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Law360 (January 6, 2021, 5:27 PM EST) -- The owners of the Philadelphia Union Major League Soccer team have sued a Chubb unit, alleging the insurer refused to honor its $192 million policy to cover COVID-19-related losses after their athletes caught the virus that physically infested its properties.
The companies that operate the soccer team and its 18,500-seat stadium, Subaru Park, alleged that Federal Insurance Co. breached the insurance contract in a complaint filed Saturday. The companies, Keystone Sports and Entertainment LLC, FC Pennsylvania Stadium LLC and Pennsylvania Professional Soccer LLC, said that they paid over $163,000 in premium for the policy, which does not contain a virus exclusion.
Federal denied coverage in June, asserting that there was no physical damage, a precondition for coverage. The companies said that the insurance carrier did not conduct "any meaningful investigation" and never visited the insured locations.
In early March 2020, the Philadelphia Union reported the first positive COVID-19 case among all Major League Soccer teams after one of its athletes had contracted the virus, according to the suit. Subsequently "numerous Philadelphia Union athletes and staff" tested positive for COVID-19.
The owners shut down the stadium, its practice fields and training facilities after the team suspended all league activities in March due to the pandemic. After it was allowed to reopen, Subaru Park hosted the Philadelphia Union fans in a limited 15% capacity as of October, according to the complaint.
According to the suit, the Philadelphia Union was scheduled to host 18 games but was only able to play nine home games, only five of which were able to host any fans of a limited number of 2,500 or fewer, and the canceled games will not be rescheduled.
"The combined number of fans permitted all season was less than one game's worth of fans in a regular season," the companies said. The stadium hosted less than 10,000 fans in all games combined after reopening, they added.
The companies alleged that their insured space incurred a direct physical loss because their properties lost their function of generating business income due to the pandemic.
The owners said they also incurred significant expenses to sanitize the space, test visitors' and staff's temperatures and maintain social distancing after they were allowed to reopen.
The soccer team and stadium operators are seeking a declaration that the policy covers their losses, that no exclusion in the policy applies to bar coverage and are demanding damages to be determined in a jury trial.
Representatives for the parties could not be immediately reached for comment.
The companies are represented by Robert J. Mongeluzzi, Jeffrey P. Goodman, Marni S. Berger, Samuel B. Dordick of Saltz Mongeluzzi & Bendesky, P.C
Counsel information for Chubb was not immediately available.
The case is Keystone Sports and Entertainment LLC et al. v. Federal Insurance Co. et. al, case number 210100008, in the Philadelphia County Court of Common Pleas.
--Editing by Regan Estes.
For a reprint of this article, please contact reprints@law360.com.
