Insurer sues Disney over $10M in pandemic production costs
The lawsuit contends that Disney's insurance policies do not cover certain film and TV production delays caused by COVID-19.
The latest high-profile lawsuit stemming from pandemic-related insurance claims targets the conglomerate behind the “happiest place on Earth.”
Walt Disney Co. faces a lawsuit from its insurer, which claims the entertainment company’s insurance policies do not cover certain delays of film and TV productions caused by the COVID-19 pandemic.
On July 1, Fireman’s Fund Insurance Co. filed a complaint in Los Angeles County Superior Court, asking the court to rule in the dispute over the claims that include $10 million in coverage for delays that came after productions were permitted to begin again.
Fireman’s Fund contends that to the extent that Disney incurred extra expenses as a result of covered, otherwise healthy, cast and crew members required to quarantine due to exposure to others who had tested positive for COVID-19, there is no coverage under a policy called “cast coverage.”
However, Disney argues that coverage is available for “second wave” claims under the civil authority coverage in the policy.
A description of “second wave” claims in the complaint states: “After several months, the shutdown orders were gradually modified, allowing production to resume. However, various jurisdictions imposed requirements, including, for example, frequent testing and quarantining of cast and crew in the event of exposure. The restrictions have led to more shutdowns, more expenses and more claims.”
Fireman’s Fund disputes that, saying that civil authority coverage is not triggered by orders requiring things like testing or quarantining but only by orders revoking permission to use or prohibiting access to facilities used in an insured production.
Fireman’s Fund then argues that imminent peril coverage is no longer applicable because the peril (the pandemic) is no longer imminent as it arrived in 2020. Fireman’s Fund then states that “if the peril is not the pandemic itself but is, instead, the imminent risk of infection that the imminent peril coverage was not intended to apply where a producer i.e. TWDC (the Walt Disney Company) intentionally puts the cast and crew in harm’s way by continuing production in the face of a peril that must, by definition, be imminent and of such probability and severity that it would be unreasonable or unconscionable to ignore.”
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