The Pacific Ballet British Columbia Society is suing its insurer after it allegedly declined to cover losses the organization suffered because of cancelled events due to the COVID-19 pandemic.
The society, which also goes by Ballet BC, filed a lawsuit recently against Ecclesiastical Insurance Office PLC (LON: ELLA) over its insurance policy under the actONE Performing Arts Insurance Program, which includes coverage for “performance interruption loss.”
Ballet BC argued this applies when the organization “experiences losses due to the actual or potential cancellation, interruption, postponement or impairment of a performance” using the greater of the gross revenue loss (such as refunding pre-paid tickets and loss of future ticket sales) or the production expense loss (including expenses from marketing and promotions, and other production expenses).
Ballet BC’s 2019-20 season was expected to include performances of Romeo and Juliet in Victoria March 13-4, 2020; Hora & Bill in Vancouver May 7-9, 2020; and Romeo and Juliet in Sydney, Australia, from June 5-16, 2020.
Work on those performances began in 2018, according to the lawsuit, which listed pre-production expenses, artistic expenses, contract expenses, stage and personnel costs, presentation and operation costs, and overhead expenses among its costs.
Two days before the Victoria performance of Romeo and Juliet, the World Health Organization declared a global pandemic.
And on March 13, the B.C. government recommended cancelling all gatherings of 250 people or more. On March 16, the province declared a public health emergency and prohibited all public gatherings of more than 50 people.
In response, Ballet BC cancelled the two B.C. performances, and the Sydney Opera House also cancelled the performances there.
“To the extent possible, Ballet BC immediately ceased incurring operational expenses in preparation for the performances, and it took all reasonable steps to seek refunds or otherwise cancel any operational expenses that had previously been incurred,” the lawsuit reads.
“Ballet BC did not proceed with any of the performances.”
Ballet BC submitted a claim in June 2020 to Ecclesiastical Insurance to cover the three cancelled performances, seeking a total of about $730,000. That figure was later amended to $740,000.
Ballet BC claims a forensic accounting firm didn’t calculate Ballet BC’s production expense loss but rather its “actual loss sustained.”
The society claims this was a result of calculating Ballet BC’s “lost revenue from the cancellations, deducting all expenses saved by Ballet BC as a result of the cancellations, and by further deducting government funding, subsidies and grants received by, or approved for, Ballet BC.”
Ballet BC argued in its lawsuit that the funding included in the calculations were “sustainability funds, wholly unrelated to Ballet BC’s claim” and which would have been received regardless of the claim or cancellations.
As a result, the accountants found that Ballet BC experienced no loss from the cancelled performances.
Ballet BC is seeking a court order that the insurer is required to pay the insurance funds.
No response has been filed as of press time.