The pandemic has profoundly changed Cirque du Soleil.
Posted at 7:00 a.m.
At the start of the COVID-19 pandemic, the shows were all shut down in one fell swoop. Hundreds of millions of dollars in potential revenue have evaporated. Almost all of the employees have been laid off. Cirque du Soleil had to protect itself from its creditors – who a few months later became the new owners of the company.
Last chapter of this soap opera that was the COVID-19 for the Cirque du Soleil: the company claims 10 million US (12.7 million CAN) from its insurer Westport to compensate for part of its income lost during the pandemic.
Cirque argues that it was insured for US$30 million in the event of a pandemic, while Westport argues that coverage in the insurance contracts was US$20 million. Cirque’s allegations in this civil litigation filed Tuesday in the Superior Court in Montreal have not been proven in court.
Losses of 127 million between March and August 2020
In this lawsuit, Cirque alleges that it lost US$127 million during the first months of the pandemic, between March and August 2020. More specifically, these are losses attributable to the cancellation of touring shows, according to Cirque’s estimate. when he complains to his insurer.
At the start of the pandemic, Cirque had two insurance policies against show cancellations due to extraordinary events such as a pandemic (the example of a pandemic is mentioned in the contract).
The first insurance policy provided for a maximum payment of 20 million US dollars to compensate for loss of income. Westport, which is part of the Swiss Re insurance conglomerate, therefore paid Cirque US$20 million.
The two parties do not agree on the secondary insurance policy. Cirque claims that this secondary policy adds coverage of US$10 million, for a total of US$30 million. Westport estimates total coverage remains at US20 million for the two policies combined.
According to the lawsuit filed by Cirque, Westport denied Cirque’s request for an additional US$10 million payment. The insurer would interpret the contract differently: the limit of 30 million US (20 million + 10 million) would be an insurance deductible and the maximum payment could never exceed 20 million US in total.
Cirque challenges Westport’s decision, saying its interpretation of the contract “is not consistent with the reasonable expectations of the parties nor supported by the wording of the policy. [d’assurance], and that it leads to unrealistic results,” according to the lawsuit filed by Cirque. For the moment, Westport Insurance has not filed its version of the facts with the Superior Court. Both parties declined to comment on the case as it is before the courts.