Caesars Entertainment 2 Billion Dollar Claim Against Insurers Over COVID-19 Pandemic

‘Caesars Entertainment 2 Billion Dollar Claim Against Insurers Over COVID-19 Pandemic!’ (Image Source: images.unsplash.com)

Caesars Entertainment Inc. recorded huge losses of roughly $2 billion during the COVID-19 pandemic and is taking its insurers into a legal battle to recoup some or all losses!

Many of the insurers charge high premiums to cover any risk of losses. Caesars Entertainment was willing to pay those premiums which were apparently up to $25 million to secure ‘any losses’, but 3 insurers we know of are refusing to pay back the casino company’s losses. Naturally, the refusal to honour insurance contracts instigated a legal strategy from Caesars, which has now come to fruition with a claim filed with the U.S. Securities and Exchange Commission.

The companies the claim is said to be against include big names such as Allianz Global Corp, American Guarantee and Liability Insurance Co, plus Ace American Insurance Co.

Financial, business, casino, and iGaming newswires have been flying out of the traps covering the story with multiple angles and opinions. Some ‘for’ the claims and some ‘against’ with plenty of law blogs and experts giving their opinion on the subject.

The Main Topic of the Claim is the Exclusions Clause

Anyone who has dealt with insurers will know that there is always that fine print stating ‘exclusions’. Caesar’s view on the subject is that the company is covered for physical loss or damage that results in interrupting its natural flow of business.

Caesars claims that COVID-19 is not an exception to the policy in the sense the insurers are claiming. Accordingly, lockdowns and closures instigated by the government which caused the casino to lose ‘at least’ a large portion of its reported $2 billion in losses are not excluded from the ‘All Risk Policies’ that are the subject of legal debate. In short, a profitable company pre-pandemic is not running at a loss!

Unlikely All Losses Will Be Recovered but Similar Lawsuits Have Shown Success

The legal team representing Caesars is under no illusions that the entire $2 billion in losses will be recovered, but the hope is that a considerable chunk of change is due to the casino owner and that it should receive some compensation in return for over $25 million in premiums paid.

Apparently, the 80-page legal dossier outlines all legal points in this case and surely refers to previous cases that are also Pandemic related as this is not the first legal suit filed with the U.S. Securities and Exchange Commission by a Las Vegas casino.

Circus Circus filed a federal lawsuit to claim back losses it sustained from the COVID-19 crisis. The insurer in question, AIG Specialty Insurance Company, refused to pay out an ‘All Risk’ policy claiming the Pandemic is an exception to the policy. Although AIG attempted to use circumstantial points to argue its case, Circus Circus has a rock-solid policy in place of which it forked out a $1.6 million premium.

In the end, Jennifer A. Dorsey, the U.S. District Judge, ruled in favour of the casino establishment, which meant AIG was required to pay out close to $100 million!

The Caesars Entertainment Inc. case is much larger, and with the promise of similar cases already ruling in favour of the claimant, it seems that the company is surely going to receive the compensation it deserves for paying millions in premiums. Caesars would prefer to settle and have all legal costs paid on top, however, it has 3 insurers to take on so it may be a while before we see the results!

Still Seemingly In A Great Financial Position

Caesars Entertainment Inc looks to be in a great financial position online with its recent acquisition of William Hill finalised entering into the UK market while William Hill also has large operations in the USA. Caesars is also one of the pioneering forces behind the reemergence of the US online casino and sports betting market. It already has operations running in Pennsylvania where the brand is partners with Evolution!

This latest Caesars Entertainment 2 billion dollar claim is just another part of doing business for one of the world’s most successful casino entertainment brands!