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Boost for Live Nation in Covid insurance lawsuit

Live Nation has been handed a boost in its lawsuit against insurer Factory Mutual (FM) over its failure to cover the promoter’s “severe and unanticipated” losses stemming from the pandemic.

In January 2021, Beverley Hills-based Live Nation launched legal action against FM in the former’s home state of California for allegedly wrongfully refusing to pay out.

The complaint, filed in the US district court for central California, said that LN “reasonably” believed that Factory Mutual Insurance Co. would promptly cover its losses, as it has an “all-risks policy” covering lost income, property damage, extra expenses and interruptions from communicable diseases.

The filing notes that by the end of Q3 2020, the company had cancelled more than 5,000 concerts and pushed around 6,000 shows into 2021.

US district judge John A Kronstadt rejected FM’s bid to trim the lawsuit

According to Law360, Rhode Island-headquartered FM argues that, while it accepts Live Nation is entitled to cover for communicable diseases, it will not provide full coverage under the “physical loss or damage” section of the 2019 policy as Live Nation “did not suffer any physical damage or loss stemming from the virus”.

However, US district judge John A Kronstadt last week rejected FM’s bid to trim the lawsuit, ruling that it cannot be determined that – as a matter of law – the presence of Covid-19 in Live Nation’s properties could not cause “physical loss or damage”.

“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,” he wrote, reports WFAV.

The conclusion does not mean that Live Nation’s case has been successful, but that FM has failed to have it dismissed at the earliest stage.

Neither side has commented on the development.

 


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