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Law360 (March 15, 2021, 8:19 PM EDT ) Great Divide Insurance Co. has countersued ViacomCBS in California federal court, alleging the media conglomerate "prematurely" brought a COVID-19 business interruption lawsuit against it after ViacomCBS failed to cooperate in its claim investigation.
The insurance company said Friday that Viacom did not provide requested documentation relating to its insurance claim, but sued Great Divide when the carrier was still investigating its claim and trying to figure out the details of its alleged loss.
In January, ViacomCBS claimed Great Divide reneged on its coverage agreement by refusing to protect the media giant from losses when it was forced to delay or cancel production for its TV shows and live events because of the COVID-19 pandemic.
ViacomCBS, which produces shows including "Yellowstone" and "Younger" as well as live events like the "Nickelodeon Kids' Choice Awards," said in its suit that its policy with Great Divide, a subsidiary of W. R. Berkley Corp., provides $30 million of cast coverage, $10 million of extra expense, $10 million for imminent peril coverage, $1 million in civil authority coverage and $1 million in ingress and egress coverage.
When the pandemic hit in March 2020, ViacomCBS said it delayed principal photography on more than 100 TV productions, was forced to postpone shows and suffered millions of dollars of losses. The media company alleged Great Divide also insisted on adding a COVID-19 related exclusion into the policy for its third policy year.
On Friday, Great Divide said it has every right to review rates and revise the policy at the end of the second policy year as the insurance contract clearly stated. The carrier also asked the court to declare the policy's "loss of market or use" exclusion applies and the insurance does not cover business interruption unless it was caused by "direct physical loss."
Viacom's policy potentially covers extra costs the media company spent to avoid a covered loss instead of all COVID-19 related losses such as production costs before and during the pandemic, Great Divide said. But Viacom never fully provided information to show how much it has increased spending following its alleged loss, the insurer added.
The carrier said it has asked for information on all TV shows for which Viacom sought coverage for losses, and while the entertainment company has provided some, it did not do so for others.
For example, the insurer said, Viacom has not sent information about "Rich Kids Go Skint," a reality show featuring one 18-to-25-year-old "rich kid" living with a more modest family to show lifestyle differences, and "The Other Two," a Comedy Central series to be aired on HBO Max about a brother and sister struggling with their feelings about their 13-year-old brother's rise to fame.
Great Divide is seeking a declaration that it is not obligated to cover all of Viacom's pandemic-related losses, that Viacom failed to show proof of immediate danger as requested, and that it properly renewed the insurance.
Representatives for the parties could not be immediately reached for comment on Monday.
ViacomCBS is represented by Kirk Pasich, Anamay M. Carmel and Caitlin S. Oswald of Pasich LLP.
Great Divide is represented by Linda W. Hsu of Selman Breitman LLP.
The case is ViacomCBS Inc. v. Great Divide Insurance Co., case number 2:21-cv-00400, in the U.S. District Court for the Central District of California.
--Editing by Amy Rowe.
For a reprint of this article, please contact reprints@law360.com.
