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Law360 (November 10, 2020, 11:34 PM EST ) A group of companies that operate a minor league baseball team and stadium sued the Cincinnati Insurance Co. in Pennsylvania federal court Tuesday, alleging the insurer's failure to cover them for COVID-19-related losses is a violation of their "all-risk" policy, which contains a pollutants exclusion but not a virus exclusion.
Washington Frontier League Baseball LLC, Sports/Facility LLC and other companies connected to the Washington Wild Things franchise allege Cincinnati Insurance is contractually bound to cover their losses, since government orders shut down their operations in March due to the coronavirus pandemic.
Although the suit does not specifically name the minor league team or explain each companies' exact duties or functions, it says they are all connected to operating a minor league team at One Washington Federal Way in Washington, Pennsylvania, which is home to the Washington Wild Things and Wild Things Park.
According to the suit — which appears to involve companies that operate the team, stadium and even the concessions at the park — the plaintiffs purchased a policy with Cincinnati Insurance that is effective from Jan. 24, 2020, through Jan. 24, 2021.
When the COVID-19 pandemic started in March, their operations were forced to cease by several government actions, including a series of orders from Pennsylvania Gov. Tom Wolf that closed all sporting facilities, according to the suit. Other government actions mentioned in the suit include orders from Washington County and the governor amended in October to allow outdoor stadiums with a capacities of between 2,000 and 10,000 people to operate at 20% capacity.
The orders resulted in a "substantial loss of income" and the companies said they submitted a property loss notice to Cincinnati Insurance in May. The insurer refused to pay the claim in a letter dated Sept. 17 on the basis that the covered property did not suffer a direct physical loss to the property, according to the suit.
Among the companies' arguments is that they should be covered under the policy's "civil authority" provision for losses incurred "by action of civil authority that prohibits access to the premises." The policy also does not contain a virus exclusion, and COVID-19 "is not a pollutant as defined in the policy," the companies claim.
The suit seeks among other things a declaration that Cincinnati Insurance is required to cover the companies' losses connected to the loss of business related to the pandemic.
"We respect the rights of all parties to have their issues heard and resolved in a court of law," Cincinnati Insurance said in a statement. "For that reason, we do not comment on pending litigation. Cincinnati Insurance remains committed to doing our part to support the families and businesses in our agents' communities, helping them to proactively manage risks and promptly paying covered claims."
Counsel for the plaintiffs did not immediately respond to requests for comment.
The companies are represented by Ryan James of Tucker Arensberg PC.
Counsel information for Cincinnati Insurance was not immediately available.
The case is Sports/Facility LLC v. the Cincinnati Insurance Co. et al., case number 2:05-mc-02025, in the U.S. District Court for the the Western District of Pennsylvania.
--Editing by Breda Lund.
Update: This story has been updated with a comment from Cincinnati Insurance.
For a reprint of this article, please contact reprints@law360.com.
