When entertainment industry executives set plans for spring 2020, they foresaw tens of thousands of people grouped together to watch sports competitions, musical concerts and other communal events. They expected red carpet premieres, film festivals and trade shows. Meanwhile, more movies and TV shows than ever before were budgeted for production amid a thriving economy of content. Then came the COVID-19 outbreak. Hardly anyone saw that coming. Not even the individuals whose jobs it was to assess risk.

In the wake of the now-official global pandemic, event organizers and entertainment producers are reassessing their plans. SXSW in Texas has been canceled. Coachella has been postponed. The latest James Bond film has been moved to November. And suddenly, it’s not inconceivable that sports arenas and stadiums will remain largely empty for months and perhaps longer in what potentially could be a great blow to television broadcasters, even as potential consumption of in-home entertainment could spike thanks to all those people self-quarantining. But even a comprehensive list of all events that have been nixed undersells the scope of a devastating disruption that will be felt for years to come. Worse yet, insiders are slowly concluding that structurally, modern-day entertainment is playing into the hands of a highly communicable viral disease.

Take insurance, which for quite some time has quietly been an influential force in show business. Many municipalities require producers to maintain insurance to stage events. Many banks loaning to film companies also mandate coverage. As a result, practically everyone in the industry has insurance, but far from being a saving grace as losses mount from the disruption caused by coronavirus, these insurance policies may instead be discouraging swift precautionary action.

"The big events probably have insurance for interruption caused by a civil authority, but as an organizer, you can't just cancel because it's the right thing to do," says LeConte Moore, managing director of Risk Strategies' entertainment and media practice. A leading insurance broker, Moore adds, "Well, you can [cancel], but it wouldn't be covered. Let's say an organizer wants to cancel out of safety. That's not a trigger. The virus is beyond their control, but it has to be something made necessary. It can't just be the fear of the virus spreading. That never has been or will be covered."

In other words, unless government steps in and bars large gatherings (as what is now happening in Seattle) or sets up a containment area that makes travel impossible (as has occurred in New Rochelle, New York) or orders people to stay indoors (see Italy), event organizers can't assume they'll recover losses. Accordingly, despite growing calls on social media and elsewhere to proactively take steps that could head off community spread of the virus, many event organizers are waiting for a triggering event under their insurance policies. Mixed messages about the COVID-19 threat from the Trump administration haven't helped at a time when some leading scientists are pleading for preventive measures if only to slow down the spread to allow hospital facilities to handle the load.

One organizer of an event scheduled for early May, who insisted upon anonymity because he's still working on contingency planning that he didn't wish to jeopardize, says there's nothing to do but hedge. He says he has a contract with a New York venue, which itself has insurance, and that under his deal he'll be out full cost if he pulls the plug now. So he's closely watching information put out by the World Health Organization and the Centers for Disease Control and Prevention and he's attempting to organize others to shame venues who "profit off of coronavirus." But for now, the event is still on.

"Those who have insurance aren't really insured," he wearily concludes, adding, "We'll come out of this with injuries."

Entertainment executives are now swamping insurance attorneys with requests to review policies in light of everything occurring on the coronavirus front and advise about what to do. Unfortunately, ambiguity reigns. For example, if New York City decided to stop people from using its subway system, Broadway producers may see that as something done beyond their control that makes cancellation of shows necessary. But insurers could disagree. After all, couldn't people walk to theaters?

According to Gretchen Hoff Varner, a top insurance litigator at Covington & Burling, many insurers began crafting exclusions after the SARS epidemic back in 2003. But not even that scary outbreak really prepared the risk-management industry for what was coming this year.

"Insurance is just a contract," she says. "The specific language in each policy really matters. Some policies might exclude coverage for contagious disease. Others might only have exclusions for pandemic." (The World Health Organization on Wednesday declared the COVID-19 outbreak a pandemic.)

And what about those "force majeure" provisions covering disruptions due to acts of God? Well, there's mixed opinion on whether those apply to a virus. Some lawyers expect this area to be hotly litigated.

"Many ask: 'Aren't we covered for force majeure?'" says Moore. "Yes, you are covered by many acts of God like fire and earthquakes, but not every force majeure is covered. [The virus] is an act of God, but it doesn't cause anything physical to the premises. People are upset by that."

Litigation takes years — and many in entertainment don't have time to waste when the coronavirus threat demands immediate response. In the years ahead, businesses and insurers may be in court quarreling over whether a virus meets the definition of "bodily harm" under property insurance or what risks are "foreseeable" and thus excluded from coverage.

At the moment, though, the best that any entertainment producer can do is to consult attorneys and insurers on mitigation. No surprise then that some events are being postponed while other events could happen without live attendance. Los Angeles Lakers star LeBron James might not like the idea of playing basketball with no fans around, but the alternative may not be cancellation but rather the status quo, that is, until the government does something that makes hosting a game out of the question. (UPDATE: On Wednesday, the NBA suspended its season after a player tested positive and California moved to ban large gatherings.)

Long-term, everything could get worse — much worse — as insurers are flooded with claims and they craft new exclusions for the novel coronavirus.

How might that impact something like the 2021 Oscars, which few (understandably) are thinking about? Or movies and TV shows that haven't yet been through production and won't be coming out for quite some time? Some of those works may never even get off the ground now.

"For films that are financed through bank production loans, the bank requires that it be the beneficiary of a [form of insurance called a] completion guarantee," says Robert Darwell, a transactional attorney at Sheppard Mullin. "These completion guarantee agreements cover most events — there are some exclusions like nuclear war — but my understanding is that the completion guarantors are now selling separate riders that will cover the coronavirus. But this is for an additional cost — and, on a modestly budgeted film, this can be a hardship because such cost was not budgeted."

Some like Moore worry that the spread of the coronavirus plus the flight by insurers "could stall the greenlighting of banks loaning money" for filmmaking altogether.

But even if that's not the case or the devastating consequences are limited to indie filmmaking, the industry is merely beginning to wrap its head around what this pandemic will mean as actors are not always being able to make it on set or promotional events becoming very difficult to pull off. Says Akin Gump attorney Chris Spicer, "A production is like a small town or community with people coming in from all over the world. If we're closing down theaters and live events, you could easily see why there would be a concern that productions would also be shut down … The slew of issues created is not insurmountable but they are substantial and need to be addressed."