A Connecticut Native American tribe can recover up to $2 million in COVID-19 business interruption losses and cleanup costs under its $1.6 billion in coverage, a state court has ruled.

The Mashantucket Pequot Tribal Nation had more than $76 million in business losses and cleaning expenses at the vast casino complex it runs on its eastern Connecticut tribal lands, according to the Aug. 18 ruling by the Superior Court in Hartford in Mashantucket Pequot Tribal Nation v. Factory Mutual Insurance Co.

The tribe had filed the litigation in January, seeking coverage and charging bad faith and breach of contract. 

The tribe’s all-risk policy included an exclusion for “any cost due to contamination” unless it directly resulted “from other physical damage not excluded by this Policy,” according to the ruling. Contamination is defined “to include various poisons and pathogens and any virus,’” it said.

The Pequots, however, bought extra coverage for communicable disease response costs that included money for cleanup and for communications designed to protect the Pequots’ business reputation, and for communicable disease interruption losses called “time element” losses, the ruling said.

These provided coverage for $1 million for communicable disease response and another $1 million for business interruption, the ruling said. 

There is no more coverage available under the policy, the ruling said. “The Pequots try to show that costs caused by a virus are directly resulting from other physical damage not excluded,” the ruling states. But “they can’t escape the fact that their damage was directly caused by the virus, not some other covered cause,” it states.

The ruling said the Pequots must prove covered costs and their amounts at trial and their allegation that the relevant property had “the actual not suspected presence of communicable disease.”  The tribe must also prove “whatever is left of their bad faith and unfair trade practices claims,” the ruling said.

Factory Mutual said in a statement, “We agree with the ruling and are pleased that the judge viewed the policy the way we applied it.”

The tribe’s attorneys did not respond to a request for comment.