Regal Cinemas has sued three major insurance companies, saying they failed to pay claims for losses attributed to the COVID-19 pandemic that shuttered cinemas around the world for an entire year.
According to court documents obtained by TheWrap, Regal filed a lawsuit in Los Angeles Superior Court against Allianz, Liberty Mutual and Zurich American seeking unspecified damages and a court order requiring the companies to pay the claims.
“Regal has suffered 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 additional expenses,” the lawsuit states. “Despite issuing extensive all-risk business interruption insurance policies, insurers have refused to compensate Regal for a single dollar of its losses.”
The lawsuit says Regal purchased business interruption insurance before the pandemic and made a claim in 2020 after the pandemic forced the closure of its 549 locations, including 80 in California. But in October 2020, insurers dismissed the claim, arguing that the company suffered no physical damage to its locations and that the pandemic fell within the policy’s exclusions for “loss of market, loss of use or consequential loss. or remotely”.
“The insurers’ refusal to cover Regal’s losses has no justifiable basis,” the lawsuit says. “It violates the plain meaning of policy and case law in California and across the country addressing similar issues in similar policy language.”
While Regal’s theaters, along with those of other chains, reopened nationwide last spring, revenues from those theaters are still well below pre-pandemic levels. Despite a recent record boost for ‘Spider-Man: No Way Home,’ domestic box office revenue so far in 2021 is just $4.86 billion, less than half of 11 .3 billion reported in 2019.
Part of the reason for the drop is simply the lack of titles. Only 435 movies hit theaters in 2021 compared to 911 in 2019, according to Box Office Mojo, as studios were measured in their movie release plans in a recovering market. Meanwhile, attendance of moviegoers over 40 has remained well below pre-2020 levels as surges in COVID-19 infections fueled by the Delta and Omicron variants have kept older audiences reluctant. at a higher level than the 18-35 age group, which fueled hits like “No Coming Home.
Insurer representatives did not immediately respond to TheWrap’s requests for comment.
Pamela Chelin contributed to this report.