Broadway Theater Operator Attempts to Recoup from Insurer Monies Lost During COVID-19 Shutdowns
On March 12, a statewide order in New York prohibited gatherings of more than 500 people, effectively shutting down all 41 Broadway theaters in NYC. One operator, Jujamcyn Theaters, which operates five Broadway houses, balked.
Its successful musicals, “Hadestown,” “Moulin Rouge: The Musical” and Disney’s “Frozen” all had to cease production during the growing COVID-19 pandemic. By July, Jujamcyn estimated it might be in line to lose $29 million in box office revenue by year’s end.
It looked to its insurers for restitution.
Covered under a business income loss policy through Federal Insurance Company, Jujamcyn filed a claim. But the theater was soon denied.
Under a second policy through Pacific Indemnity Company, Jujamcyn tried again. This time, the theater operator received what it felt was a fraction of what it was owed.
Scorecard: This suit is in its early stages, but it is not alone. As businesses grapple with the pandemic, so too will insurers with growing business interruption-related litigation.
Takeaway: Now is the time for insurance companies to reflect on the best next steps moving forward. If another Black Swan-esque pandemic were to arise, can the industry continue to hold out? Or will the courts have to decide? &