MotorCity Casino Hotel Suing Its Insurance Carrier For $270 Million


MotorCity Casino Hotel is betting a judge will side with it in a $270 million lawsuit against its commercial property insurer.

Detroit Entertainment LLC filed the breach of contract lawsuit against New York-based American Guarantee and Liability Insurance Co., a subsidiary of the Swiss Zurich Insurance Group Ltd., because the insurer denied a $270 million claim due to losses incurred as a result of the COVID-19 pandemic, according to a report in the Detroit News.

“The Coronavirus and COVID-19 caused direct physical loss of or damage to property at MotorCity,” MotorCity’s attorney J. Michael Huget wrote in the filing. “The Coronavirus and COVID-19 also rendered MotorCity’s property unfit and unsafe for its normal usages, depriving Detroit Entertainment of its property.”

The Detroit News sought comment from Zurich, but it was told the company does not comment on active lawsuits.

Hope for resolution

“The coronavirus pandemic significantly impacted us, our employees and our community,” MotorCity President Brian Hall said in a statement, according to the paper. “Thus far, our insurance carrier has failed to honor our business insurance claims, necessitating this action. Our hope remains for an amicable resolution.”

At the root of the lawsuit is whether the coronavirus is covered by insurance. Huget, according to the Detroit News’ reading of the lawsuit, states the policy does not exclude coverage due to virus or pandemic, and lays out that it does in fact provide coverage in the case of a civil or military authority interrupting the flow of business.

Of course, Gov. Gretchen Whitmer closed casinos twice in 2020, first in mid-March, which ran through August, and again on Nov. 17 for another month.

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