The rodeo said its insurance company acted maliciously and in breach of its contract when it refused to cover more than $ 79 million in its “all risk” policy.
HOUSTON – The Houston Livestock Show and Rodeo will go to court to offset millions of dollars in COVID-19 losses their insurance company refuses to pay.
After the coronavirus forced Houston’s largest party to close for nearly two weeks in early March, rodeo officials believed they were covered by business interruption insurance. However, a lawsuit filed in Harris County District Court on Friday alleged Hallmark Specialty Insurance Company acted badly and in breach of its contract in obtaining more than $ 79 million worth of rodeo “All Risks” coverage US dollars refused.
“I don’t know either side has a slam dunk argument,” said Seth Chandler, a Law Foundation professor at the UH Law Center.
Chandler said one of the top legal questions is whether the virus itself caused “actual physical loss and property damage,” a requirement that triggers coverage on most business interruption policies.
“From an insurance company’s perspective, the fact that a virus is or may be lurking on your property is not a physical loss, fire, or tornado,” said Chandler.
But in the lawsuit, the Houston Livestock Show and the Rodeo argue that the COVID-19 shutdown is just that, “property that has lost its roof to a tornado, hurricane, or fire.” According to the lawsuit, this event led to a “total loss of business income”.
But in similar lawsuits filed across the country, Chandler said many judges ruled in favor of the insurance companies.
“Most of the courts that have looked at this so far have ruled that having a virus on your property will not cause physical harm,” Chandler said.
But the professor said don’t expect a side with a lot of money to go down the line easily.
In a statement, rodeo officials said they hope to resolve the issue soon. A Hallmark Specialty Insurance spokesman said it wasn’t about individual claims about customers, it was just a group of companies that collectively offer insurance coverage under the Rodeo Policy.