Organizers of the North American International Auto Show in Detroit filed a lawsuit Thursday against suing its insurance company for $2.4 million.
NAIAS LLC, the holding company for the auto show organized by the Detroit Auto Dealers Association, filed the suit in U.S. District Court alleging a breach of contract and bad faith from the insurance provider, Texas-based Houston Casualty Co., for not paying out its full coverage after the organizers canceled the June 2020 auto show due to the COVID-19 pandemic.
Houston Casualty paid out $2.4 million in December 2020 then another $878,938 on Wednesday of the roughly $5.6 million policy, the auto show's lawyers said in the lawsuit obtained by Crain's.
"In early 2020 when the pandemic hit, the NAIAS was canceled by a government mandate that the TCF Center, where the show is held annually, would be used for a field hospital for COVID-19 patients," Rod Alberts, executive director of the show, said in a statement. "For the health and safety of our community, it was the right call. Unfortunately, some of the coverages and assurances that we put in place have not been met and we had no choice but to pursue legal action."
DADA announced the cancellation of the auto show on March 28 and the field hospital to handle COVID-19 overflow patients was reported a day later.
Organizers allege the insurance company's denial of certain payouts is a material breach of contract and that "NAIAS has suffered damages and will continue to suffer damages as a direct result of (Houston Casulty's) material breaches of the ... event cancellation policy," the court filing states.
The auto show paid a $14,483 premium on the policy, according to court records, presumably a monthly charge for an annual total of $173,796 plus fees.
The show's organizers are facing financial stress due to pandemic after canceling the 2021 auto show. In January, Alberts told the governing board of TCF Center this year's show, originally planned for September, had to be canceled because of the financial risk of the virus upending another event like the June 2020 show that got canceled.
For now, Alberts and team are planning for the return of the Detroit auto show for September 2022, 32 months after the last auto show was held in the city in January of 2019.
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March 12, 2021 at 06:55AM
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Detroit auto show organizers file $2.4 million suit against insurance provider - Crain's Detroit Business
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