Regal Cinemas is suing three insurance companies over allegedly failing to honour their policy obligations to reimburse the theater chain for business loss suffered during government-ordered coronavirus shutdowns.
Allianz Global Risks US Insurance Co. (Defendants in Los Angeles Superior Court lawsuit brought Thursday) and Liberty Mutual Fire Insurance Co. (Defendants in Zurich American Insurance Co.
“Despite issuing broad, all-risk business interruption insurance policies, the insurers have refused to compensate Regal for a single dollar of its losses,”The suit states.
Regal owns about 80 theaters across California, many of which are located in Los Angeles County. This makes California Regal the most important geographic location for revenue, insured theaters and scale of operation according to the suit.
Regal is seeking unspecified damages as well as a court order ordering the insurers to compensate Regal in accordance with the policies. The representatives of the insurance companies were not available for comment.
“Regal has sustained hundreds of millions of dollars in financial losses since March 2020 as a result of the COVID-19 pandemic, including lost ticket sales, concession sales and extra expenses,”The suit states.
Regal lost more money even after the original orders were lifted. Regal was also affected by the Omicron virus, which continues to be contagious in its theaters.
Regal’s had the vision to purchase insurance protection for business interruption to cover the exact risk Regal’s business and assets faced during the pandemic. When the time came to file for compensation, the suit states.
In September and October 2020, however, the insurers refused coverage to Regal on grounds that Regal had not suffered direct physical damage or loss to their property. They also cited policy exclusions regarding pollution or contamination. “loss of market, loss of use or indirect or remote loss,”The suit states.
“The insurers’ refusal to cover Regal’s losses lacks any justifiable basis,”The suit states. “It contravenes the plain meaning of the policy and case law in California and across the country addressing similar issues under similar policy language.”