The long-standing legal clash between South by Southwest (SXSW) festival organizers and their insurer, Federal Insurance Co., has come to a quiet conclusion. The dispute, rooted in coverage issues after a COVID-19 cancellation prompted a ticket-holder class action, has now been settled, according to a joint motion filed in a Texas federal court on Monday.
Settlement Ends Bitter Legal Feud
SXSW LLC and Federal Insurance Co. have agreed to dismiss the case with prejudice, meaning neither side can refile the claims, and both parties will cover their own legal costs and fees. The terms of the settlement remain confidential, but the agreement puts an end to the heated debate surrounding the insurer’s obligation to defend and indemnify SXSW.
The festival, an annual event in Austin, Texas, known for showcasing music, film, and technology, was forced to cancel in March 2020 due to the pandemic. The cancellation sparked a class action lawsuit by frustrated ticket holders, who accused SXSW of breach of contract, unjust enrichment, and conversion, claiming they were owed refunds.
SXSW Coverage Dispute Settlement : Courtroom Drama Over Policy Exclusions
SXSW filed suit against Federal Insurance in October 2021, asserting that their directors and officers policy should cover the legal costs arising from the ticket-holder class action. However, the district court initially ruled in favor of the insurer, citing a contract exclusion in the policy that appeared to block coverage.
