MiLB teams sue the insurance providers on denied virus claims

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Fifteen minor league baseball, teams have filed a complaint alleging a breach of contract by the insurance providers after being denied claims for business-interruption insurance due to the sars coronavirus pandemic.

Major League Baseball announced on Monday that he will attempt to play a 60-game regular season, but the smaller clubs of the league — many under the threat of losing affiliations in the middle of negotiations with the MLB, it is unlikely to play until at least 2021.

The minor league franchises, said in the suit filed Tuesday that even if they continue to pay annual premiums for the insurance providers to the business-interruption insurance, they were denied coverage after the Baseball Commissioner Rob Manfred indefinitely suspended from their season in March.

Minor league teams are for the most part small, independent businesses, and their model is based on the affiliates of the receiving players, coaches and team personnel provided by major league clubs.

Government restrictions on mass gatherings are also excluding minor league teams of the accommodation of the fans in their stadiums, by far the largest source of income for these franchises. Over 40 million fans attended minor league games involving 176 affiliates last season.

The lawsuit claims teams are stuck with more than $ 2 million in spending on average, including $ 1 million in the baseball stadium lease payments, marketing costs, food and beverages, supplies, salaries and benefits for permanent employees.

The teams say that the suppliers are citing two reasons for denying the claims, because the losses are not resulting from direct physical loss or damage to the property, or because of the policies include language excluding coverage for loss or damage caused by viruses.

The teams say the loss of the use of their stadiums because of restrictions imposed by the government on the fan gatherings and their inability to get players qualifies as a physical loss. They allege in the last paragraph is void because it is unworkable and unenforceable.

The probability of a loss of the vision 2020 of the season comes to a already difficult for minors. The Professional Baseball Agreement between MLB and minor league team owners is set to expire after this season, and MLB, has proposed the reduction of the minimum guarantee of subsidiaries from 160 to 120.

The complaint, filed in U.S. District Court in Philadelphia, names of Philadelphia Indemnity Insurance Co., Acadia Insurance Co., National Casualty Co., Scottsdale Indemnity Co., and Scottsdale Insurance Co. as the defendants. Acadia Insurance has refused to comment. Scottsdale Indemnity and Scottsdale Insurance are in the National network, nationwide said in a statement “we are committed to doing all that we can, in the coverage of our members have bought” to help companies navigate in the event of a pandemic.

“We have put in place a process to review and assess the coronavirus claims and we will assess any claim based on the relevant facts and the merits of the claim,” the statement said. “Business interruption coverage due to a virus outbreak has been excluded from the standard policies issued to owners of the company through the insurance industry for some time. The risk for such an event is so vast, including in the standard of coverage make such insurance unaffordable, if not impossible.”

The minor league clubs that are listed in the suit are the Chattanooga Lookouts, the Augusta GreenJackets, Boise, Hawks, Columbia, Fireflies, Eugene Emeralds, Binghamton Rumble Ponies, the Fort Wayne TinCaps, Frederick Keys, Greenville Drive, Idaho Falls Chukars, Inland Empire 66ers, Amarillo Sod Poodles, San Antonio Missions, Stockton Ports and Delmarva Shorebirds.



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