Live Nation is suing their insurance company, Factory Mutual, for refusing to cover hundreds of millions of losses caused by the coronavirus pandemic. The lawsuit was filed in California federal court on January 29 as a result of the insurer refusing to honor their premium insurance policy, which specifically designates “communicable diseases” as a covered cause of loss, according to Live Nation’s outside counsel Marc D. Halpern. Live Nation purchased the premium policy on June 1, 2019 for coverage through June 1, 2020.
Live Nation is not the only entity suing Factory Mutual. A growing group of companies, including Ralph Lauren, New York University, and the Atlanta Falcons, are suing over Factory Mutual’s refusal to pay out claims on its Global Advantage All-Risk property insurance policy. The section of the policy in question specifies that while “communicable diseases” are a covered cause of loss, “pathogens, viruses, or other disease causing agents” do not fall under coverage. The suit notes that the policy’s intention is “meant to protect the insured against all risks of loss, whether known or unknown.”
Suits have been widespread following the devastating economic impact of the pandemic on many industries. Some of these suits will likely influence the insurer’s defense, which could point to the fact that the provision on property loss and damage only applies to physical damage and not losses caused by mandated closures. In response to this fact, Live Nation has already pointed to more than half a dozen other potential coverage areas in the policy. These includes time element coverage, which insures against losses caused by “the inability to put property to its normal use” and “Civil or Military Authority coverage,” which protects against losses caused by limitations placed on the company by civil or military leaders.
Factory Mutual has consistently taken the position that it will deny nearly all coverage sought by its policyholders for COVID-19 losses. As a result, Live Nation currently seeks declaratory relief in its proceedings.
Featured image: Jen O’Neill