AC Ocean Walk LLC, the owner of Atlantic City’s Ocean Casino Resort, has lost its $50m lawsuit against four insurance companies over compensation it believed it was owed from lost revenue during the COVID-19 shutdowns. The New Jersey Supreme Court ruled unanimously against Ocean Walk Wednesday, directing the original trial judge to dismiss the suit with prejudice.
“best in class” coverage
Ocean Walk bought what it called “best in class” coverage from American Guarantee and Liability Insurance Co., AIG Specialty Insurance Co., Interstate Fire & Casualty Co., and National Fire & Marine Insurance Co., the four defendants in the case. It was forced to close the casino in March 2020 because of an executive order from the governor, just as casinos around the world had to at the outset of the COVID-19 pandemic. It reopened with limited capacity on July 2, 2020, eventually revving back up to full operations.
The Supreme Court shot down Ocean Walk’s two arguments: 1) that it incurred “direct physical loss or damage” and 2) that COVID-19 is not a contaminant, as the policies had a “contaminant exclusion” that does include viruses.
Though Ocean Walk was unsuccessful in its bid for $50m, it was granted $850,000 combined from American, AIG, and Interstate Fire for business stoppages caused by a “communicable disease.”