Washington Wizards owner wins partial victory in COVID case

A federal district court has refused to entirely dismiss COVID-19 business interruption litigation filed by the owner of several Washington, D.C., professional sports teams, based on its coverage’s communicable disease provisions.

Washington-based Lincoln Holdings LLC, also known as Monumental Sports, filed suit against Factory Mutual seeking COVID-19 business interruption under its all-risks policies, according to Monday’s ruling by the U.S. District Court for the District of Columbia in Lincoln Holdings LLC et al. v. Factory Mutual Insurance Co.

Lincoln Holdings’ operations include the National Hockey League’s Washington Capitals, the National Basketball Association’s Washington Wizards, the WNBA’s Washington Mystics and the Capital One Arena.

The court’s ruling said Lincoln Holdings’ claims under its coverage’s physical damage and repair and its time element provisions require alleging facts showing physical loss or damage, which it failed to do, and it agreed to dismiss those claims.

However, the coverage’s communicable disease provisions, which include the communicable disease response, and interruption by communicable disease, provisions “do not require demonstration of physical loss or damage,” the ruling said, in refusing to dismiss those claims.

These provisions provide for the cleanup, removal and disposal of the presence of communicable diseases from insured property, the costs of using the insured’s employees for reputation management, and certain business income losses and expenses. 

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

Also Monday, a federal district court in New York refused to entirely dismiss COVID-19-related business interruption coverage based on what it said is ambiguous policy language, in a lawsuit filed by a Broadway theater group against a Chubb Ltd. unit.