Universal Music Group (UMG) has filed suit against three insurance companies, alleging that they breached contracts indemnifying UMG against certain damages incurred in an ongoing suit brought by TVT

LOS ANGELES -- Universal Music Group (UMG) has filed suit against three insurance companies, alleging that they breached contracts indemnifying UMG against certain damages incurred in an ongoing suit brought by TVT Records.

The latest action, filed June 1 in California Superior Court in L.A. (case no. BC316357), names as defendants three subsidiaries of New York-based American International Group Inc. (AIG): American Home Assurance Co., National Union Fire Insurance Co. of Pittsburgh and AIG Europe S.A.

According to the suit, UMG had multimillion-dollar policies with the AIG companies from 2001-03. These policies covered payments in legal cases, including those involving "property damage" and "media liability."

The policies, in which UMG parent Vivendi Universal was the named insured, also insured certain unnamed UMG officers, directors and employees.

In August 2002, UMG's Island Def Jam Music Group (IDJ) and its then-chairman Lyor Cohen were sued by TVT. The suit claimed that IDJ and Cohen had wrongfully blocked TVT's release of an album featuring rapper Ja Rule and producer Irv Gotti.

UMG's action claims that AIG was advised of the suit in October 2002. It alleges that a Nov. 14, 2002, letter from American Home Assurance denied coverage to UMG, and that National Union and AIG Europe failed to acknowledge coverage.

In March 2003, a jury returned a verdict in TVT's favor. That verdict is currently being appealed.

In May 2003, the jury awarded $24 million in compensatory damages to TVT. Punitive awards were later reduced; that reduction is the subject of pending motions filed by TVT's attorneys.

UMG claims that following the entry of a final judgment in the TVT case in September 2003, it was "unable to negotiate fair and reasonable terms with AIG to post a bond," and deposited more than $62 million with the court.

The suit alleges that on March 11 of this year, AIG stated that National Union refused to reimburse UMG for the costs of the defense in the TVT lawsuit, and refused to indemnify UMG.

The AIG companies "have not paid any portion of the fees and costs that Island Def Jam and Mr. Cohen have incurred in the defense of the TVT lawsuit," according to UMG's action.

UMG seeks general and punitive damages to be determined, attorneys' fees and expenses, and declarations that it has a right to indemnification under the disputed policies.

An AIG spokesman says the company does not comment on legal matters.

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