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Another NBA team sues FM Global for COVID-19 coverage

Posted On: Mar. 15, 2021 3:11 PM CST


The Sacramento Kings basketball team and its venue are among organizations suing FM Global seeking coverage for revenue lost during COVID-19-related lockdowns over the past year under an all-risk policy from the insurer.

A March 11, 2020, game the Sacramento Kings was scheduled to play in New Orleans was canceled and on March 12, the same day California Governor Gavin Newsom issued an executive order prohibiting gatherings of 250 or more, the National Collegiate Athletic Association canceled the 2020 Men’s basketball tournament. The tournament would have included games hosted in the team’s stadium, Golden 1 Center, according to last Thursday’s lawsuit filed in U.S. District in Sacramento in Sacramento Downtown Arena LLC et al. v. Factory Mutual Insurance Co. et al.

Plaintiff Sacramento Downtown Area, which owns the Sacramento King’s stadium, had purchased the policy, which has maximum coverage of $850 million per occurrence, from FM Global, according to the suit.

In addition to team owners Sacramento Kings Limited Partnership and the stadium operator, other plaintiffs are the owner of the Kimpton Sawyer Hotel, Sac MUB1 Hotel LLC, and SGD Retail LLC, the owner of the Sacramento Downtown Commons retail spaces.

The lawsuit seeks a declaration that the organizations are owed coverage and charges breach of contract and breach of the implied covenant of good faith and fair dealing. It also seeks punitive damages and attorneys’ fees, among other things.

FM Global said in a statement it “values the long-term relationships we have with our policyholders and we are proud to be 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.”

Last year, the Houston Rockets also sued FM Global for COVID-19-related coverage. 

More insurance and risk management news on the coronavirus crisis here