United Talent Agency is suing its insurers over their denial of pandemic-related coverage without doing a meaningful investigation of its claims — and says it stands to lose more than $150 million because of COVID-19 shut downs.
“At least 13 UTA employees, five spouses, and some of their dependents have tested positive for COVID-19,” writes attorney Kirk Pasich in the complaint. “As a result of the presence of SARS-CoV-2 and the Closure Orders, UTA suffered losses from cancelled live events — including cancelled tours by Guns N’ Roses, Post Malone, Toby Keith, Pitbull, Burna Boy, Monsta X, and 3 Doors Down — and cancelled television and motion picture production. UTA currently estimates that its financial losses, including lost profits, lost commissions, and lost business opportunities, approximate $150,000,000, and are continuing.”
UTA is suing Vigilant and Federal insurance companies for breach of contract and tortious interference. Pasich argues that Vigilant and Federal’s parent company Chubb National Insurance has “adopted a universal practice of denying coverage for all business interruption claims” associated with the pandemic. (Pasich in September filed a complaint against Chubb over coverage issues on Ben Affleck-led Hypnotic.)
“There is no merit to Vigilant and Federal’s position that their policies do not insure the losses that UTA has suffered and is suffering,” writes Pasich in the complaint, which was filed Friday in L.A. County Superior Court. “Vigilant and Federal have known for decades that the phrase ‘direct physical loss or damage to property’ extends to damage or loss caused by the presence of a hazardous substance in the airspace inside a building or on property, and losses that result when the use or function of property is substantially impaired, even if the property has not been physically altered.”
Further, UTA argues that the companies are aware pandemics present substantial risk and have often included an exclusion in policies that either limits or bars coverage for such losses. Pasich notes as evidence Chubb’s Dec. 2019 10-K filing with the SEC that states “we have substantial exposure to losses resulting from … catastrophic events, including pandemics.”
Writes Pasich, “As these disclosures show, instead of warning their insureds, including UTA, that their policies would not cover pandemic-associated losses, Vigilant, Federal and other members of the Chubb group of insurance companies warned the public and their shareholders that the amounts they might have to pay for such losses could affect their financial condition.”
The agency also says its policies provide additional coverage for “civil authority,” which requires Vigilant and Federal to pay its business income loss and extra expense incurred due to the impairment of its operations directly caused by the prohibition of access to its premises, or a dependent business’ premises, by a civil authority.
UTA is asking the court for a declaration that it is entitled to coverage under its policies and is seeking punitive damages.
Chubb previously told The Hollywood Reporter it does not comment on pending litigation.
This post was originally published by The Hollywood Reporter.