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Fireman’s Fund Insurance Co. last week sued The Walt Disney Co. over the extent of COVID-19 business interruption claims the insurer must pay the entertainment giant.
According to the suit filed in state court in Los Angeles, Disney said it is entitled to business interruption coverage under a motion picture/television producers portfolio policy issued Oct. 1, 2019, which includes coverage for suspension of operations due to orders from a civil authority.
The lawsuit in, Fireman’s Fund Insurance Co. v. the Walt Disney Co. et al., divides the claims into three categories: “First Wave Claims,” “Second Wave Claims,” and “Holiday Hiatus Claims.”
The lawsuit said first wave claims, which arose as film and television productions shut down beginning in March 2020, have been or are in the process of being resolved under the policy’s civil authority coverage, but Disney and the insurer disagree on whether other coverages are applicable.
The second wave claims reflect the period several months later when shutdown orders were gradually modified, allowing production to resume, but with several jurisdictions imposing requirements such as frequent testing and quarantining of cast and crew in the event of exposure, according to the suit.
The lawsuit says this led to more shutdowns, expenses and claims that amount to about $10 million in claims. Disney and Fireman’s Fund disagree on whether coverage is available under its coverage’s cast and “imminent peril” provisions.
The third category, holiday hiatus claims, relates to the period around Christmas and New Year when public health authorities in Los Angeles, Atlanta and London urged but did not order Disney to extend the holiday hiatus for an additional one to two weeks. Disney contends coverage is available for these claims under its civil authority coverage.
The lawsuit seeks a declaratory judgment as to Fireman’s funds’ rights and obligations.
Allianz said in a statement, “We are unable to comment on details of individual claims settlements or pending legal matters. We have closely engaged – and continue to engage – with our long-standing customer Disney to settle all valid COVID-19 claims quickly and fairly. We regret we have not yet reached a mutual agreement on a minority of these claims relating to the second wave of COVID-19, but hope this matter can be resolved promptly with the Court's intervention.”
More insurance and risk management news on the coronavirus crisis here.