Colorado Casinos Go Bust on COVID
Monarch Casino & Resort, Inc., which owns a casino in Black Hawk, Colorado, sued its insurer, Affiliated FM Insurance Company, for $350 million in coverage during the months of closures and restrictions due to the pandemic.
However, a three-judge panel of the U.S. Court of Appeals for the 10th Circuit dismissed the case, pointing to their previous decision in January that COVID-19 did not cause physical damage and therefore could not support an insurance claim.
The judges also highlighted an important detail in Monarch's policy - a broad exclusion for contamination, including viruses. This made it clear that COVID-19 was not covered under the policy, and any claims for damages would be rejected.
The decision has divided interest groups, with the American Property Casualty Insurance Association arguing that forcing insurers to pay for COVID-19 related losses would bankrupt the industry and result in higher premiums for all businesses in the future. They argue that government-backed pandemic recovery solutions should be the source of funding for struggling businesses, not insurance policies.
On the other hand, United Policyholders, an organization that advocates for insurance consumers, dismisses these concerns as scare tactics. They point out that insurance companies actually turned a profit in 2020, despite the challenges posed by the pandemic.
Monarch's insurer did offer coverage for communicable diseases, but with a limit of $100,000. Monarch's attempt to claim the full $350 million under this provision was rejected by the courts.
Despite arguments from Monarch's attorney that the policy was confusing and ambiguous, the 10th Circuit stood by their decision that COVID-19 does not cause physical damage.
The court's ruling was also supported by the Colorado Supreme Court, which recently decided a similar case with the same conclusion - COVID-19 affects people, not property. This means that businesses can only claim the limited coverage provided by their policies and cannot demand more.
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In the end, the 10th Circuit emphasized that they are not in the business of rewriting insurance policies and that Monarch should be satisfied with the coverage provided by their policy, even if it falls short of their desired amount.
While this may be a disappointment for Monarch and other businesses hoping for a large payout from their insurance policies, it reaffirms the court's stance that COVID-19 is not something that can be covered under current insurance policy.