A judge has dismissed a lawsuit brought by United Talent Agency against two insurance companies that alleged the defendants breached contracts by withholding COVID-19 coverage — finding the only direct losses occurred because of government closure orders.

Los Angeles Superior Court Judge Christopher K. Lui heard arguments on June 23 in UTA’s case against Vigilant and Federal insurance companies for $150 million in losses. Both are members of the Chubb group of insurers.

Lui took the case under submission and issued his final decision later in the day.

“The loss was not a physical deprivation of property, but rather an interruption of business operations,” Lui wrote in a 19-page opinion.

UTA did not allege that any of its property was lost or damaged to the point it could no longer be used, according to Lui.

UTA brought the suit last Nov. 13.

“Like thousands of other businesses, UTA halted its business when the pandemic hit the United States, resulting in financial losses, which included lost profits, lost commissions and lost business opportunities,” the suit stated. “There is no merit to Vigilant’s and Federal’s position that their policies do not insure the losses that UTA has suffered and is suffering.”

Vigilant and Federal have known for more than a decade that they and their clients face a substantial risk of loss from viruses and pandemics and often have included an exclusion in their policies to limit or bar coverage for such losses, the suit stated.

“However, in selling their policies to UTA, Vigilant and Federal decided not to include any such exclusion,” according to the suit.

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