Braves, other MLB teams sue insurers over COVID-19 losses

Truist Park was closed to fans during the delayed and shortened 2020 regular season.

Combined ShapeCaption
Truist Park was closed to fans during the delayed and shortened 2020 regular season.

The Falcons and Atlanta United aren’t the only Atlanta sports teams suing insurance companies over financial losses caused by the coronavirus pandemic.

The Braves and the 29 other Major League Baseball teams have filed a breach-of-contract lawsuit in California against three insurance companies, similar to the suit filed by the Falcons and Atlanta United in a Rhode Island court.

The baseball lawsuit, filed in Alameda County (Calif.) Superior Court in October and first reported Friday night by The Associated Press, alleges that insurers AIG Specialty, Factory Mutual and Interstate Fire & Casualty have failed to pay claims that should be covered under “all risks” policies purchased by the MLB teams.

The suit argues that, because of COVID-19, baseball stadiums “could no longer serve their principal purpose” and “each club lost many millions of dollars … as core revenue streams were eliminated.”

The Falcons/Atlanta United case, reported Wednesday by The Atlanta Journal-Constitution, makes similar arguments about Mercedes-Benz Stadium.

The 69-page MLB lawsuit, a copy of which was reviewed by the AJC, contains this passage regarding the Braves: “In July 2020, five players for the Atlanta Braves and multiple members of the visiting Miami Marlins who tested positive for COVID-19 were present at the Braves’ facilities. As a result, these Braves’ facilities suffered physical loss and damage.”

In many business-interruption lawsuits around the country stemming from the pandemic, the litigation appears to center around whether the virus constitutes physical loss or damage to properties.

The MLB case lists the Braves, the 29 other teams, the Office of the Commissioner of Baseball, MLB Advanced Media and MLB Network as plaintiffs. The complaint contends that the teams collectively lost billions of dollars when their normal businesses were interrupted by having to play a severely shortened regular-season schedule in stadiums without fans.

The separate lawsuit by the Falcons and Atlanta United against insurers Factory Mutual (FM Global) and Affiliated FM (AFM) contends that policies purchased by those teams and Falcons Stadium Co., operator of Mercedes-Benz Stadium, should pay for business income lost because the stadium and other facilities became “unusable in the way they had been used before COVID-19.”

A spokesman for those insurers, Steven Zenofsky, told the AJC by email Tuesday: “FM Global and AFM value the long-term relationships we have with our policyholders, and we are proud in leading the industry for claims service. It is unfortunate when legal matters arise because we strongly believe our insurance policies are clear on the coverage provided.”