ViacomCBS filed a suit in California federal court on Thursday, January 14, 2021, alleging Great Divide Insurance Co. reneged on its coverage agreement by refusing to protect the media giant from losses when it was forced to delay or cancel production for its television shows and live events due to the COVID-19 pandemic,
Law360 is reporting.
When the COVID-19 (coronavirus) pandemic hit in March 2020, ViacomCBS said it delayed principal photography on more than 100 television productions and was forced to postpone productions, like the
2020 Kids' Choice Awards. As a result, the company suffered substantial financial losses, according to the suit.
But when it turned to Great Divide for payment, ViacomCBS said the insurance company interpreted the policy in "an overly narrow and wrongful manner" and refused to cover various losses. And instead of continuing the policy, as required under the agreement, for its third annual period, Great Divide only offered to continue it if an exclusion was included for losses related to COVID-19, according to the complaint.
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 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."
The suit 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.
Counsel for ViacomCBS did not immediately respond to a request for comment Friday and a representative for Great Divide could not be immediately reached for comment.
ViacomCBS is one of several companies to go after its insurance company for not paying out on COVID-19 losses. Last month, hotel operator Procaccianti sued insurer Zurich American for failing to cover losses it incurred during state-mandated COVID-19 shutdown orders, while Zurich hit back saying its policy expressly excludes viruses as a covered cause of loss.
That same month, a Pennsylvania hotel said its losses from pandemic measures ordered by Gov. Tom Wolf should be covered by Westfield Insurance Co., while movie theater chain Cinemark Holdings Inc. is seeking more than $400 million from Factory Mutual Insurance Co. for unpaid COVID-19 business interruption claims.
Meanwhile, the owners of the Philadelphia Union Major League Soccer team this month sued Chubb unit Federal Insurance Co., alleging the insurer refused to honor its $192 million policy to cover COVID-19-related losses after their athletes caught the virus that affected its properties.
But judges have also recently been tossing these kinds of cases out left and right.
A London judge in December rejected a cafe owner's pursuit of Allianz for losses caused by the forced closure due to the pandemic, instead awarding the insurer's costs.
And just last week, a Florida federal judge tossed a Miami catering company's lawsuit seeking to force Scottsdale Insurance Co. to pay for COVID-19-related losses, while another Florida judge rejected a Miami restaurant chain's lawsuit seeking to compel Aspen Specialty Insurance Co. to cover its losses. A Texas federal judge shot down a dentist's suit seeking coverage from Aspen.
ViacomCBS is represented by Kirk Pasich, Anamay M. Carmel and Caitlin S. Oswald of Pasich LLP.
Counsel information for Great Divide was not immediately available.
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.
Insurer Countersues ViacomCBS Over COVID-19 Coverage
Law360 (March 15, 2021, 8:19 PM EDT) -- Great Divide Insurance Co. has countersued ViacomCBS in California federal court, alleging the media conglomerate "prematurely" brought a COVID-19 business interruption lawsuit against it after ViacomCBS failed to cooperate in its claim investigation.
The insurance company said Friday that Viacom did not provide requested documentation relating to its insurance claim, but sued Great Divide when the carrier was still investigating its claim and trying to figure out the details of its alleged loss.
In January, ViacomCBS claimed Great Divide reneged on its coverage agreement by refusing to protect the media giant from losses when it was forced to delay or cancel production for its TV shows and live events because of the COVID-19 pandemic.
ViacomCBS, which produces shows including "Yellowstone" and "Younger" as well as live events like the "Nickelodeon Kids' Choice Awards," said in its suit that its policy with Great Divide, a subsidiary of W. R. Berkley Corp., 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.
When the pandemic hit in March 2020, ViacomCBS said it delayed principal photography on more than 100 TV productions, was forced to postpone shows and suffered millions of dollars of losses. The media company alleged Great Divide also insisted on adding a COVID-19 related exclusion into the policy for its third policy year.
On Friday, Great Divide said it has every right to review rates and revise the policy at the end of the second policy year as the insurance contract clearly stated. The carrier also asked the court to declare the policy's "loss of market or use" exclusion applies and the insurance does not cover business interruption unless it was caused by "direct physical loss."
Viacom's policy potentially covers extra costs the media company spent to avoid a covered loss instead of all COVID-19 related losses such as production costs before and during the pandemic, Great Divide said. But Viacom never fully provided information to show how much it has increased spending following its alleged loss, the insurer added.
The carrier said it has asked for information on all TV shows for which Viacom sought coverage for losses, and while the entertainment company has provided some, it did not do so for others.
For example, the insurer said, Viacom has not sent information about "Rich Kids Go Skint," a reality show featuring one 18-to-25-year-old "rich kid" living with a more modest family to show lifestyle differences, and "The Other Two," a Comedy Central series to be aired on HBO Max about a brother and sister struggling with their feelings about their 13-year-old brother's rise to fame.
Great Divide is seeking a declaration that it is not obligated to cover all of Viacom's pandemic-related losses, that Viacom failed to show proof of immediate danger as requested, and that it properly renewed the insurance.
Representatives for the parties could not be immediately reached for comment on Monday.
ViacomCBS is represented by Kirk Pasich, Anamay M. Carmel and Caitlin S. Oswald of Pasich LLP.
Great Divide is represented by Linda W. Hsu of Selman Breitman LLP.
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.
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Originally published: Saturday, January 16, 2021.
