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Insurance Coverage Issues Relating to the Colorado Theater Shooting

Blogs, Insurance Coverage

In the coming months, family members and victims of the tragic Colorado movie theater shooting may pursue civil liability claims against Cinemark Holdings Inc., the owner of the theater where James Holmes killed 12 people and wounded approximately 59 others.

Cinemark is apparently self-insured for general liability claims with a cap of $250,000.00 per occurrence and approximately $2.7 million annually. The company is also self-insured for medical claims up to $125,000.00. There is a significant coverage issue looming with respect to the shootings – whether each shooting is an individual occurrence, or whether the event as a whole is to be deemed a single occurrence. 

A decision on this issue will not only affect the available coverage for the theater but the decision will also set significant precedent for future claims against private companies following incidents of mass violence. 

Unlike other incidents of mass violence, such as the Columbine High School tragedy, where a court dismissed suits brought against the school district because the school qualified for government immunity, and the Virginia Tech shooting where the $4 million jury award to families of each victim was capped at $100,000.00 under the state cap that limits government liability, there is no governmental immunity for the theater in this instance. 

The tragedy in Colorado presents a unique issue regarding coverage under a general liability policy because it is one of the first instances where an event of mass violence occurred on private property. It is unknown whether Cinemark has an excess or umbrella policy covering liability beyond the general liability limits, but for other theaters and entertainment providers, the tragedy in Colorado highlights a potential issue regarding insurance coverage. Operators should confirm their relevant limits and be sure that they are adequately covered on a per-occurrence and aggregate basis. While there is certainly an issue as to whether the theater could or should have foreseen such a horrific act, and therefore protected against it, the fact remains that significant litigation will likely ensue in the aftermath of this tragic event.