In a dramatic escalation of one of Hollywood’s most combustible legal dramas, a North Carolina-based insurer has petitioned a federal court to withdraw from a high-profile dispute involving actor-director Justin Baldoni and actress Blake Lively, contending that it bears no responsibility for a mushrooming web of legal costs stemming from alleged misconduct on the set of It Ends With Us. Lively is married to Ryan Reynolds, famous for his role as Deadpool and co-owner of Wrexham football team.
Harco National Insurance Company filed a declaratory action in the Southern District of New York on Monday, asserting that its directors-and-officers (D&O) and employment practices liability policies issued to Baldoni’s Wayfarer Studios are inapplicable to the ongoing litigation. At issue is whether Harco must defend or indemnify Baldoni and Wayfarer in the face of Lively’s lawsuit alleging sexual harassment and retaliatory conduct.
According to Harco’s 21-page complaint, the timeline of events is critical: Lively’s allegations concern incidents said to have occurred during the spring of 2023 – months prior to the effective dates of Harco’s coverage, which commenced in mid-July of that year. Harco also alleges that Wayfarer failed to disclose those accusations when renewing the policies for the 2024 term.
"The defendants knew, or should have known, of a situation reasonably likely to lead to a claim, and yet represented to Harco in writing that no such knowledge existed,” the complaint reads. “Coverage is therefore precluded by the plain terms of the warranty.”
The filing marks a pivotal moment in a legal saga already embroiled in celebrity, counterclaims, and corporate intrigue. The backdrop includes a defamation and extortion countersuit filed by Baldoni, who accuses Lively and her husband, actor Ryan Reynolds, of launching a reputational smear campaign. That suit seeks US$400 million in damages and has drawn in other Hollywood figures, including Taylor Swift, who was subpoenaed in a related proceeding.
For insurance professionals, Harco’s move highlights the complex risk calculations underpinning media and entertainment policies, particularly as the industry continues to grapple with the #MeToo movement’s legal reverberations.
Harco’s lawsuit seeks a declaratory judgment affirming that it has no obligation to fund defense or settlement costs. The coverage at issue includes US$2 million each in limits for D&O and employment-related liabilities.
In correspondence cited in the filing, Harco claims it first became aware of Lively’s accusations in April 2025 – months after her legal team sent Wayfarer a formal notice of complaint in late 2023 and discussed additional allegations during a January 2024 meeting.
Despite these developments, Wayfarer’s July 2024 renewal application stated that no “claim, notice of potential claim, or any situation that may give rise to a claim” had emerged within the past year.
If Harco succeeds in extricating itself from the litigation, Baldoni and his corporate affiliates – including billionaire Wayfarer co-founder Steve Sarowitz – may face a seven-figure legal tab without the benefit of policy-backed defense. The outcome could carry lasting implications for entertainment risk underwriting.
Wayfarer and its executives, including CEO Jamey Heath, have not commented publicly on the complaint. A spokesperson for Lively also declined to address the insurance dispute, noting only that her harassment claims remain on track for trial in March 2026.
The litigation now enters a decisive phase, with Harco seeking to formalize its refusal to defend Baldoni while the broader dispute continues to unfold in parallel proceedings. A New York judge in June dismissed part of Baldoni’s countersuit – specifically a defamation claim against The New York Times – but other facets of the case remain active.
As the entertainment world watches closely, risk managers and insurers may find themselves rewriting policy protocols in the wake of this unfolding clash.
It’s a reminder that in the business of storytelling, the fine print in the contracts might end up mattering more than the box office receipts.
Founded in 1973 and headquartered in Rolling Meadows, Illinois, Harco National Insurance Company is a specialized provider in the US property and casualty market. Located at 1701 Golf Road, the company has long operated at the intersection of niche underwriting and regional expertise. Since 2001, Harco has been a member of the IAT Insurance Group, a privately held holding company with over $1 billion in assets, providing Harco with the financial foundation to support long-term risk strategies.
Harco concentrates its efforts on specialty lines, including coverage for trucking fleets, auto dealerships, rental and leasing operations, and homeowners insurance. This focused portfolio has enabled the company to develop targeted underwriting capabilities and sustained operational performance. Its policies are primarily distributed through independent brokers and agents across the United States, with particularly strong regional footprints in Connecticut, Massachusetts, and North Carolina.
The company holds an “A– (Excellent)” rating from A.M. Best, reflecting a well-capitalized balance sheet, stable operating income, and prudent reinsurance practices. Harco operates under a formal enterprise risk management framework, backed by reinsurance partners that are also rated “Excellent” or higher. The firm employs approximately 75 to 100 people.
