MLB Sues Insurance Providers

MLB Lawsuit

Amid the multitude of player moves during the MLB offseason there lies some legal actions taking place. Recently, Major League Baseball MLB and all 30 teams engaged in a lawsuit suing their insurance providers. The league is citing billions of dollars in losses during the COVID-19 stricken 2020 campaign that was void of fans.

The Losses of COVID-19 

The MLB lawsuit was originally filed in October in California Superior Court and was originally obtained by The Associated Press. The suit itself says the insurance providers for MLB in AIG, Factory Mutual, and Interstate Fire and Casualty Company have refused to pay claims made by MLB even under their all-risk policy.

It talks about the billions of dollars lost due to no ticket sales, concession purchases, parking fees, merchandise sales, and more. That’s without mentioning the millions of dollars lost on suites and luxury seat licenses. The suit also cites over a billion dollars in local and national media losses. Not to mention upwards of tens of millions of dollars in missed income for MLB Advanced Media. All of those losses, the suit says, should be covered by the policies.

The Aftermath 

Many teams have laid off front-office employees in response to the pandemic which in turn brings worry about a slow offseason. Several clubs have already let go of big-time players just to save money. The Cleveland Indians declined Brad Hand’s $10 million option, Houston Astros outfielder George Springer doesn’t seem likely to get a contract to stay in Huston. Kyle Schwarber’s tenure with the Chicago Cubs has come to an end as well.

Due to COVID-19, the entire structure of the MLB schedule was altered in 2020. MLB cut the Spring Training season short while postponing the regular-season start date. When things got back into action, the schedule had to be cut from 162 games to just 60 regular-season contests. The league followed the NBA’s “bubble” path for the postseason that included an expanded list of teams. It also meant limited to no fans for most of the postseason with a mere 11,000 fans present at the World Series which was held exclusively at Globe Life Field in Arlington.

The Insurance Battle 

The pandemic has brought more than illness but a litany of lawsuits, over 1,400 in fact. All such suits are in regards to business interruptions caused by the pandemic. Lawsuits that also include several brought forth by minor league baseball for which their season was completely wiped out. The problem has been getting those suits to stick. In Arizona, the Chattanooga Lookouts led such a lawsuit but that has already been dismissed due to a virus exclusion in the policy. In most cases, insurers have insisted the financial losses caused by COVID-19 does not constitute physical loss or property damage. Major League Baseball is saying that the virus has led to both.

The battle still has to play out with a final decision yet to be made. Major League Baseball has not yet stated whether spring training in 2021 or the regular season will start on time. Amid the MLB Lawsuit still in limbo. free agency has started and the majority of the teams will have less money to spend.

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