SXSW sues insurance company
South by Southwest, or SXSW, the annual music festival held in Austin, Texas,  is suing its insurance company for failing to finance its defense in a class action case.

SXSW was sued in April last year on behalf of ticket holders who were not granted a refund for the event after the city cancelled it due to COVID-19.

SXSW was one of the first major events to be canceled because of the pandemic in March 2020.

The organizers stated that they were unable to issue refunds because the festival spends a significant amount of money planning to hold a festival. Rather than that, organizers provided ticket holders the option of extending credentials to a later date and the opportunity to purchase tickets for the following year at a 50% discount.

While over 80% of ticket holders accepted this offer, some attendees were dissatisfied and launched a lawsuit against South by Southwest in April of last year. Attendees Steven Leventhal, Maria Bromley, and Kleber Pauta submitted this.

According to recent reports from Pitchfork, the festival and the plaintiffs reached an agreement over the complaint filed by Bromley and Pauta.

Additionally, on September 30, a district court judge granted preliminary approval of the deal.

Austin attorney Peter D. Kennedy filed a complaint in the United States District Court for the Western District of Texas alleging that SXSW purchased a $1 million insurance policy from Federal Insurance in August 2019 and has stated that the company is not fulfilling its obligation to defend and indemnify the event.

Kennedy is also alleging that SXSW`s Federal Insurance policy covers liability and obligates the festival to pay for its legal defense in the class action case.

Federal Insurance stated that the insurance contains language excluding coverage for contractual disputes and professional services. Additionally, Kennedy stated that Federal Insurance is committed to defend the organizers against accusations of conversion and unjust enrichment.

Kennedy has petitioned a district court judge to compel Federal Insurance to fund SXSW`s legal defense and any resulting damages, interest, and legal fees.