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One of the most visible disruptions to everyday life in America because of the COVID-19 pandemic has been in professional sports.
Once one of the most popular ways to escape for a few hours, watching live sports now bombards you with pandemic-related images: masked coaches, fake crowd noise, and empty stands.
But beyond the symbolic role that professional and college sports play in American life, leagues and teams are businesses, and the pandemic is causing them huge losses as well. And just like countless other businesses across the country, sports teams are having a hard time getting their insurance providers to cover their losses.
In a lawsuit filed in California, Major League Baseball, all 30 individual MLB teams, the MLB Network, and the MLB-owned Tickets.com all accuse their insurance providers of failing to uphold their policies.
"Baseball paid millions of dollars in premiums year after year because it deliberately bought broad, more protective coverage," which insurers have declined to cover, the suit reads.
A typical MLB regular season is 162 games for each team. The 2020 season, however, was shortened to 60 games played without fans. That loss of more than 1,500 games includes a loss of broadcast revenue and fans paying for tickets, parking, concessions, and merchandise, totaling billions of dollars in losses.
In the business interruption suits that have been thrown out so far, judges have ruled that COVID-19 does not cause business operations to stop because of physical property damage, a key in most policies.
Some policies also clearly contain exclusions for infectious diseases, which was the case when earlier this month a federal judge threw out a lawsuit filed by 18 minor league baseball teams.
But MLB's lawsuit doubles down on the physical damage claim, arguing that coronavirus particles "has attached and adhered to plaintiffs' property, and by doing so, altered that property. Such presence has also directly resulted in loss of use of those facilities."
In plain English: the virus really does cause property damage that leads to financial losses.
Additionally, while MLB insurer Factory Mutual's policy contains a "hidden exclusion" for "contamination," which could mean viruses, the policy also provides coverage for communicable diseases.
There are likely to be intense negotiations between MLB and its insurance providers, and federal courts may get involved. A ruling either way is likely to have an effect on how small business owners argue their cases in court that they also deserve insurance coverage for their losses.
With every other professional and college sports league in the U.S. suffering serious financial losses due to the pandemic, how this case plays out will probably affect whether we see more cases like it. A loss for baseball, coupled with further pandemic-related restrictions stretching into next season, will likely mean sports leagues and teams have to make tough financial decisions that fans will feel as well.