June 23, 2020 / 6:36 PM / 11 days ago

U.S. minor league baseball teams sue insurers for pandemic business losses

June 23 (Reuters) - Fifteen U.S. minor league baseball teams on Tuesday sued several insurers, including a Tokio Marine Holdings Inc unit, for not paying out claims for business interruption losses after the cancellation of “much or all” of the league’s season as a result of the coronavirus pandemic, according to a lawsuit.

The cancellation is a “catastrophic loss” for the teams, which include the Chattanooga Lookouts in Tennessee, the Fort Wayne TinCaps in Indiana and the Amarillo Sod Poodles in Texas, the teams said in a lawsuit filed in a Pennsylvania federal court.

They dispute insurers’ claims that their losses are not covered by their policies.

Other insurers named in the suit include Philadelphia Indemnity Insurance Co, National Casualty Co, and Scottsdale Indemnity Co. None immediately responded to requests for comment. A spokeswoman for Acadia Insurance Co, a W.R. Berkley Corp unit, declined immediate comment.

The cancellation of minor league baseball games is the latest example of how the pandemic is upending global sports events.

Novak Djokovic, the men’s world No. 1 tennis player, tested positive for COVID-19 earlier on Tuesday and then apologized to all individuals who contracted the virus after playing in an exhibition tournament he organized in Serbia and Croatia.

Global insurers have begun rejecting claims from all sorts of businesses affected by the coronavirus crisis, such as restaurants, hotels and retail stores. Insurers say the policies only apply when actual physical property damage prevents a business from operating.

The minor league teams’ suit alleges that the presence of the coronavirus has caused such damage and that exclusions in some coverage for viruses and bacteria are unenforceable.

Minor league teams incur more than $2 million in expenses to operate regardless of whether their businesses are running, the lawsuit said. Expenses include rent, marketing and merchandise.

Reporting by Suzanne Barlyn in Washington Crossing, Pennsylvania; Editing by Leslie Adler

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