Life Insurance

LA Fitness operator sues 11 insurers for $500 million

Gym chain LA Fitness is suing its insurers, claiming that the carriers should pay $500 million in COVID-19-related losses after over 1,200 of its employees contracted the coronavirus.

Fitness International LLC, the operator of the gym chain, named 11 insurers in its lawsuit – including Zurich American Insurance, Travelers Property Casualty, and AIG Specialty Insurance – alleging that they wrongfully denied coverage, as well as failed to acknowledge that the virus “physically damaged” its properties.

The lawsuit was filed in King County Superior Court, Law360 reported.

The gym owner claimed that the fact that over 1,200 staff members tested positive for COVID-19 is direct proof that the virus caused physical damage, and was “deposited” on the surface of exercise equipment and spread via the air and ventilation systems. Fitness International additionally suggested that given the high number of asymptomatic cases among its employees, the actual number of infected could have been even greater.

“The coronavirus has and continues to physically alter and transform these surfaces into virus-spreading fomites,” Fitness International’s complaint said, which added that “no amount of routine surface cleaning could remove the aerosolized coronavirus suspended in the air in Fitness’s health clubs.”

Fitness International also alleged in its lawsuit that its primary insurer, Zurich, specifically removed “virus” from that policy’s contamination exclusion through a “virus deletion endorsement” when the insurer issued the Zurich Edge policy – a policy which had promised broad and flexible coverage, the complaint said.

The lawsuit comes after LA Fitness filed a separate lawsuit against Beazley Underwriting, seeking $100 million for business interruption losses. Law360 reported that Beazley had issued LA Fitness with a $500 million policy, and that the insurer argued in court that the gym chain suffered no direct physical loss of or damage.

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