Coronavirus Business Losses for Movie & Performing Arts Theaters

For millions of people, heading to a theater to check out a movie or a live performance is one of their favorite ways to relax. This is true throughout the country, but theaters hold a very special place here in California. With the film and entertainment industries being so prominent in Los Angeles, it’s hard to imagine the city without its historic theaters, film festivals, and red carpet premieres.

Not only is Los Angeles home to lots of movie theaters, it’s a great town for live theater. Every year, touring Broadway productions make stops in Los Angeles and there are lots of other plays and live music performances that happen throughout the area. 

But when the coronavirus outbreak hit the United States, theater owners were placed in a very precarious position. Major theater chains and independent theaters alike were hit hard, with mandated closures forcing the cancellation or postponement of many live performances and delayed the releases of several highly anticipated movies.

Business Losses for Theater Owners

Even once theaters are allowed to begin operating again, there may be additional delays before guests can walk through the doors. Theater owners may need extra time to hire new employees and train them on new procedures designed to keep employees and guests safe. Theaters will also likely be operating on a limited basis, allowing fewer people in at a time and with fewer screenings per day to leave more time for cleaning.

With release dates for many highly anticipated movies being pushed back and other movies turned into direct-to-streaming releases, theaters may be limited in the movies they’re able to show. In the case of performing arts theaters, owners will have to wait until postponed shows are able to be officially rescheduled or new shows can be booked. 

While movie theaters depend on being able to regularly screen films, many theaters throughout the state also count on venue rental fees from events like film festivals, premieres, and other special film screenings as part of their revenue. With film premieres on hold for the foreseeable future and many annual festivals cancelled or postponed, theaters that frequently host these types of events may be facing a substantial loss of income. 

Business Insurance for Theater Owners

We’ve all heard the adage that the show must go on, but there are times when it simply isn’t able to. Knowing that things like power outages and building damage can potentially force theaters to shut down, theater owners often protect themselves by buying business insurance policies to protect them when the unexpected occurs. Business interruption insurance is meant to cover monetary losses, like employee wages and lost revenue, caused by temporary closures. In some cases, they may also have insurance with civil authority insurance that covers losses caused by temporary closures caused by government orders. Since owners of performing arts theaters know how disruptive event cancellations can be, they may also have event cancellation and non-appearance coverage as part of their business insurance policies. 

Unfortunately, just as theater owners face extended closures, their event cancellation and business interruption insurance claims are frequently being denied. Insurers are trying to argue that coronavirus does not count as a type of physical property damage covered by their policies. In the case of event cancellation claims, they might try to say that being concerned about coronavirus isn’t enough of a reason for them to cover the losses of a cancelled event. 

Help for Theater Owners Facing Business Insurance Claim Denials

If your insurance claim has been denied, you’re definitely not alone. With so many business owners in a wide range of industries making insurance claims over closures related to the coronavirus pandemic, insurers are eager to deny as many claims as possible. 

Whether you’re considering making an insurance claim or your claim has been denied, working with a lawyer can give you the best chance of getting the benefits you deserve. The Wallace Firm is now helping California business owners in their business interruption insurance claims. These types of claims can be very complex and our team is very experienced in dealing with insurance carriers. Find out how we can help. Contact us today to get started.