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NBCUniversal not entitled to coverage for production delays in Israel

NBCUniversal not entitled to coverage for production delays in Israel

NBCUniversal Media L.L.C. units are not entitled to $6.9 million in coverage in connection with a television production’s delays caused by 2014 Hamas rocket attacks in Israel, based on war exclusions in its coverage, according to a recent federal court ruling.

New York-based NBC Universal filed suit against Atlantic Specialty Insurance Co., a unit of Hamilton, Bermuda-based OneBeacon Insurance Group Ltd., in 2016 stating it was entitled to coverage in connection with the production delays for “Dig,” a ten-episode series that was set predominantly in Jerusalem. 

Production on the 90-minute pilot episode began on about June 1, 2014, and was completed on June 26, 2014. The show then went on hiatus. Hamas began launching rockets from Gaza into Israel on July 9, 2014. Two days later, Universal decided to postpone production, which had been scheduled to resume July 20, 2014.

However, after the U.S. State Department warned of a potential escalation in violence, Universal decided to move the production out of Jerusalem and Israel, ultimately completing it in Croatia and New Mexico.

Atlantic had issued a policy to NBCUniversal covering television production losses effective Jan. 11, 2014, to June 30, 2015, according to the initial complaint in Universal Cable Productions LLC, et al. v. Atlantic Specialty Insurance Co.

The insurer initially agreed after the production was first postponed that Universal's losses were covered under the policy's extra expense provision, which provides coverage for “imminent peril,” according to the complaint.

Atlantic subsequently denied coverage, however, on the basis the claim was not covered under the policy's war exclusion, although it agreed to pay six days' worth of postponement costs.

NBCUniversal filed suit against Atlantic, charging breach of contract and breach of the covenant of good faith and fair dealing

“It is not disputed that absent the war exclusions, the claim would have fallen within the policy’s scope of coverage,” said the Oct. 6 ruling by the U.S. District Court in Los Angeles, which was just publicized.

The decision, says, however, that “Applying the word’s ordinary and popular sense, the court has little trouble concluding that the events occurring in Israel and Gaza in the summer of 2014 constituted war.

“The conflict following the June 2014 kidnapping and subsequent murder of three Israeli teenagers entailed rocket fire and mortar shells from Hamas into Israel, airstrikes and a ground operation in Gaza by Israel, and seaborne attacks from both sides.

“In the end, there were substantial casualties on both sides, many wounded, hundreds of thousands displaced, and billions of dollars in damage to infrastructure.

“To be sure, these figures reflect the entire 50-day period of hostilities, which continued for over a month after the Dig production was moved out of Israel.

“However, these numbers give a sense of the degree of violence, which indisputably began, and continued to escalate, prior to the decision to relocate. Such a conflict easily would be considered a ‘war’ by a layperson,” said the ruling, in granting Atlantic summary judgment in the case.



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