MGM Resorts Sues Zurich After Insurance Company Balks at Paying Casino Operator’s Legal Bills

Posted on: June 20, 2019, 09:08h. 

Last updated on: June 20, 2019, 10:57h.

MGM Resorts International is suing Zurich American Insurance Company for breach of contract, claiming the insurance provider is not fulfilling its contractual obligation to cover the casino operator’s legal bills stemming from the October 2017 mass shooting at the Mandalay Bay in Las Vegas.

Mourners hold a candlelight vigil a week after the 2017 Mandalay Bay shooting. MGM Resorts is suing an insurance company, alleging breach of contract. (Image: Drew Angerer / Getty Images)

MGM’s litigation against Zurich American is not related to gaming company’s settlement with victims and family members of those that perished in the shooting. It is expected that MGM could pay out up to $800 million to settle claims stemming from the worst mass shooting in US history.

Rather, MGM’s suit against Zurich American is derived from the Mandalay Bay owner’s claims that the insurance provider is not picking up the tab for its legal fees as it is supposed to do under the terms of MGM’s coverage policy.

In a suit filed in US District Court, District of Nevada, MGM Resorts International, Mandalay Bay, LLC, Mandalay Bay Resorts Group, MGM Festival Grounds, LLC and MGM Resorts Venue Management, LLC are pursuing litigation against Zurich American for “for breach of contract, declaratory relief, tortious breach of the implied covenant of good faith and fair dealing (bad faith) and violation of Nevada’s Unfair Claims Settlement Practices Act.”

Show MGM The Money

MGM asserts Zurich American, a unit of Swiss insurance giant Zurich Insurance Group, has yet to repay the gaming company’s litigation costs.

The insurance company sold MGM a commercial general liability policy for a coverage period of July 1, 2017 to July 1, 2018, according to the court filing. The policy features what is known as self insured retention or “the SIR Endorsement.”

“The Zurich Policy is designed and intended, and reasonably was expected by MGM, to provide broad coverage for the most serious claims that MGM could face,” according to suit.

Under the terms of the policy, MGM is liable for $500,000 in defense costs and “subsequently Zurich must pay for all of MGM’s Defense Costs, including Supplementary Payments, until such time as Zurich exhausts the limit of liability by paying settlements or judgments.”

Defense costs range from court fees, attorneys fees, medical exams, summonses, process serving, transcription of records, investigative services and dispute resolution, among others.

This dispute does not relate to coverage for a potential settlement and is limited to Zurich’s obligation to pay defense costs in this matter,” said MGM in a brief statement emailed to

No Impact

MGM has reported $751 million in coverage through multiple insurance providers, so its dispute with Illinois-based Zurich American has no impact on the casino operator’s ability to pay claims related to the October 2017 tragedy.

The Bellagio and Mirage owner said that following the shooting, under the terms of its policy with Zurich, it swiftly assembled a “competent defense team” and notified the insurance carrier of the events, but due to the gravity of the situation, MGM’s $500,000 SIR rapidly evaporated.

In the suit, MGM contends it fulfilled all of its obligations following the shooting, but also claims Zurich isn’t holding up its end of the bargain.

More specifically, “Zurich has failed to pay for all reasonable Defense Costs, including substantial amounts due to retained attorneys, expert witnesses, consultants and other vendors that Zurich specifically approved,” said MGM in the court filing.