Walt Disney Company Sued by Insurer Over COVID Exposure Claims
When COVID-19 breached the U.S. shores, every business with in-person interaction had to reassess how to proceed without risking disease exposure.
This included the entertainment industry.
Walt Disney Co., the $122 billion entertainment conglomerate, was forced to delay and shutdown film production for a number of film and TV projects in March 2020.
Later in the year, production started anew, but as the virus raged across the country in waves, shutdowns and delays continued.
Disney turned to insurer Fireman’s Fund Insurance Co. for coverage. In the claim, Disney requested up to $10 million to recoup losses from production shutdowns during the pandemic.
Fireman’s Fund denied the claim.
It stated that while it did not dispute claims related to the “first wave” of COVID-19 shutdowns ordered by state and local governments in March 2020, it did believe claims arising from the “second wave” of shutdowns were not under its policy.
These claims occurred, Fireman’s Fund argued, while productions were allowed to resume in California and other filming locales. These second wave delays stemmed primarily from a director being exposed to a “nonessential” worker who tested positive for COVID-19, thus shutting down production for a 14-day quarantine.
Disney countered it was covered under its cast coverage policy, a type of insurance commonly used for Hollywood productions, which indemnifies producers for “any losses or extra expenses to complete principal photography due to the death, injury or illness of any insured artist of director.”
Fireman’s Fund explained that expenses resulting from “covered cast/crewmembers, who were otherwise healthy, being required to quarantine due to exposure to persons who tested positive and/or became infected” are not covered.
Disney has continued to push back.
Scorecard: Fireman’s Fund has filed a complaint against Disney over coverage for production delays. No verdict has been reached.
Takeaway: Even the mightiest felt the constraints of COVID. Companies large and small will continue to push for coverage due to shutdowns, and insurers must be prepared for precedents set by the courts. &