Disney Is Being Sued Over The Pandemic Shutdown

By Doug Norrie | 2 weeks ago

disney

There’s nothing like a hot insurance-based lawsuit to get the old heart ticking when it comes to news in Hollywood. But that is exactly what we have going on now. The Walt Disney Company is locked into litigation with Fireman’s Fund Insurance over who is on the hook for payments during different parts of the pandemic last year. Deadline has it that the two sides are at a standstill over agreeing on who is responsible for the second wave of shutdowns and that’s led to the insurance company suing the Mouse House. 

All of this stems from claims put in by Disney, totaling around $10 million dollars, from the time period of late-2020 when the holiday-related second wave of the pandemic caused a number of different productions to shut down and delay. At the heart of the issue is what always gets caught up in the weeds around these particular issues: the language in the policy. Fireman’s claims they aren’t on the hook for any payments during this time period because the threat of the pandemic was no longer “imminent”. The insurance company sued for relief in this case. 

Additionally, Fireman’s used another part of the policy language to contend they didn’t have to pony up any money to Disney when it came to this time period of shutdowns. Apparently, they referenced the industry-standard timeline around production that usually sends casts and crews home two weeks leading into the Christmas and New Year’s holidays. Their contention is that this time period would have been without production costs anyway, so paying for that time period doesn’t make any sense. 

disney

And then there’s another part of the policy language that is being disputed. Fireman’s says that because the shutdowns, specifically in California, were due to local governments and authorities implementing rules around testing, distancing, and quarantining, that falls outside the realm of the coverage. They contend that those rules that stopped a variety of Disney productions weren’t actually pandemic-related but rather government-related. It’s an odd distinction, though if it’s upheld we could then see Disney sue local civil authorities for compensation if the rules were too stringent. This could end up being a fascinating series of litigious events. 

Anyone who’s ever dealt with an insurance claim is probably looking at this situation and grimacing at the notion of an insurance company diving deep into the policy to find language that will get them out of paying here. Whether it works remains to be seen. It’s not entirely clear which Disney productions are being referenced in this standoff with Firemen’s, but there’s a sense that this case could be the first domino in what might be years-long battles between studios (and other companies) and insurance companies about who is on the hook for pandemic-related loss of business. 

Over the last year, Disney has been forced to push back a number of different productions because of the pandemic. Black Widow is coming out this week, more than a year off schedule and there have been many others as well like Cruella, Shang-Chi and the Legend of the Ten Rings, Free Guy, Jungle Cruise, and more.