Disney sued by insurer in Hollywood’s latest COVID-19 coverage dispute

Walt Disney Co. is facing a lawsuit from an insurance company that does not want to pay out coverage for certain delays of film and TV productions caused by the COVID-19 pandemic.

Fireman’s Fund Insurance Co. on Thursday filed a complaint in Los Angeles County Superior Court asking the court to rule in the dispute over the claims, which include $10 million in insurance coverage for delays that came after productions were allowed to start again.

A Disney spokesman did not have an immediate comment.

Productions in California started up last year after Hollywood unions and studios agreed to protocols to prevent the spread of the coronavirus, including physical distancing and mandatory masking while not in front of the camera.

Legal experts had long expected that insurance would be a point of contention between insurers and studios as shooting ramped up amid the pandemic. Additional health and safety protocols and shutdowns have added millions of dollars to the costs of film and TV shoots.

The lawsuit against Disney is the latest in a major buildup of litigation surrounding pandemic-related insurance claims in entertainment and other industries. In September, the production company behind the Ben Affleck heist thriller “Hypnotic” sued its insurance company over its refusal to extend coverage without excluding losses linked to COVID-19.

Disney’s insurer is not disputing claims related to the “first wave” of COVID-19 shutdowns, which were ordered by state and local governments at the beginning of U.S. outbreaks in March 2020.

However, the company says it should not have to pay to cover what it calls the “second wave” claims, or delays on productions that happened after film and TV shooting was allowed to resume in California and elsewhere.

An example of a second wave claim, according to Fireman’s Fund, would be when a director is exposed to a “nonessential” worker who tested positive for COVID-19, causing the director to quarantine for 14 days.

According to Fireman’s Fund, Disney claims coverage is available for such situations under its insurance policy. The insurer disputes this. For example, Fireman’s Fund said Disney is not entitled to coverage for such situations under its “cast coverage” policy, which applies when necessary personnel die or become sick or injured.

Cast insurance is common on Hollywood productions and indemnifies producers for any losses or extra expenses to complete principal photography due to the death, injury or illness of any insured artist or director.

Fireman’s Fund contends that expenses resulting from “covered cast/crewmembers, who were otherwise healthy, being required to quarantine due to exposure to persons who tested positive and/or became infected” are not covered.

Additionally, the insurer is disputing claims related to so-called civil authority and imminent peril provisions. Civil authority coverage applies to losses due to a city or other government forcing a shutdown. Imminent peril would cover losses caused by a threat such as a storm or wildfire.

The insurer also disputed claims resulting from the extended production hiatus urged by governments and Los Angeles, Atlanta and London during the 2020-21 holiday season as a result of a spike in COVID-19 cases and hospitalizations.

Fireman’s Fund said it should not be on the hook for those claims. The complaint argues, for example, that the company’s civil authority coverage was not triggered by the government requests, and would be triggered only by “orders revoking permission to use or prohibiting access to facilities used” by the production crew.

Times staff writer Anousha Sakoui contributed to this report.