Last week in California federal court, ViacomCBS sued over Covid-19 Coverage Denial. The mainstream media giant alleges Great Divide Insurance Co. reneged on its coverage agreement by refusing to cover business losses. The Covid-19 pandemic forced Viacom to delay or cancel production of its television shows and live events.
ViacomCBS produces television programming for children such as “Yellowstone” and “Younger,” along with live events like “Nickelodeon Kids’ Choice Awards.” The lawsuit complaint states that ViacomCBS bought an insurance policy from Great Divide (a subsidiary of W.R. Berkley Corp.) to protect against losses from production disruptions.
ViacomCBS said that beginning in March 2020, the pandemic delayed or postponed principal photography on more than 100 television productions. The complaint says the company suffered substantial financial losses.
Great Divide, however, refused to pay the coverage. As a result, ViacomCBS pushed back, arguing that Great Divide had interpreted the policy in “an overly narrow and wrongful manner.” Then, to add injury to injury, according to the complaint, instead of continuing the policy per the existing contract, Great Divide said it would continue the contract only if it included an exclusion for losses related to Covid-19.
ViacomCBS Policy had no virus exclusion
While Great Divide has had an insurance industry standard form exclusion for certain losses caused by viruses and bacteria since 2006, ViacomCBS said that exclusion was not part of its own insurance policy. The policy provides $30 million of cast coverage, $10 million of extra expense, $10 million for imminent peril coverage, $1 million in civil authority coverage, and $1 million in ingress and egress coverage, the suit states.
“Great Divide did nothing in selling the policy to limit its liability for virus- or pandemic-associated risks,” ViacomCBS said. “Nor did Great Divide warn ViacomCBS that even though it did not include a virus or pandemic exclusion, it would interpret the policy as if it contained one.”
Breach of Contract Charged
The lawsuit includes claims of breach of contract and seeks declaratory relief to have the policy renewed without any amendments. It also seeks coverage for losses on production, as well as damages and attorney fees. In addition, other companies are also pursuing lawsuits against their insurance companies for refusing to pay for COVID-19 losses.
More Business Interruption Insurance Lawsuits Filed
- Hotel operator Procaccianti sued its insurer, Zurich American, in December 2020 for failing to cover losses it incurred following Covid-19 shutdown orders. Zurich says that policy excludes virus coverage.
- A Pennsylvania hotel said its lockdown losses caused by Gov. Tom Wolf’s orders should be covered by Westfield Insurance Co., which has refused to pay.
- A movie theater chain, Cinemark Holdings Inc., has filed suit against Factory Mutual Insurance Co. for more than $400 million in unpaid Covid-19 business interruption claims.
- Owners of the Philadelphia Union Major League Soccer team sued Chubb unit Federal Insurance Co. in Jan. 2021. The suit says the insurer refuses to honor a $192 million policy to cover Covid-19 losses.
Virus Exclusion Cases Tossed
Judges have routinely tossed out most cases filed in which the coverage indicated the insurer would not cover events involving a virus. Last month, a judge in London rejected a café owner’s lawsuit for losses caused by forced closure over the so-called pandemic. That judge awarded the insurer’s costs of defending itself in the suit.
This month, a Florida federal judge rejected a Miami catering company’s lawsuit against Scottsdale Insurance Co., which refused to pay for Covid-19-related losses. Elsewhere in Florida, a judge threw out a Miami restaurant chain’s lawsuit against Aspen Specialty Insurance Co. for Covid-related losses. Aspen also won a case in Texas earlier this month when a federal judge threw out a dentist’s business interruption lawsuit.
ViacomCBS v. Great Divide
ViacomCBS sues Insurer over Covid-19 Coverage Denial, the case is ViacomCBS Inc. v. Great Divide Insurance Co., case number 2:21-cv-00400, in the U.S. District Court for the Central District of California.