A Los Angeles federal judge ruled Thursday (Feb. 3) that Live Nation’s insurance company might need to pay for the huge losses incurred by the concert giant because of COVID-19 shutdowns, which allegedly included more than 10,000 cancelled or postponed shows.
Live Nation sued Factory Mutual Insurance Co. last year after the insurer refused to cover the promoter’s losses during the pandemic, which Live Nation claims included 15 million cancelled or postponed tickets.
Factory Mutual moved to end the case and argued that virus shutdowns are not the kind of “physical loss or damage” that would be covered under Live Nation’s policy, but Judge John A. Kronstadt said Thursday the presence of COVID-19 might enough of a “physical intrusion” that it could be covered.
“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,” the judge wrote.
Importantly, the ruling does not mean Live Nation has won its demand for coverage. Instead, the judge merely rejected Factory Mutual’s request to win the case at the earliest stage. The two companies will now proceed toward discovery and an eventual trial over the disputed policy.
Still, it’s a good sign for Live Nation. The case is one of many lawsuits filed by restaurants, retailers and other businesses seeking insurance coverage for harm caused by COVID-19. Thus far, those case have largely been won by the insurers, often with early-stage rulings like the one Factory Mutual was seeking.
It’s unclear exactly how much Factory Mutual would need to pay if it ultimately loses the case, but Live Nation has argued that it suffered “massive losses” and that it purchased its insurance plan as “protection against this exact situation.” At the time that the company filed the lawsuit in January 2021, it said it had already cancelled more than 5000 concerts and postponed another 6000 more.
An attorney for Factory Mutual did not return a request for comment on the decision.