After reaching a settlement with the ticket holders, SXSW looked to its insurer Federal Insurance Co., which denied the claim and pointed to a professional services exclusion in its policy which stipulated that in such circumstances, the insurer was not obliged to cover any legal fees. SXSW filed suit against the insurer. (Credit: Jack Plunkett/AP)
The U.S. District Court for the Western District of Texas, Austin, has deemed an insurer not responsible for 2020 event cancellation and ticket refunds.
In 2020, the South by Southwest (SXSW) annual music festival was canceled due to the COVID-19 pandemic. Festival officials canceled that year's planned event and allowed ticket holders the option to defer 2020 tickets to any festival season between 2021-2023. Some ticket holders argued they should have been offered a cash refund option instead, but in the U.S., ticket buyer rights are governed by state statute, so decision makers at SXSW were under the impression that they were within their rights in offering a replacement ticket. In response, ticket holders filed a class-action lawsuit against SXSW, alleging breach of contract, unjust enrichment, and conversion.
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