GMSR defeats entertainment company’s novel appeal for pandemic coverage

Endeavor Operating Co., a media and entertainment producer, sued its commercial property insurer for coverage of losses it experienced during the COVID-19 pandemic.  Endeavor argued that governmental restrictions on its ability to use venues, and property damage supposedly caused at unnamed venues by the virus that causes COVID-19, satisfied its insurance policy’s coverage requirement of “direct physical loss or damage” to property.  The trial court sustained the insurer’s demurrer and dismissed the suit.

GMSR represented the insurer in Endeavor’s appeal to the California Court of Appeal.  In addition to those same arguments, Endeavor contended that the policy’s unusual use of the word “event” entitled Endeavor to certain coverages with no showing of physical loss or damage at all.

In a published decision, the Court of Appeal rejected all of Endeavor’s arguments, and affirmed judgment for the insurer.  The decision joined the majority of Court of Appeal decisions denying coverage on comparable allegations.  It was the first in that line, however, to openly criticize two contrary decisions from another division (now on review in the California Supreme Court) for their core errors in applying California’s demurrer standards to the COVID-19 context.

To read the Court of Appeal Opinion, click here:  Endeavor Operating Company, LLC v. HDI Global Insurance Company (2023) 95 Cal.App.5th 839 [Second District, Division 2]

To read about the case in Law360, click here:  Zigterman, No COVID Coverage For Entertainment Co., Calif. Panel Says, Law360 (Sept. 22, 2023) (subscription required)