Many sporting events have been cancelled due to restrictions on indoor gatherings or teammates testing positive for COVID-19, which has resulted in insurmountable losses for the sports industry, including the National Hockey League (NHL).
However, the NHL is hoping to recuperate some of its losses after it claims their insurance providers failed to make-up the difference, despite an obligation to do so.
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According to The Toronto Sun, the NHL as well as several professional hockey teams have filed a $1 billion lawsuit against a five of their insurance providers for breach of contract. The teams that have joined the lawsuit include – Toronto Maple Leafs, Ottawa Senators, Montreal Canadiens, Winnipeg Jets, and Vancouver Canucks.
The billion-dollar payoff the plaintiffs are hoping to receive may seem like a jaw-dropping amount, but the NHL claims the losses incurred by the league as well as individual teams amass to much more than $1 billion, for which their insurance providers are liable.
The 2019-2020 hockey season was cut short due to the onset of the pandemic – countless games were cancelled, including the 2020 Stanley Cup playoffs, which provides a significant source of revenue for the league and individual teams.
Prior to the 2020-2021 season, which was already slashed in half due to COVID-19 concerns, the NHL reached agreements with its insurance providers that they would receive compensation if the pandemic again resulted in significant losses.
One of the insurance providers named in the lawsuit, Factory Mutual Insurance Company, filed a motion in November to dismiss the case. They argued the plaintiffs haven’t provided sufficient evidence to support their claim of loss of revenue.
Most recently, just last month, the NHL and teams named in the lawsuit filed an objection to Factory Mutual’s move to dismiss.
The other insurance providers named in the lawsuit include Cincinnati Insurance Company, Starr Surplus Lines Insurance Company, Lexington Insurance Company and Federal Insurance Company. However, TSN reports that Cincinnati Insurance Company was removed as a defendant last October.
The outlet notes that it remains unclear why not all NHL teams (like the Edmonton Oilers) are listed as plaintiffs in the lawsuit, though it may be because they didn’t opt for a higher insurance coverage that would cover additional losses incurred by the pandemic.
It’s unknown when the lawsuit will be heard in court, if at all, or if it will be settled privately outside. TheRichest will keep you updated as this story progresses.
Sources: The Toronto Sun, TSN,
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