Tribes Sue Commercial Insurers to Cover Costs of Business Disruption

The Chickasaw Nation lawsuit attests its “all risk” insurance policy covers business interruptions. All Chickasaw Nation-owned businesses are temporarily closed to limit the spread of COVID-19, including WinStar World Casino and Resort.

Two Oklahoma Tribes are petitioning state courts to declare their insurance policies cover their coronavirus-related economic losses amid business shutdowns. 

The Chickasaw and Choctaw Nations, operators of several of the largest casinos in Oklahoma, are suing a group of insurance firms including Lloyd’s of London, an insurance marketplace delivered through American International Group Inc. (AIG), and XL Insurance America (now part of AXA SA), among others. 

The Chickasaw and Choctaw Nations — like every gaming Tribe throughout Oklahoma — have temporarily closed their casinos as well as their tourism and entertainment-related businesses to protect patrons and employees and to curb the virus’ spread. As the second-largest Indian gaming market nationwide, just shy of California, Oklahoma produces roughly $4.4 billion in annual gaming revenues, according to the latest Casino City Indian Gaming Industry Report.

READ MORE: Oklahoma’s Casino Market Is Closed Statewide to Curtail the Coronavirus Outbreak 

The Tribes filed separate petitions requesting court judgments that their insurance policies cover business losses and expenses suffered in connection with the COVID-19 outbreak. The Chickasaw Nation lawsuit attests its “all risk” insurance policy covers business interruptions.

According to a report by Insurance Journal, business interruption policies often exclude coverage for pandemics and require physical damage to occur on the site. Insurance Journal says that the Chickasaw Nation’s lawsuit asks the court to determine that the coronavirus is a type of “direct physical loss or damage” that would make insurers responsible for covering lost revenue.