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Law360 (May 14, 2021, 8:06 PM EDT) -- A bowling alley owner struck an AIG unit and three other insurers with a $50 million New York state suit, alleging they shouldn't spare any coverage for losses from the presence of the coronavirus and government orders forcing closures of its more than 300 locations.
Bowlero Corp. alleged it is covered by AIG Specialty Lines Insurance Co. and others for losses at its bowling facilities — which also feature arcades and serve food and drinks — exceeding hundreds of millions of dollars. The owner said in Thursday's filing that it closed on-site restaurants and bars across several states, including New York, under pandemic shutdown orders.
The coronavirus caused a "direct physical loss, damage or destruction" to the properties, Bowlero said.
"The presence of SARS-CoV-2 in a building's airspace and on or around property results in direct physical loss, damage, and/or destruction to property because it causes a distinct, demonstrable, physical alteration to property, and poses an imminent and severe risk to human health," the owner said.
Bowlero argued the coronavirus itself caused an imminent loss covered by the insurers. The potential danger of COVID-19 in indoor entertainment centers is significant, the owner said, noting its bowling facilities serve more than 28 million visitors each year, often in large gatherings.
"The insurers were repeatedly warned over the years of the potential impact of pandemics," Bowlero said. "There were many publicly available reports about the risks of pandemics and what insurers should do, in the months and years before the outbreak of the COVID-19 pandemic."
But AIG, Everest Indemnity Insurance Co., Landmark American Insurance Co. and Starr Surplus Lines Insurance Co. are taking a corporatewide position to refuse coverage for pandemic-related losses, according to the suit. Bowlero said the insurers knew of the risks but didn't include a virus exclusion.
"Given the manner in which SARS-CoV-2 lingers in the air and on surfaces, and its manner of transmission and the government's desire to 'flatten the curve,' the insured locations were not capable of being used for their essential functions," Bowlero added.
Representatives for the parties didn't immediately respond to requests for comment Friday.
Bowlero is represented by Peter A. Halprin, Jeffrey L. Schulman and Stephen Wah of Pasich LLP.
Counsel for the insurers wasn't immediately available.
The case is Bowlero Corp. v. AIG Specialty Lines Insurance Co. et al., case number was not available, in the Supreme Court of the State of New York, County of New York.
--Editing by Leah Bennett.
For a reprint of this article, please contact reprints@law360.com.
