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Federal court dismisses Lakers’ COVID-19 suit against Chubb unit

staples center

A federal court has dismissed COVID-19 business interruption litigation filed by the Los Angeles Lakers basketball team against a Chubb Ltd. unit, ruling the team had not supported its claim that the virus caused direct physical loss or damage.

Under California law, “a direct physical loss contemplates an actual change in insured property,” said Wednesday’s ruling by the U.S. District Court in Los Angeles in The Los Angeles Lakers, Inc. v. Federal Insurance Co.

The Lakers alleged in litigation filed against Chubb unit Federal Insurance in March that COVID-19’s presence at the Staples Center and the surrounding transportation stations physically altered the property. 

These “are merely legal conclusions couched as factual allegations,” the four-page ruling said in dismissing the case. “The Lakers failed to allege any facts to support its conclusion that the presence of COVID-19 constituted a ‘direct physical loss or damage.’”

The Lakers’ all-risk policy did not include a virus exclusion. The team had paid $145,052 in premium for the policy, which provided $89.4 million in coverage, including $47.6 million for business interruption, according to the complaint.

Attorneys in the case did not respond to requests for comment.

Similar litigation filed by the Sacramento Kings basketball team against FM Global in March continues.