Disney Sued by Insurance Company Over COVID-Related Costs

The Walt Disney Company is being sued by its insurer, who says it should not have to pay out certain claims related to the COVID-19 pandemic.

In the lawsuit, Fireman’s Fund Insurance says it does not dispute the claims related to the early months of the pandemic, known as “first wave claims,” are covered under “Civil Authority Coverage. But the two sides cannot agree on what Fireman’s calls “second wave claims” and “holiday hiatus” claims.

Fireman’s explains “second wave claims” as follows: “An example of a typical Second Wave Claim would be a non-essential crew member testing positive for COVID-19. Production would be able to continue without this person but for the fact that he or she has had face-to-face contact with the director. Having been exposed, the director is required to quarantine for 14 days, causing production to shut down, even if he or she never tests positive or becomes ill.”

In the suit, Fireman’s says that Disney believes a claim of this type is covered under its policy; Fireman’s disagrees. According to the suit, Disney has claimed the amount at dispute for these kinds of claims is at $10 million.

As for the “holiday hiatus claims,” Fireman’s argues that while it is “customary” for productions to shut down for two weeks before the holidays, Disney shut down for an additional 1-2 weeks because “public health authorities in Los Angeles, Atlanta and London expressed ‘elevated concern’ during the 2020-2021 holidays about then-spiking COVID-19 levels.”

The extended shutdown was not ordered, it was “urged,” and thus Fireman’s believes it should not have to pay out for the extra downtime.

Fireman’s is asking a judge to rule in their favor on the claims it does not feel it has to pay out.

A rep for Disney did not immediately respond to TheWrap’s request for comment.

Pamela Chelin contributed to this report.