The effect of the ongoing lockdowns to the community due to COVID-19 continue to impact a wide range of industries. This is felt more deeply by the live theatre and music industry.
Stage productions and theatres are major casualties of COVID-19 with long-term closures, further complicated by little or no clear indication of the length of time the shutdowns will last.
The financial losses are already catastrophic. Some producers are now considering permanent closure of shows with no plans for other productions in the short-term.
This is creating further uncertainty for theatre owners and places additional pressure on revenues.
How is insurance responding?
Some theatre owners in Victoria and NSW have already filed business interruption claims against their insurers. Others have commenced proceedings in court against insurers for revenue losses which have made headlines due to COVID-19 closures.
These follow cases against eight insurers in the UK which tested whether 28 policy wordings could respond to certain types of business interruption losses during and as a consequence of COVID-19.
In short, the decision in the UK deemed that COVID-19 was covered under the insuring clauses in dispute, however this is just one aspect of whether a claim would be successful.
For some theatres in the UK, claims on policies have been successful and have subsequently caught the interest of theatre owners and managers in Australia.
In Australia, there are two similar test cases before the courts, however the majority of Business Interruption claims will not be able to be finalised until further clarity is provided by the second test case. A decision is expected to be handed down as early as October 2021. Lockton await the outcome of these cases to ascertain what advice to provide to our clients and other organisations.
In the interim, Lockton strongly recommends policyholders lodge a claim with their insurer.
What you should do:
1. Theatre and production companies should submit a claim to their insurer/s to determine if there is any avenue to seek reimbursement of losses from insurers if impacted by closures.
2. An independent insurance broker can assist with your policy reviews and provide comment on your current circumstances with a guarantee of utmost confidentiality.
Talk to us now, we’re ready to help