NBCUniversal Goes to War With Insurer Over Refusal to See Hamas as Terrorist Group

USA Miniseries Dig - H 2014

USA Miniseries Dig - H 2014

Geopolitics has come to Hollywood in an unusual way, the subject of a new lawsuit from Universal Cable Productions after its insurer refused to cover expenses after rocket attacks were hurled into Israel.

USA Network's Dig, a mystery-thriller miniseries set in Jerusalem about an American FBI agent investigating a death, began filming in Israel before halting and then moving production to New Mexico as a result of security tensions in the region. 

According to a complaint filed by Universal Cable Productions in California federal court on Monday, the U.S. State Department attributed the attacks to Hamas. When that happened, Universal says it submitted a claim to Atlantic Specialty Insurance Company, which denied coverage due to an exclusion for war or warlike action. Universal contends that coverage should have been provided because acts of terrorism are not excluded.

Thus, the very hot question this case poses is whether Hamas' acts were symptomatic of war between sovereign nations or should be classified as an act of terrorism. 

"The United States government does not recognize the Gaza Strip as a sovereign territorial nation, and does not recognize Hamas as a sovereign government," states Universal in its complaint. "Rather, the United States government has officially designated Hamas as a terrorist organization. Nevertheless, Atlantic has ignored the United States government position and applicable law. It claims Hamas is a sovereign or quasi-sovereign government over the Gaza Strip territory (even though Atlantic admits the Gaza Strip is not a recognized sovereign nation), in a self-serving attempt to invoke the war exclusion and avoid its coverage obligations."

According to the complaint, a representative of Atlantic told NBCUniversal in a letter dated July 28, 2014, that "the terrorism coverage should not apply” because the focus of the acts “is not the United States or its policy” and “the U.S. Secretary of the Treasury has not certified the [Hamas/Israel] events as acts of terrorism.”

Ultimately, in March 2015, USA was able to complete and broadcast a 10-episode season of Dig, created by Homeland and Tyrant creator and Israeli director Gideon Raff.

But that's not stopping Universal from going to court to get reimbursed for more than $6.9 million in extra expenses after paying an insurance premium of more than $1.85 million. In the complaint, the plaintiff cites State Department reports and travel advisory warnings about Hamas and says that Atlantic initially agreed that an insured event had occurred before changing its position. The plaintiff, represented by Lucia Coyoca at Mitchell Silberberg, also demands exemplary and punitive damages.