The U.S. District Court for the Western District of Texas, Austin, has deemed an insurer not responsible for 2020 event cancellation and ticket refunds. The case is SXSW, LLC. v. Fed. Ins. Co., No. 1:21-CV-00900-RP, 2022 U.S. Dist. LEXIS 92709 (W.D. Tex. May 24, 2022).

In 2020, the South by Southwest (SXSW in this article and colloquially known as "South By") annual music festival was canceled due to the COVID-19 pandemic. Festival officials canceled that year's planned event and allowed ticket holders the option to defer 2020 tickets to any festival season between 2021-2023. Some ticket holders argued they should have been offered a cash refund option instead, but in the U.S., ticket buyer rights are governed by state statute, so decision makers at SXSW were under the impression that they were within their rights in offering a replacement ticket. In response, ticket holders filed a class-action lawsuit against SXSW, alleging breach of contract, unjust enrichment, and conversion.

In the underlying suit, ticket holders and SXSW reached a preliminary settlement, finding that any ticket holder who deferred their tickets were eligible for a $30 cash payment while individuals who had not deferred could claim 40% of the original ticket price. After reaching a settlement with the ticket holders, SXSW looked to insurer Federal Insurance Co., to recover damages. Federal denied the claim, pointing to a professional services exclusion in its policy which stipulated that in such circumstances, the insurer was not obliged to cover any legal fees. SXSW filed suit against the insurer.