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Live Nation sues insurer over failure to cover loss of cancelled events

Live Nation is suing insurer Factory Mutual in California over its refusal to pay out over events cancelled due to the COVID-19 pandemic.

The entertainment giant filed a lawsuit in the US District Court for the Central District of California claiming the insurer – which trades as FM Global – failed to acknowledge coverage and pay amounts owed for property damage and business interruption losses.

While it does not enter a monetary value for the amount it believes it is owed by FM, Live Nation details the cancellation or postponement of more than 10,000 events between March and September 2020. Those events would have generated approximately 37 million ticket sales, it said.

Live Nation explained it had previously secured “at significant expense” the premier version of an all- risk property insurance policy, FM Global Advantage Policy. It said this policy specifically designates communicable disease as a covered cause of loss, and provides various coverages and extensions with significant policy limits for the many categories of losses that may result from communicable disease and its impacts.

Live Nation said FM has thus far failed to acknowledge or provide any coverage, and has decided to narrowly interpret or altogether deny coverage for COVID-19 claims under its FM Global Advantage policies.

“While the policy limits are insufficient to cover all of Live Nation’s losses in the extreme pandemic that has burdened much of the world these last ten months, with the FM Global Advantage Policy Live Nation purchased substantial financial protection against this exact situation,” Live Nation said.

“That is, the scenario where a covered peril has caused a catastrophe with widespread impact on Live Nation’s venues and other properties, as well as properties immediately adjacent to its venues, and throughout the Live Nation community of employees, artists, fans, customers, and suppliers, resulting in massive losses.

“Thus, Live Nation reasonably believed that FM would owe coverage for these losses, and expected that FM would expeditiously acknowledge those obligations and promptly start issuing payments to Live Nation during its time of need.”

Factory Mutual has not outright rejected Live Nation’s claims, but the insurer made no indication that it intends to provide coverage, the complaint said.

“FM Global values the long-term relationships we have with our policyholders and we are proud in leading the industry for claims service,” a Factory Mutual spokesperson said in a statement. “It is unfortunate when legal matters arise because we strongly believe our insurance policies are clear on the coverage provided.”