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NHL, 20 teams sue insurers for not covering over $1B in COVID losses

The National Hockey League is calling foul on insurance companies for allegedly refusing to pay out claims to cover more than $1 billion in losses brought about by the COVID-19 pandemic over the past two seasons. The league and 20 of its clubs filed a lawsuit in California Superior Court against five of their insurance providers, which are accused of breach of contract for failing to reimburse the plaintiffs for pandemic-induced losses. The insurance companies tried to get the case dismissed, but in late December, the NHL and 20 of its teams objected to the attempt, saying their policies should cover revenue lost because of the shutdowns, according to TSN, which reported on the lawsuit Wednesday. The Post has sought comment from the NHL and the insurance companies named in the lawsuit, but they didn’t immediately rspond. In 2020, the NHL and other professional sports leagues played the second half of their regular season schedule and playoffs in front of empty arenas due to government-ordered lockdown measures barring fans from large venues. In its June 2021 filing in Superior Court of California in Santa Clara, the league names as defendants five insurance companies — Factory Mutual Insurance Company, the Cincinnati Insurance Company, Starr Surplus Lines Insurance Company, Lexington Insurance Company and Federal Insurance Company. Among the teams listed as plaintiffs are the parent companies of the San Jose Sharks, Anaheim Ducks, the Boston Bruins, the New Jersey Devils, the Buffalo Sabres, the Minnesota Wild, the Dallas Stars, the Nashville Predators, the Montreal Canadiens, the Toronto Maple Leafs and others. Factory Mutual filed a motion in court this past November asking a judge to dismiss the NHL’s claim, according to TSN. The insurance company said the league “does not allege any ‘physical loss or damage’ to plaintiffs’ property, which is a threshold requirement of the coverages plaintiffs seek.” But the NHL on Dec. 16 — and 20 of its clubs — contested the motion to dismiss, arguing in court that the insurance policies “cover revenue lost when a government order issued because of physical damage within five miles of the hockey plaintiffs’ property restricts access to those insured arenas, regardless of whether the hockey plaintiffs’ property itself is damaged,” according to the TSN report. In its court filings, the league described the financial hardships brought about by the COVID-19 pandemic. During the 2019-2020 season, the NHL was forced to cancel 189 regular season games. In then staged a playoffs in two neutral site cities — Toronto and Edmonton — where teams were confined to a “bubble” in order to avoid players, coaches, and other staff getting infected. Fans were not permitted to attend any of the “bubble” games in the two Canadian cities. “Fan attendance is a life-blood of the plaintiffs’ revenues,” the NHL said in its legal filing. “A significant source of the plaintiffs’ revenue comes from arena-related activities, such as ticket sales, concessions, parking, and in-arena merchandise sales … The extra expense the NHL incurred to host the 2020 playoffs and Stanley Cup Final was enormous.” Last season, each NHL club played a truncated 56-game schedule rather than the usual 82-game schedule. Those games were played in front of “minimal, if any, fan presence,” according to the league. The NHL also claims that its teams have spent millions in making their arenas sanitary for resumed fan attendance, including the addition of HVAC systems, physical barriers, and touchless entry and payment systems. This season, the NHL has returned to a full 82-game schedule, but it has been forced to postpone dozens of games due to the spread of the Omicron variant in recent weeks. The NHL isn’t the only pro sports outfit to take insurance companies to court over COVID-19 losses. In December of 2020, Major League Baseball and its 30 teams filed a lawsuit against insurers AIG, Factory Mutual, and Interstate Fire and Casualty Company alleging breach of contract. Like the NHL, MLB, which canceled 1,500 games due to the onset of the coronavirus pandemic, also claims that its revenue losses during the pandemic surpassed $1 billion. The NCAA, the governing body of collegiate athletics in the United States, managed to collect $270 million from insurance companies after the cancellation of its signature event, the March Madness tournament, in March of 2020.




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