In a decisive blow to one of the Bay Area’s prominent entertainment companies, the California Supreme Court has ruled that Another Planet Entertainment can’t cash in on their pandemic woes through their insurer, as restitution for COVID-related business interruptions is not part of the deal. The courts decided that, contrary to the promoter's $20 million claim, the presence of COVID-19 does not constitute the kind of physical property damage that their policy with Vigilant Insurance covers, according to SFist.
For those who missed the courtroom drama, Another Planet, which operates venues like the Greek Theater and the Fox Theater, stood its ground because the virus spreading inside buildings made them unusable; hence, it should be considered physical damage. The courts, however, didn't have any of it, and the California Supreme Court, with Chief Justice Patricia Guerrero leading the charge, unanimously knocked down the company's argument. Guerrero put it bluntly, stating, "A property insurance policy does not cover a particular intended use; it covers the property itself... Direct physical loss or damage to property requires a distinct, demonstrable, physical alteration to property," a statement that SFist noted.
The ruling didn't just rain on Another Planet's parade—it also sent a clear message to other businesses with their eyes on insurance payouts for COVID closures. The likes of the Los Angeles Lakers and Major League Baseball had chimed in with support for Another Planet, but to no avail.
The decision aligns with a broader consensus that's been forming in courts across the country, essentially saying that you can't claim insurance for a virus just because it stops foot traffic to your venues. Indeed, per Business Insurance, the court's language was ruthlessly clear: the virus's presence and subsequent public health mandates do not make for a physical property alteration, which is necessary for insurance coverage. This sets the tone for what could likely result in a cascade of denials for businesses seeking similar resolutions.
