Regal Cinemas is suing three insurers for allegedly failing to honor their policy obligations to compensate the theater chain for business losses suffered during coronavirus-related, government-ordered shutdowns.
“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 has about 80 theaters in California, including San Diego County, making California Regal’s most significant geographic location in terms of revenue, number of insured theaters, and scale of operation, according to the suit.
Regal seeks unspecified damages and a court order directing the insurers to pay Regal according to the policies. Representatives for the insurance companies could not be reached 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.
After the original orders were lifted or relaxed, Regal continued to suffer losses due to the continuing presence of the virus at its theaters, including most recently as a result of the highly contagious Omicron variant, according to the suit.
Regal’s had the foresight to purchase protection from the insurers for business interruption that covers the very risk to Regal’s business and properties that materialized during the pandemic, so when the time came the theater chain made the appropriate claim for compensation, the suit states.
However, in September and October, 2020, the insurers denied coverage on grounds that Regal did not experience direct physical loss or damage to their properties and they cited policy exclusions for pollution or contamination as well as “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.”
City News Service contributed to this article.