The National Hockey League and 20 of its teams are suing five of their insurance providers, alleging the companies have breached contracts by refusing to reimburse more than $1 billion worth of losses due to the COVID-19 pandemic.
The lawsuit was filed in June 2021 in the Superior Court of California in Santa Clara.
The parent companies of the Toronto Maple Leafs, Ottawa Senators, Winnipeg Jets, Montreal Canadiens, and Vancouver Canucks are among the teams suing. While the claim does not say how much the plaintiffs have asked a court to award, it says losses suffered by the NHL and its clubs exceed $1 billion.
Factory Mutual Insurance Company, The Cincinnati Insurance Company, Starr Surplus Lines Insurance Company, Lexington Insurance Company and Federal Insurance Company are listed as defendants in the case; however the Cincinnati Insurance Company says it was removed as a defendant in the case in an amended complaint filed in October of 2021.
It’s unclear why some NHL teams – among them the Calgary Flames and Edmonton Oilers – are not listed as plaintiffs.
“Some cities that have a stake or interest in an NHL arena may have insurance coverage beyond what the NHL has put together,” said Mary Kelly, a professor of finance and chair of insurance at Laurier University’s Lazaridis School of Business and Economics in Waterloo, Ont.
The NHL and Factory Mutual did not respond to requests for comment.
The league says its policies with Factory Mutual promise coverage for the “massive losses” its teams now face due to COVID-19, including losses from “when a communicable disease physically alters the air and surfaces within the clubs’ arenas, making them unfit for their intended use.”
Other insurers besides Factory promised to pay significant amounts for each occurrence, the NHL says.
The NHL also says Factory Mutual’s policies included specific coverage for losses relating to a communicable disease.
In a Nov. 12 court motion, Factory Mutual asked a judge to dismiss the NHL’s claim, saying the league “does not allege any ‘physical loss or damage’ to plaintiffs’ property, which is a threshold requirement of the coverages plaintiffs seek.”
The NHL and its teams on Dec. 16 objected to that motion, arguing their policies “cover revenue lost when a government order issued because of physical damage within five miles of the hockey plaintiffs’ property restricts access to those insured arenas, regardless of whether the hockey plaintiffs’ property itself is damaged.”