California Court Rules Metallica Can Have its Day in Court Over Pandemic-Related Event Cancellation

The heavy metal band is suing its insurer, Lloyd's of London, after Lloyd's refused to cover losses caused by postponing shows due to the COVID-19 pandemic.
By: | October 13, 2021

The case: When Metallica launched its most recent tour in September 2019 the band had little reason to believe that six of its 8 shows would end up postponed as a result of a global pandemic.

The heavy metal band rocked out during two performances in California in the later half of 2019.

The last six shows were set to be performed in South America in April of 2020, only to be postponed because of the COVID-19 pandemic.

The band filed a claim with its insurer, Lloyd’s of London, under its Cancellation, Abandonment and Non-Appearance Insurance. Lloyd’s denied the claim, citing a virus exclusion in the policy.

Metallica filed a breach of contract suit.

The band argues that while COVID-19 played a role in cancelling its shows, it was not the sole reason performances were postponed. Travel restrictions, local ordinances driven by a desire to flatten the curve and other factors also played a role and some of those reasons constitute a loss under the policy.

Lawyers for Metallica point to the fact that the virus still exists, yet restrictions on social gatherings and travel have been lifted as evidence that factors other than the virus cause the cancellations.

The band also alleges that Lloyd’s conducted no meaningful investigation before denying coverage and therefore cannot identify the proximate cause of the loss.

Lloyd’s filed a demurrer, the equivalent of a motion to dismiss in California. The insurer pointed to the policy’s virus exclusion as reason to dismiss the suit.

Now, the California Superior Court has ruled that it cannot dismiss the lawsuit because  a “proximate cause” of the loss hasn’t been established yet as the case is still in the preliminary stage.

Scorecard: In a win for Metallica, the lawsuit will now proceed to the discovery stages. But it could still be thwarted if the band cannot prove something other than COVID-19 was the proximate cause for the loss.

Takeaway: One of many COVID-19-related event cancellation lawsuits, Metallica’s breach of contract suit is one of the few to allege that something other than the virus is the proximate cause of an insured’s pandemic losses. It will be interesting to see if the lawsuit succeeds and if other insureds adopt the same approach. &

Courtney DuChene is an associate editor at Risk & Insurance. She can be reached at [email protected]

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