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Law360 (March 10, 2021, 10:28 PM EST) -- The company behind "Tina: The Tina Turner Musical" sued its insurer Wednesday in New York state court, arguing that the insurance company wrongfully denied its claim seeking to cover losses from shows canceled by state coronavirus shutdowns.
Tina Turner Musical, or TTM, argues that its policy from Chubb Insurance Company, which TTM says was effective from July 2019 to October 2020, should cover its claim because the company's losses stem from state orders temporarily closing theaters. This, TTM says, is not excluded in its event cancellation insurance policy.
Last March, state authorities ordered the closure of New York City theaters, which remain closed to date. Due to the state and city orders, the Lunt-Fontanne Theater, which houses the "Tina Turner Musical" production, had to close its doors and cancel all future performances.
TTM then notified Chubb of the canceled performances and the losses it incurred due to the cancellations, which it said should be covered under the event cancellation policy.
Under the event cancellation policy, coverage is capped at $16.5 million for costs and expenses and roughly $6.1 million for gross revenue, the complaint says.
But Chubb allegedly denied coverage of TTM's claim due to a "communicable disease" exclusion that the insurer says encompasses the coronavirus.
"Despite TTM having paid substantial premiums to cover the risk of cancellation of performances of The Tina Turner Musical, Chubb placed its own financial interests above those of its policyholder and wrongfully denied TTM's claim," the complaint says.
Under the communicable disease provision, coverage is excluded from any communicable disease which results in any national or international body or agency imposing a quarantine on people or animals, the complaint says.
But TTM argues that Chubb failed to hold an investigation of TTM's claim because, if it had, the insurer would have realized that the communicable disease exclusion does not apply to its claim, according to the complaint.
TTM insists that a communicable disease did not lead to the U.S. government closing down the theater, but instead, that its losses are tied to state and local closure orders.
The company added that Chubb carries the burden of establishing exclusion parameters and if it wanted to preclude coverage for losses stemming from all governmental orders, it should have done so.
"Had Chubb wanted to include within the Communicable Disease Exclusion a communicable disease that led to any government response (whether local, state, national or international), it could have done so, but did not," the complaint says.
TTM accuses Chubb of breaching their contract and seeks a judgment that declares the event cancellation policy will cover the losses TTM has incurred.
Representatives for the parties did not immediately respond to requests for comment on Wednesday.
TTM is represented by Alexander D. Hardiman and Patricia Rothenberg of Pillsbury Winthrop Shaw Pittman LLP.
Counsel for Chubb could not be ascertained on Wednesday.
The case is Tina Turner Musical LLC v. Chubb Insurance Company of Europe, case number unknown, in the Supreme Court of the State of New York, County of New York.
--Editing by Ellen Johnson.
For a reprint of this article, please contact reprints@law360.com.
