Tilman Fertitta is suing insurance companies to cover losses from COVID-19

Houston billionaire Tilman Fertitta has been embroiled in several legal battles arguing that insurance companies owe the business coverage for financial losses caused by the COVID-19 pandemic, and two judges agreed with him.

Earlier this year, several of Fertitta’s businesses — including Landry’s and the Golden Nugget — filed two lawsuits in Louisiana against several insurance companies, alleging that losses incurred from closing the businesses during the COVID-19 pandemic should have been covered by their insurance. When COVID-19 spread across the United States and local governments imposed lockdowns and social distancing restrictions in early 2020, Fertitta laid off 45,000 employees and borrowed $300 million to keep Landry’s afloat. He then offered furloughed workers takeout and put $1 million into a relief fund to support them financially.

In July, two Louisiana state judges granted partial summary judgment in favor of Fertitta’s business, finding without a trial that the businesses were owed coverage.

Houston Rockets owner Tilman Fertitta leaves after discussing the upcoming NBA draft with the press Tuesday, June 21, 2022, at Practice Court Toyota Center in Houston.Yi-Chin Lee/Staff Photographer

According to a spokesman for Fertitta, the insurance companies have requested that the case be heard in Texas and have informed the general counsel that they intend to appeal in Louisiana as well.

Great American Insurance, Lexington Insurance and National Indemnity Company did not respond to a request for comment. Chubb, Axis Surplus Insurance and American Insurance Group declined to comment.

In July 2020, the Houston Rockets – also owned by Fertitta – sued the team’s insurance provider in Rhode Island after the provider refused to cover losses from games that were canceled due to the pandemic.

“The loss of functionality is no less physical than the impact of a property that has lost its roof in a tornado or hurricane,” a Rockets attorney told The Houston Chronicle at the time.

In March 2021, a judge ordered to split Rocket’s multiple claims into separate trials. The case is still pending.

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Louisiana is home to several of Fertitta’s businesses, such as the Golden Nugget Lake Charles casino. The country also has a favorable legal environment for insurance claims against COVID-19. In a separate case in June, a Louisiana appeals court sided with the argument that a restaurant’s exposure to COVID-19 constitutes property damage and should be covered by insurance companies. The 3-2 ruling states that other forms of non-physical damage, such as asbestos and carbon monoxide pollution, are defined as property damage.

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Some of those losses should have been covered by insurance, according to Fertitta’s lawyers and the two Louisiana judges who ruled in their favor.

“As permitted by contract with our insurance companies, we filed suit in Louisiana when our insurance carriers wrongfully refused to honor our policies and claims,” ​​Steve Scheinthal, executive vice president and general counsel of several of Fertitta’s companies, said in a statement . “Louisiana courts reviewed our policies and the law and ruled in our favor that we had insurance coverage.”

Fertitta isn’t the only Houston business owner to take his insurance company to court for not covering pandemic losses. In October 2020, the Houston Livestock Show and Rodeo also said their insured property was damaged after being ordered to close by local and state authorities. That case, filed in Harris County, is still pending.

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