On March 26, 2020, Lee Brenner and Sarah Cronin were quoted in Business Insurance regarding COVID-19’s effect on the film and television industries. According to the article, the COVID-19 pandemic has caused disruption and delays to many businesses, not least of all the movie industry. But whether insurance policies will respond to the millions of dollars lost by studios, investors, and actors is still at question.
TV networks and movie studios are behaving like other sensible employers and changing their plans, said Brenner. “Right now, international travel is all but frozen. Travel has been discouraged and some companies have suspended production,” he said.
If a production shuts down or gets delayed due to coronavirus concerns, a claim will be tendered to insurers and there will be a period of time while both sides are “figuring out” if there is coverage, said Cronin. Given the wide scale of the pandemic and the fact that a lot of productions are shutting down, the situation will likely result in increasing insurance coverage litigation, she added.
One of the legal issues that will arise is the so-called “force majeure” provisions in business contracts that are triggered when an event, sometimes referred to as “an act of God,” relieves a person from performance under terms of their contract, said Brenner. Such provisions can be a defense to a breach of contract claim, he said.
Because coronavirus is not a foreseeable event and not within any party’s control, it is “likely a force majeure event,” he said, adding that increased litigation around this issue will also follow.