February 13, 2016

Event Cancellation Insurance Claim Denials — Tips for Recovery

Very few policyholder insurance recovery lawyers have ever even looked at an event cancellation insurance policy, let alone pursued a claim under one of these policies.  This is likely the case because event cancellation insurance is a unique kind of insurance coverage that is not applicable to most kinds of businesses.  As its name implies, event cancellation insurance covers losses caused by the cancellation of an event.  The event may be a movie shoot, sporting event, concert, or television production.  Any business that derives revenues from an entertainment-related product, has likely purchased this kind of coverage, and the financial stakes for event cancellation are highest in the music, movie, television, and entertainment industries.  

If you think that insurance recovery law is boring, a close look at event cancellation insurance should change your mind.  When a movie cannot be made because an “A list” actor got injured days before scheduled shooting, think of event cancellation insurance.  When one of the most successful rock bands of all time is forced to evacuate a venue because of a bomb scare, think of event cancellation insurance.  When one of the largest music television productions in the world needs to guarantee revenues, even if it cannot deliver the show, think of event cancellation insurance. 

What makes these claims interesting is not the significant amounts of money in dispute.  They are interesting because of the people involved.  On the one side are some of the most creative and successful professionals in the world.  On the other, some may say, are some of the least creative people you will find.  Mix all of that together with insurance company jargon and a healthy mix of insurance company delay, and you have some legitimately frustrated policyholders in need of counsel to move the insurers towards payment.  

The way through this morass is to engage an insurance recovery law firm that has a significant amount experience with event cancellation insurance claims for the music, movie, television, and entertainment industries.  There are many posers, but, in reality, very few law firms have the requisite experience in this area.  We have represented some of the best in the entertainment sector, ranging from well-known movie production companies, to the Grammy’s, to the Rolling Stones.  In handling these claims, we have found that entertainment professional come at these claims from the correct perspective – they need to be paid, and they don’t want any excuses.  This refreshingly honest approach may not be what insurance carriers want to hear, but inflexibility, ironically, can go a long way towards resolving event cancellation disputes because it sets the tone for full and complete payment. 

If you are in the music, movie, television or entertainment industries, and find yourself in the unfortunate position of having to pursue an event cancelation claim, please give us a call.

We have included the transcript of the video below:

We have unparalleled expertise with event cancellation insurance, an important niche practice area.

One of the areas that  Miller Friel has great expertise in is sort of a very narrow area of insurance and that is event cancellation insurance. Now event cancellation insurance, not many folks deal with those types of claims. We’ve dealt with a lot of event cancellation claims. These insurance policies cover your losses. The event gets canceled, might be a concert, might be something else, the event canceled and you lose lots of money. Insurance companies are notorious for denying those claims. They don’t always happen very often but they are nonetheless notorious for denying these claims. So on our context we represented everyone from the Grammies to Rolling Stones, performers, high-profile individuals, celebrities having a wedding all of these types of things are examples of where you might want event cancellation coverage.

So two general broad examples of how we dealt with this. After 911 there were a whole slew of claims for event cancellation. The insurance companies main argument was, well, yeah, we get it your event was canceled but we really don’t think it was related to, it was a little too far removed from 9/11. Yes, we get it in New York City, some very bad stuff happened. We got it, yeah and in Washington DC,  bad stuff happened. And in Pennsylvania, bad stuff happened. But your event was in Phoenix Arizona how could that be impacted by the physical destruction of these other areas. The client responds, well nobody could get on a flight. Good answer, and that’s true. The insurance company answers, a little too remote for us. So these are the types of claims that were dealing with after 911. All of those settled without litigation. They were difficult for a period of time, but we worked our way through them and most of the issues were causation issues.

More recent a time was the government shutdown of 2013. We have a client who was a 200-year-old entity. They were formed during the Civil War. It’s an association of military doctors and surgeons that helps the military. So basically during the Civil War they said we needed a better understanding of care and medicine, so they formed this association that’s still here today. They came to us and said the insurance company Lloyd’s of London denied our claim. We had an event that was right during that time period when the government was completely shutdown. And the military doctors and the military nurses and surgeons who were coming for continuing medical education didn’t come. So we lost a whole years worth of revenue. Well, Lloyd’s of London basically said forget it ,were not covering it. They sent a few letters. They had some lawyers send some letters. Still they are not covering it. So they brought us in. We said look, this is not going to be easy because Lloyd’s of London does not want to pay this claim. It’s a precedent, it’s going to create trouble. They said what do we do. And we said, you only have one option and that is you either file suit and will push it and get it or you do nothing, the options yours. And they said, we’re not gonna do nothing, we want to be paid.

So we filed suit in all places in Arizona, which has a big military presence. And I thought from the beginning that we are going to bring them the men and women in uniform into Arizona. And they are going to testify what happened. And the insurance company’s going to bring the suits over from London and they’re going to testify why they didn’t want to pay. And we thought that we had a much better story. Turned out they went and hired one of the biggest law firms in the country, if not the biggest law firms in the country. They needed a high-profile lawyer. That high-profile the lawyer filed a whole series of motions off the bat. Pretty well drafted, nice motions. Wanted to kick this case out. Wasn’t gonna let it go to trial.

We responded to all of those motions. Beat them back, won every single one. Within months that same trial lawyer was calling to settle the case. Now the story is that does not happen all the time, but it is a strategy that we pursued and stuck with it and it’s a strategy that paid off.

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