Hollywood talent agency CAA sues insurer over COVID-19 losses

Creative Artists Agency on Friday sued its insurer Affiliated FM Insurance Co. for not covering losses suffered due to the COVID-19 pandemic.

The Century City talent agency said it believes its insurance policy should cover the financial impact COVID-19 had on its business, including canceled live events and Hollywood productions.

Instead, its insurer is covering only losses that fall under sub-limits of $100,000 under its “communicable disease coverages.” Affiliated FM “only covers a small fraction of the losses CAA sustained as a result of the pandemic and which is actually less than the premium paid by CAA during each of the policy periods at issue in this action,” CAA said in its lawsuit.

“CAA reasonably believed it would be covered for unprecedented and unanticipated losses, including losses associated with the interruption of its business operations from the spread of SARS-CoV-2 and COVID-19 and the related government closure orders,” CAA said in its lawsuit.

Hollywood Inc.

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The complaint, filed in Los Angeles Superior Court, did not specify the amount of losses and damages CAA is seeking.

An AFM representative said in a statement that the company values its long-term relationships with policyholders.

“It is unfortunate when legal matters arise because we strongly believe our insurance policies are clear on the coverage provided,” said Steve Zenofsky, a representative for AFM.

CAA is among other Hollywood businesses suing insurers over disputes related to coverage. Last year, Beverly Hills-based United Talent Agency sued Vigilant Insurance Co. and Federal Insurance Co. for breach of contract. In July a judge ordered the case to be dismissed. UTA has filed a notice of intent to appeal.

Talent agencies, along with other entertainment companies, suffered significant business woes during the pandemic, taking cost-cutting measures such as layoffs. In July 2020, CAA cut 90 agents and executives.