The wheels are in motion for the first of what could be several civil trials of wrongful death and personal injury claims related to the 2012 mass shooting in a suburban Denver movie theater.
Members of a six-person jury were chosen Sunday, as well as two alternates, and both sides began delivering opening statements Tuesday. The lawsuit against the owner of the Century 16 Theater multiplex in Aurora alleges Cinemark committed various lapses in security that led to the tragedy in which 12 people were killed.
Specifically, attorneys for victims say Cinemark failed to hire sufficient security personnel after previous shootings and violence took place in the shopping mall where the theater is located.
Cinemark, meanwhile, maintains the movie chain “did not have the legal duty to foresee the injury-causing mass murderous assault” committed by gunman James Holmes, nor did it “have the legal duty to prevent it.”
Holmes was found guilty of the crime last summer and was sentenced to life in prison.
His actions caused many to reevaluate the safety procedures of entertainment venues – though they did not cause a material shift in the risk profiles of movie theaters nor an appreciable change in the way insurance companies and underwriters approach entertainment risks.
According to Molly Schory, senior underwriter with sports and recreation MGU K&K Insurance, underwriters are certainly more cognizant of emergency plans and evacuation procedures in light of the events in Aurora.
However, the fundamental risk profile of theaters has not changed.
“The Aurora tragedy has not changed the overall process in which we underwrite theaters and other venues,” said K&K’s Lorena Hatfield, “simply because of K&K’s long history of understanding the risks involved with any large gathering of the public – whether from man-made or natural causes.”
The shooting itself likely triggered insurance policies such as commercial property and business interruption, as well as coverage for reputational damage and crisis management. The theater chain’s commercial general liability policy, however, bore the brunt of the coverage response.
Cinemark Holdings – which owned the Century 16 theater chain – was self-insured for general liability claims with a cap of $250,000 per occurrence and $2.7 million annually. It was also self-insured for medical claims up to $125,000 and fully insured for workers’ compensation claims.
The extreme nature of the losses, however, likely exceeded those limits. In the view of Massachusetts-based Amity Insurance, that’s a reason for insurance brokers working with entertainment venues to review their clients’ insurance policies and internal risk management procedures.
“If you own a public venue of any kind, take a good, hard look at your deductibles and insurance benefit caps for a situation such as this,” the company said. “Large amounts of liability coverage – sufficient to cover potential claims from an event like this many times over – can still be obtained at a very affordable premium.
“Because events like this are so rare, there are many, many theater companies paying in to the risk pool.”
