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Factory Mutual fails to clip Live Nation suit

A Los Angeles federal judge has ruled that the insurance company of Live Nation may need to pay for the losses incurred by the live entertainment giant, due to mass cancellations caused by COVID-19.

Live Nation sued Factory Mutual Insurance Co. last year following the insurance company’s refusal to cover the promoter’s losses during the pandemic. Live Nation claims that it had to cover 15 million cancelled or postponed tickets and more than 10,000 cancelled or postponed shows.

Judge John A. Kronstadt said that COVID-19 might be enough of a ‘physical intrusion’ that it could be covered, after Factory Mutual had moved to end the case by arguing that the shutdowns due to coronavirus were not the kind of ‘physical loss or damage’ that would be covered under Live Nation’s policy.

The judge wrote: “The complaint sufficiently alleges that infectious respiratory droplets, which transmit COVID-19, are physical objects that may alter the property on which they land and remain.”

This ruling means that the judge has rejected Factory Mutual’s request to win the case at the earliest stage, which is good news for Live Nation.

At the time of announcing the lawsuit, Live Nation said: “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.

“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.”

Image: Vishnu R Nair on Unsplash