Jamul Casino files lawsuit against Lexington Insurance for COVID losses

Jamul Indian Village of California has filed a lawsuit against Lexington Insurance Company for an alleged denial of coverage regarding losses suffered by its Jamul Casino property, triggered by a temporary closure to combat the spread of coronavirus.

Filed against Lexington, a wholly-owned subsidiary of American International Group, in the Intertribal Court of Southern California, Jamul, which has requested a jury trial, alleges “causes of action for declaratory relief, breach of contract, and breach of the implied covenant of good faith and fair dealing”.

Furthermore, the tribe also alleges that Lexington has wrongly required ‘physical’ damage or destruction of property to receive coverage under the ‘Interruption by Civil Authority’ provision of the policy, despite the fact that the word ‘physical’ does not appear in this provision. 

“Jamul believes that Lexington didn’t interpret our policy correctly and has wrongly denied coverage,” said Erica Pinto, chairperson of the Jamul Indian Village Development Corporation board of directors.  

“We have an ‘all risk’ policy, which was intended to cover any and all risks. We believe that includes losses related to the pandemic.”  

Additionally, Jamul asserts that Lexington is unreasonably relying on a ‘pollution exclusion’  of the policy, which does not specifically exclude coverage for losses related to contagious diseases such as viral or bacterial infections.

Jamul Casino shut down its operations for approximately two months from March 20, 2020, and says that it had three active ‘all risk’ policies with Lexington when the venue closed during the initial outbreak of the virus.

Pinto added: “There are no virus or other remotely related exclusions in our policy. In fact, Lexington added language when our policy renewed this July for ‘communicable diseases,’ so, clearly, they know they are wrong but still don’t want to compensate us for our losses.  

“It’s not fair or right, so we will hold them accountable to live up to the terms of our policy. We look forward to a quick resolution and payment of our claim so we can continue to help our people recover from this difficult situation.”

Jamul is seeking payment for its COVID-related losses, including business interruption damages, cleaning and disinfection expenses, and attorney’s fees and costs.