By Dave Sebastian 

Caesars Entertainment Inc. has sued a group of insurance carriers, accusing them of declining to cover an estimated loss of more than $2 billion because of the Covid-19 pandemic.

The casino and hotel company alleges in the lawsuit that it had purchased property insurance coverage to protect against "all risk of physical loss or damage" and resulting business interruption. Most of the policies don't exclude loss or damage caused by a virus or pandemic, Caesars said in the lawsuit filed Friday in the 8th Judicial District Court of Clark County, Nev.

The company said it has paid more than $25 million in premiums to secure the all-risk policy portfolio providing more than $3.4 billion in coverage limits. Caesars, which was formed as a result of Eldorado Resort Inc.'s combination with Caesars Entertainment Corp. last year, swung to a loss of $1.76 billion in 2020.

The suit is the latest case of a company trying to recover lost business during the pandemic through insurance. The insurers have had the upper hand so far. Of the more than 200 rulings in suits pitting businesses against insurers, more than 80% have been in favor of insurers, according to a Covid-19 litigation-tracking effort at the University of Pennsylvania Carey Law School.

The corporate-insurance arm of Allianz SE, which was one of the firms named as a defendant, said it wouldn't comment on individual situations, though it has been evaluating claims during the pandemic on a case-by-case basis to determine coverage.

"We will certainly honor Covid-19-related claims where they are part of our policies and cover is clear," Allianz said. "However, many businesses will not have purchased cover that will enable them to claim on their insurance for Covid-19 pandemic losses."

Caesars, like other casino owners, shut down its properties in March 2020 as Covid-19 lockdowns began, the start of what Chief Executive Thomas Reeg would later call "the most challenging year that we've had operationally and personally to date." Its properties now operate with local restrictions.

A cavalcade of restaurants, retailers and others hurt by pandemic restrictions have sued to force their insurers to cover billions in business losses. Millions of businesses across the U.S. have "business interruption" insurance.

But insurance companies have largely refused to pay claims under that coverage, citing a standard requirement for physical damage. That is a legacy of its origins in the early 1900s as part of property insurance protecting manufacturers from broken boilers or other failing equipment that closed factories. The insurance is also known as "business income" coverage.

However, in a win for insurance policyholders, the U.K. Supreme Court in January ruled that insurers must pay out disputed claims related to the coronavirus to a range of businesses. Rulings from courts outside the U.S. normally don't have an impact on insurance-coverage disputes in American courts, where judges rely on individual state laws, said industry executives and academics.

Write to Dave Sebastian at


(END) Dow Jones Newswires

March 22, 2021 16:23 ET (20:23 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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