CAA Sues Insurance Company For Not Covering Losses During Covid

CAA has become the latest media and entertainment company to sue an insurance company for not covering losses suffered during the coronavirus shutdown.

The Hollywood agency on Friday filed a civil suit in Los Angeles Superior Court against Affiliated FM, citing the insurance company’s “bad-faith refusal” to pay CAA claims “under broad ‘all-risk’ policies of insurance that CAA purchased from AFM … to cover precisely the types of losses that CAA has sustained as a result of the SARS-CoV-2 pandemic.”

The suit (read it here) seeks declaratory relief from AFM, which it accuses of breach of written contract and tortious breach of the implied covenant of good faith and fair dealing. There are no dollar figures noted in the suit, which seeks compensatory and other damages.

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CAA’s lawyers at Boren, Osher & Luftman say the agency had been assured that it had protection “because it had purchased high-level insurance from AFM to protect itself from an unprecedented and unanticipated catastrophe like the COVID-19 pandemic.” It said it has suffered loses (and ongoing losses) including “substantial financial losses, including lost profits, lost revenue, and lost business opportunities, as well “as canceled live events, including sporting events and concerts, as well as cancelled television and motion picture productions.”

CAA says AFM “wrongfully has taken the position that the only coverage potentially available … is found in the policies’ ‘Communicable Disease coverages,’ both of which are subject to aggregate sub-limits of $100,000, which only covers a small fraction of the losses CAA has sustained as a result of the pandemic and which is actually less than the premium paid by CAA during each of the policy periods at issue in this action.”

This is the latest such lawsuit as companies untangle from the Covid shutdown that hit the industry, forcing disruptions, furloughs and layoffs. Fellow agency UTA, Disney, Paramount and Apple TV+’s The Morning Show have all recently sued insurance carriers for failures to pay claims on Covid losses.

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