Tribal governments turned to insurance to bridge the financial gap left when Oklahoma's tribal casinos abruptly closed due to the COVID-19 outbreak.
However, the Cherokee Nation's insurance policy's fine print does not cover revenue lost as a result of a worldwide pandemic, according to a test case determined this month by Oklahoma's top court.
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The 6-3 decision overturns a lower court's judgement and establishes a new standard for COVID-19 insurance disputes in Oklahoma, including other related challenges brought by other tribal communities. Businesses and charities have also filed lawsuits to recover insurance costs for lost earnings.
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According to Tom Baker, who keeps track of state judgements and teaches insurance law at the University of Pennsylvania, insurance regulations varied from one state to the next, thus the issue of how to handle an unexpected pandemic has caused courts to reach diverse conclusions.
In the end, Baker claimed, "This was a subject that was open under the law of all the states."
Because the Cherokee Nation case was the first to reveal the ruling of Oklahoma's highest court, it attracted a lot of attention. According to the state Supreme Court, the northeast Oklahoma tribe's casinos "did not experience any actual, tangible deprivation or damage to the property" that would have justified insurance benefits for lost revenue.
The Sept. 13 decision stated that "this court cannot rewrite the policy and enhance coverage for losses that are outside the plain and unequivocal provisions of the insurance contract."
The Cherokee Nation Attorney General Sara Hill's office released a statement on its behalf stating that the tribe is studying the decision.
According to the statement, "The Cherokee Nation filed a lawsuit against these insurance companies to recover costs suffered during the COVID-19 outbreak." Being responsible stewards of the Cherokee people's tribal funds is important to our work.
Because the court combined their related lawsuits with the one brought by the Cherokee Nation, the decision also had an impact on the Muscogee and Choctaw nations.
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The largest tribe in Oklahoma, the Cherokee Nation, runs multiple casinos, including the Hard Rock Hotel & Casino close to Tulsa. In March 2020, it stopped all gambling operations for a period of time.
The tribe argued that because COVID-19 rendered the premises useless, this amounted to a direct physical loss under its policy, and so the insurers should pay the financial losses from the shutdowns.
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The largest tribe in Oklahoma, the Cherokee Nation, runs multiple casinos, including the Hard Rock Hotel & Casino close to Tulsa. In March 2020, it stopped all gambling operations for a period of time.
The tribe argued that because COVID-19 rendered the premises useless, this amounted to a direct physical loss under its policy, and so the insurers should pay the financial losses from the shutdowns.
According to Baker, one of the two main strategies employed in comparable litigation across the nation is the one advanced by the Cherokee Nation. The other is that actual physical harm caused by contact with COVID-19 qualified as insurance-covered property damage.
It's unclear if any tribe from Oklahoma will be able to use that defence in upcoming court cases. Messages left for attorneys at the Oklahoma City legal firm Whitten Burrage, which has filed almost all of the cases on behalf of tribes, went unanswered.
Federal aid has been the largest financial resource available to assist tribal countries in recovering from COVID-19 and its severe effects on Native communities because insurance is not available to fill the gap.
