Natural History Museum Sues Insurance Carrier Over COVID Coverage

UPPER WEST SIDE, NY — The American Museum of Natural History is suing its insurance provider, which it claims refused to cover the business losses sustained as a result of the COVID-19 pandemic.

The Upper West Side museum filed the lawsuit Friday against the Affiliated FM Insurance Company (AFM), which is a commercial property insurance company.

The museum pays "hundreds of thousands of dollars" a year in exchange for an "all-risk" property insurance policy, according to court documents.

Affiliated FM Insurance Company did not immediately respond to Patch's request for comment.

"Shortly after its closure, the Museum gave notice to its insurer, Defendant AFM, of its business interruption losses," the lawsuit reads. "The Museum explained that COVID-19 had spread to the Museum and surrounding areas and that a number of Museum employees and contractors had tested positive for the virus. The Museum timely sought coverage under the Policy for its business interruption losses.

Weeks later, without performing any meaningful investigation into the nature of the Museum’s losses, AFM indicated that it would deny coverage under nearly all of the Policy provisions invoked by the Museum."

AFM officially denied almost the entirety of the museum's claims on April 1, 2021.

According to the lawsuit, the insurance company offered a maximum recovery fee of $200,000, a "fraction of the Museum's losses."

The American Museum of Natural History closed its doors on March 13, 2020, due to the coronavirus. It remained closed for nearly six months and then reopened under significantly reduced capacity.

"The Museum lost millions of dollars as a result of its six-month closure, and it has continued to experience losses since its limited reopening," according to the court documents.

The lawsuit, filed in state court, will in some way center around the definition of "all-risk" insurance, and add another example to the growing list of businesses and insurance companies debating on how much the latter party is responsible for COVID-19 related losses.

The American Museum of Natural History declined to comment about pending litigation.