I grew up being a baseball player. From the time I was old enough to stand and throw a ball, baseball was a large part of my life. It taught me valuable life lessons like winning and losing, leadership, playing with a team, hard work and dedication. I played all four years I attended Johns Hopkins and even earned some mediocre accolades with these stats. This baseball season was strange due to the pandemic. It was shortened to sixty games, DH across the entire league and the craziest change, no fans. Prior to the Major League Baseball (“MLB”) season starting, I found myself starved for baseball and watching the Korean baseball league on ESPN.

Recently, MLB sued its insurers, AIG, Factory Mutual Insurance Company, and Interstate Fire & Casualty Company, for losses related to the COVID-19 pandemic in California state court. The 336 count Complaint can be found here. Specifically, MLB is seeking losses from unsold tickets, concessions, parking, suites and luxury seat licenses, in-park merchandise sales, corporate sponsorships, local and national media losses, plus tens of millions in missed income for MLB Advanced Media, amounting to billions of dollars in losses. In total, MLB Commissioner Rob Manfred believes the COVID related limitations placed on the league led to approximately $3 billion in losses. Mark Friedlander, director of corporate communications at the Insurance Information Institute (III), has maintained that paying billions of dollars in claims to Major League Baseball teams would bankrupt the property & casualty industry, leaving U.S. homeowners and drivers unprotected for claims that are actually covered…”. Forgetting for a second that III is run by insurance companies and their representatives, since 2009, AIG has averaged almost $62 billion in revenue per year.

MLB insists it has paid premiums to get the best of the best insurance policies so this must be covered. Not many insureds have faired well in their insurance claims for business interruption based upon COVID-19 losses. California seems to be more insured friendly as they recently tried to pass California Assembly Bill 1552 which is now stalled. My colleague, Victor Jacobellis, has previously blogged about the many insured friendly bills introduced in California. The bill would create three coverage friendly “rebuttable presumptions”:

  1. COVID-19 was present on the insured’s property and caused physical damage to that property which was the direct cause of the business interruption.
  2. COVID-19 was present on property located within the geographical location covered by the order of civil authority and caused physical damage to that property which was the direct cause of the insured’s business interruption claim.
  3. COVID-19 was present on the property of a third party and caused physical damage to that property which was the direct cause that prevented the ingress and egress to the insured’s property and resulted in the insured’s business interruption.

It will be interesting to see if MLB gets past the first round of motions to dismiss, and if they do, what further recourse do they have. Maybe MLB should take advice from one of its greatest players, Yogi Berra, who said, “when you come to a fork in the road, take it.”