TP Racing LLP, which operates Turf Paradise in Phoenix, Ariz., filed a civil lawsuit against American Home Assurance Company last week for what the racing group says is a failure to pay for COVID-related losses covered under the group's insurance policy. The complaint, filed in the U.S. District Court for the District of Arizona, seeks a jury trial for the racing group's claim on its American Home policy, which the company denied in July 2020.
According to TP Racing, the organization maintained a policy with American Home which promised to pay for business income losses, losses caused by loss of property or restriction of access to properties, and interruption of business due to orders of a civil authority. TP Racing's complaint states that the insurance policy does not specifically contain an exemption for viruses or bacteria.
The insurance company has not yet filed a response to the allegations.
Turf Paradise and its affiliated 55 OTBs in Arizona were shut down for various periods throughout 2020 due to the COVID-19 pandemic. Ten of those OTBs closed permanently because they were housed in bars that shuttered. The suit also states that there have been confirmed COVID-19 cases at the track, though it did not specify how many or whether those cases came from track or stable personnel. Once the track could resume racing and OTB operations, it says, it could only do so with drastically reduced capacity, hampering normal business. TP Racing considers that restriction of access to its properties is one of several aspects of the COVID-19 closures that are covered by its policy.
According to the suit, TP Racing filed an insurance claim with American Home in April 2020, referring to policy limits of $2.5 million for accounts receivable coverage, $500,000 in preservation of property coverage, $10 million in extra expense coverage and $1 million in coverage for 30 days' of civil authority action.
In July, the suit states American Home responded, disputing the track's characterization of “direct physical loss or damage to covered property or leased property” and stating that a clause listing exclusions for “pollutants or contaminants” would apply to viruses.
TP Racing filed eight civil counts against the company and is seeking declaratory judgments, damages, attorneys' fees, and interest.
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