Always Smiling Productions filed suit against Chubb National Insurance Company last week (read it here), claiming that the insurer adopted “arbitrary restrictions” on coverage for the series, and interpreted the show’s policy in a way that would limit its obligation. More simply, according to the lawsuit, Chubb claimed that it didn’t have an obligation to pay for Covid-related losses because they were not “direct physical loss or damage.”
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“Chubb also has known for more than a decade that it and its insureds face a substantial risk of loss from various viruses and pandemics and, since 2006, has had available to it an insurance industry standard-form exclusion applicable to certain losses causes by viruses and bacteria,” according to the lawsuit. “Yet, in selling the policy to Always Smiling, Chubb did not include any such exclusion. In fact, Chubb did nothing in selling the policy to Always Smiling to limit its liability for virus or pandemic-associated risks. Nor did Chubb warn Always Smiling that even though it did not include a virus or pandemic exclusion, it would interpret the policy as if it contained one.”
A spokesperson for the insurer did not immediately return a request for comment.
Always Smiling also said that the insurer forced it to buy additional insurance on less favorable terms because Chubb refused to extend the policy through the completion of its production beyond the policy expiration date, even though that is “the insurance industry’s long-established custom and practice and the relevant language of its insurance policy.”
According to the lawsuit, the series had $125 million in cast coverage and $1 million each for imminent peril, vivil or military authority, and ingress and egress coverages.
After the Covid-19 pandemic forced widespread shutdowns and closures, producers notified Chubb of the production stop on March 12, 2020. Several weeks later, though, the insurer contended that the losses were covered only by the policy’s civil authority or military coverage, with a $1 million limit of liability per occurrence.
Then, in September, Chubb sent a letter “essentially denying coverage for most aspects of Always Smiling’s loss,” according to the lawsuit.
“Chubb wrongly asserted that there was no cast coverage because there were no reported cases of ‘death, injury, sickness, kidnap, or compulsion by physical force or threat of physical force,'” according to the lawsuit. “…Chubb also stated, in total disregard of the guidance of the world’s leading health and medical authorities, that it did not see how incurring costs for COVID-19-related safety protocols, such as personal protective equipment, would reduce a covered loss.”
According to the lawsuit, Chubb also took the position that. under the military and civil authority policy, only costs to shoot new elements would be covered — and not the costs to restart production and for safety protocols. The producers claimed that in doing so, Chubb was creating a new requirement not found in the policy, that the loss must be “directly caused” by the action of a military or civilian authority.
The lawsuit, filed in federal court in Los Angeles, seeks unspecified damages.
The Morning Show did go back into production, and it is set to return for the second season on Sept. 17.
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