According to the complaint, the Staples Center remains closed to the public per California and Los Angeles regulations. Over the last year, the Lakers' arena has undergone "extensive physical alterations, disinfection, sanitizing and other safety protocols," the Lakers said. And the coronavirus was physically present at the Staples Center and caused physical loss and damage to the arena and its surrounding properties, the team said.
The Lakers have an "all-risk" policy from Chubb subsidiary Federal Insurance Co. that doesn't include a virus exclusion, meaning that their policy covers losses stemming from pandemics, the team said Monday. However, Chubb has refused to cover the team's losses, it said in the suit. The Lakers didn't specify the amount Chubb allegedly owes the team.
"In fact, Chubb curtly dismissed the Lakers' claim with a form letter and without conducting any investigation into the facts," the Lakers said. "Worse yet, it has refused to pay its customers as a matter of policy on the orders of its CEO, instead pushing the false narrative that losses from COVID are somehow not covered claims."
The team added, "This lawsuit is compelled by that callous and legally untenuous response."
As the virus takes hundreds of thousands of lives and forces countless small businesses to shutter, insurers like Chubb are reeling in profits, the Lakers said. Recently, Chubb posted quarterly gross income from insurance premiums of over $10.2 billion, more than $1.2 billion more than the profits posted the same quarter a year prior, according to the suit.
"The past year may have been terrible for the rest of us, but it has been terrific for the insurance companies," the Lakers said.
And Chubb is flush because its coffers are filled with the premiums paid by its customers — "the same customers for whom Chubb has refused to pay out on 'all-risk' policies that cover losses on all of an insured's risks except those expressly excluded from the contract," the Lakers said.
The Lakers join a growing list of businesses that are taking on insurers in federal and state courts. A San Francisco concert promoter also challenged Chubb's coverage denial, though a California federal judge sided with the insurer late last month. In that suit, Another Planet Entertainment wasn't able to show any property damage, U.S. District Judge Vince Girdhari Chhabria held at the time.
Last week, the owners of the Sacramento Kings claimed they were owed $850 million for pandemic-related losses from having to cancel live entertainment events in response to government shutdown orders. Factory Mutual must cover for business interruption losses arising from canceled events such as NBA basketball games, NCAA tournament games, concerts by Billie Eilish and Camila Cabello, and a talk by former first lady Michelle Obama, according to the suit filed by the Sacramento Kings Limited Partnership and a group of other Sacramento retail and hospitality owners.
And earlier this month, the Chicks' touring company sued Lloyd's underwriters, claiming the insurer is on the hook to the tune of $6.6 million after the band's canceled tour for their "Gaslighter" album.
Chubb said it doesn't comment on pending litigation, and counsel for the Lakers didn't immediately return a request for comment late Monday.
The Lakers are represented by Manuel Cachán, Kyle Casazza, Shawn Ledingham, John Failla and Nathan Lander of Proskauer Rose LLP.
Counsel information for Federal Insurance wasn't immediately available Monday.
The case is The Los Angeles Lakers Inc. v. Federal Insurance Co., case number 2:21-cv-02281, in the U.S. District Court for the Central District of California.
--Additional reporting by Shawn Rice and Daphne Zhang. Editing by Ellen Johnson.
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