Jersey casinos had to close between March and early July in 2020 due to the pandemic. Ocean Casino Resort wanted payouts relating to losses it incurred during that period. It claims that the presence of COVID-19 at the property “rendered physical property within the premises damaged, unusable, uninhabitable, unfit for its intended function, dangerous, and unsafe.”
Despite the struggles during the COVID-19 period, the casino has bounced back strongly. It was the second-most profitable property in the state for the first six months of 2023. It will also garner a lot of attention by hosting a charity blackjack fundraiser for Jay-Z on Saturday, which will attract some of the biggest celebrities in the world.