Menominee Indian Tribe of Wisconsin Sues Insurers Over Allegedly Improper Denial of COVID-19 Loss Claim

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The Menominee Indian Tribe of Wisconsin and the operating arms of its gaming and non-gaming businesses have filed a proposed class action against a group of insurers over their alleged refusal to pay claims for damages stemming from the coronavirus pandemic.

According to the breach-of-contract case, the plaintiffs suffered “direct and physical loss or damage” as a result of being unable to use their properties for their intended purposes amid the COVID-19 crisis, and thus should have received payment through their insurance policies.

Nevertheless, the defendants have, “on a uniform basis,” refused to pay claims for losses and damages caused by the pandemic and related business closure orders, the complaint avers.

Named as defendants in the lawsuit are Lexington Insurance Company, roughly two dozen Underwriters at Lloyd’s syndicates, Homeland Insurance Company of New York, Hallmark Specialty Insurance Company, Endurance Worldwide Insurance Ltd., Arch Specialty Insurance Company, Evanston Insurance Company, Allied World National Assurance Company, Liberty Mutual Fire Insurance Company, and Landmark American Insurance Company.

The lawsuit alleges the plaintiffs’ losses were covered under a master policy issued as part of a Tribal Property Insurance Program (TPIP) prepared by non-party Tribal First. The TPIP is comprised of “all risk” policies from over a dozen insurance companies and includes business interruption, extra expense, ingress/egress, civil authority, contingent time element and tax revenue interruption coverages, “each of which applies here,” the suit says.

Per the case, the covered properties include the casino, hotel, restaurant, healthcare center and other property located at Menominee Casino Resort, a nearby mini casino and entertainment facility called Thunderbird and a healthcare clinic at which members of the Menominee community are treated.

According to the suit, the plaintiffs’ insurance policy provides coverage for “direct and physical loss or damage” to the covered properties and contains no exclusions for losses caused by the spread of a virus. The complaint stresses that the losses suffered by the plaintiffs were direct physical losses given the covered properties could no longer be used for their intended purposes.

“Due to COVID-19, these properties have become unsafe for their intended purpose and thus have suffered physical loss or damage,” the complaint reads. “If they were to conduct business as usual, the disease and virus would appear, and guests, gamblers, meeting attendees, diners, patients, and others would get sick.”

Per the case, federal, state and local closure orders have restricted or blocked the use of the plaintiffs’ properties since March 2020. Although the plaintiffs submitted a claim for damages under their insurance policy, the defendants have denied that claim, the suit says.

Initially filed in Alameda County, California Superior Court, the lawsuit was removed to the state’s Northern District Court on January 11, 2021.

At least one of the defendants, Liberty Mutual, has previously faced class action litigation over its alleged refusal to pay commercial property insurance claims over losses related to COVID-19.

ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.

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