Insurers escape heavy Universal Studios loss
Insurers are not expecting to face a significant payout from the blaze that caused damage to the Californian theme park and studio lot of Universal Studios at the start of the month.
Losses from the event are unlikely to exceed $50mn and, with large deductibles on the cover, a claim would result in a “tiny loss” for the insurance market, according to senior broking sources.
Cover comes under the insurance programme of parent company General Electric (GE), which has an 80 percent stake in entertainment company NBC Universal, which operates Universal Studios.
It is thought the Marsh-brokered programme is placed across the London market.
A Universal Studios spokesman said the company was in discussions with insurers through GE.
“We’re definitely in conversations with multiple insurance providers,” said the spokesman.
The spokesman added that, despite reports of the ultimate size of losses, it was still too early to say what the final figure would be.
“It’s so early in the assessment process, we’re just in the early stages,” added the spokesman.
The park was forced to close to the public on 1 June by authorities as the fire raged for 12 hours, destroying around five acres of the 400-acre studio lot. The spokesman said the park was also covered by business interruption insurance.
The theme park is thought to attract around 25,000 visitors a day at this time of the year.
The fire was started by workmen using blowtorch equipment at the Universal Studios park in Los Angeles. The blaze was tackled by around 500 firefighters but the situation was exacerbated by low water pressure caused by a drought in the southern US state.
In 1990, a fire started by a security guard at the same part of the studio caused $50mn of damage.
In 2003, former owners Vivendi issued a $175mn bond, Studio Re, to cover the studios against a Californian earthquake.