Disney is at the center of a new lawsuit over insurance payouts related to the pandemic, and how the case is decided could ultimately have huge ramifications for Hollywood as studios grapple with the budgetary fallout from a very trying year. The core issue in the new case entertainment insiders are watching very closely is whether insurance companies should be liable for shutdowns that occured after studios got the go ahead to return to work. Disney feels they should be, or at least its insurance company should be responsible. Not surprisingly, the insurance company does not feel the same way.
Let’s back up slightly. The majority of major movie productions take out insurance for a variety of potential issues including but not limited to major cast members dying or getting injured, natural disasters or major storm-related issues and governments requiring production shutdowns. Fireman’s Fund, which insures Disney and is the other party in this lawsuit, is reportedly willing to pay out for the first wave of the pandemic when official government shutdowns forced sets to close down, but according to The Los Angeles Times, it is disputing claims related to the second wave.
The second wave is the grey area that came after the initial production shutdowns and took a variety of forms. Examples of this would include productions shutting down after spikes in Covid cases without an actual requirement from governments to shutdown or productions taking a hiatus after a key cast member or person in the crew was exposed to a non-essential person with Covid and quarantined for two weeks. The potential for such shutdowns is why so many productions returned with forced pre-production quarantines, very limited crews or inside a bubble. Some even cancelled larger shoots and crossovers just in case.
This isn’t the first recent case of an insurer and a studio squabbling over what falls under a policy and what does not, but many are watching this closely since it involves Disney and there is a lot of money at stake. The full financial picture hasn’t been made public, but based on the court filings, there is reportedly at least $10M in dispute right now. Given how many set shutdowns after a Covid exposure there have been, there are also a ton of other productions in the same boat, and there may be even more soon. Because of that, how the judge ultimately rules will likely help to shape further rulings industry wide.
Los Angeles County recently decided to reinstate a mask mandate indoors. That specific rule is unlikely to have a big effect on movie and TV shoots, but any further local ordinances could have a big effect. The new mandate is also a clear reminder of how back-and-forth the pandemic has been. As this lawsuit also illustrates, there wasn’t really a moment where the pandemic started and where it ended. There have simply been times in which it has been better and times in which it has been worse with intermittent periods in which the government was directly involved with rules.
Regardless of how this case is ultimately decided, there has been recent reason for optimism at the box office. Black Widow was able to gross more than $80M during its opening weekend at the box office and far more than that when foreign grosses and OnDemand purchases are counted. Between that strong showing and recent performances by A Quiet Place Part 2 and F9, studios have been starting to feel more optimistic about releasing the bigger budget offerings they’ve been holding on to.
There is going to be a lot of settlements and lawsuits between studios and insurance companies over the pandemic. Hopefully for everyone’s sake, there won’t be major new pandemic issues moving forward that will later require a further round of delays and insurance payouts.
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