Arch Insurance, Red Sky Hit with Class Actions Seeking Ikon Ski Pass Refunds for COVID-19-Shortened Season

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Two nearly identical proposed class action lawsuits have been filed against Arch Insurance Company and Out of Towne, LLC (doing business as Red Sky Travel Insurance) over the insurers’ alleged refusal to issue refunds to policyholders unable to use their Ikon ski passes due to COVID-19-related resort closures.

The plaintiffs in each suit say they purchased Ikon passes in exchange for access to resorts owned and operated by Alterra Mountain Company and its partners during the 2019-2020 ski and snowboarding season. To ensure they would receive a refund in the event they were unable to use their passes, the plaintiffs paid an additional fee for pass insurance underwritten and administered by the defendants, the cases say.

According to the suits, Alterra announced on March 14, 2020 that it was closing its resorts and suspending operations until further notice in response to the COVID-19 pandemic. As a result of the closures and government orders mandating citizens stay home, the plaintiffs were unable to access Alterra’s resort properties that they otherwise would have been able to visit pursuant to their Ikon passes, the lawsuits state.

Though each plaintiff submitted a timely insurance claim under his individual Red Sky policy, the defendants denied the consumers’ claims, stating that one plaintiff’s policy “does not provide coverage for facility closures” while the other’s “does not cover every circumstance,” the lawsuits allege.

The complaints argue that the plaintiffs’ Red Sky policies, which are “materially the same” as all policies issued to proposed class members, purport to provide coverage for losses caused in the event a policyholder is quarantined, among other occurrences. While the policies fail to define “quarantined,” the cases say the term is generally defined as “to isolate from normal relations or communication,” and “a restriction on the movement of people and goods which is intended to prevent the spread of disease or pests. It is often used in connection to disease and illness, preventing the movement of those who may have been exposed to a communicable disease, but do not have a confirmed medical diagnosis.”

Per the complaints, the policies, which contain no exclusions for viruses, pandemics, or related government orders, provided coverage for the plaintiffs and proposed class members’ losses that the defendants have unlawfully refused to pay.

“Plaintiff and other purchasers of Defendants’ pass insurance are entitled to coverage as a result of their restriction from resorts due to the COVID-19 pandemic, but Defendants have failed to make payment without just cause or excuse,” the lawsuits state.

At least two other lawsuits have been filed against Alterra Mountain Company itself by pass holders in search of refunds after the ski season was cut short by the COVID-19 outbreak.

ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.

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