Justin Baldoni’s Company and Co-founder Steve Sarowitz Are Suing Top Insurers, Alleging Denial of Coverage to Fight Blake Lively’s Lawsuit, Revealing Deeper Financial Strains in Hollywood’s Bitter Legal Saga.
Los Angeles, California [US]: Remember when we heard about Justin Baldoni’s Wayfarer Studios co-founder, billionaire Steve Sarowitz, allegedly vowing to “spend up to $100 million to ruin” Blake Lively? That shocking claim came amidst the swirling controversy surrounding her film, It Ends with Us, and a very public dispute with her co-star and director, Baldoni. Well, a new lawsuit filed this week in California state court by Sarowitz, Baldoni, and Wayfarer itself, suggests that perhaps Sarowitz meant he’d spend someone else’s money to make good on that promise.
Less than a year away from a high-stakes trial with Lively in New York City over her sexual harassment, defamation, and retaliation claims, the Wayfarer team is now directly confronting some of the world’s biggest insurance companies. Their bold move? They’re suing them for allegedly denying coverage to defend against Lively’s formidable legal assault.
The lawsuit names Baldoni, Sarowitz, It Ends With Us Movie LLC, Wayfarer Studios itself, and CEO Jamey Heath as plaintiffs. They’re demanding that New York Marine and General Insurance Company, QBE Insurance Corporation, various underwriters at Lloyd’s, and others honor their policies, which, according to the suit, promise to defend and indemnify them against lawsuits, including those alleging defamation.
The core of the Wayfarer team’s complaint is clear: “The Insurers sold Wayfarer and IEWUM insurance policies promising to defend and indemnify the Insureds against, among other things, lawsuits alleging defamation.” They claim that after Blake Lively filed her lawsuit, they promptly notified their insurers and requested the promised defense and support. However, instead of upholding their duties, the insurance companies allegedly “ignored their duty to defend while they purported to ‘investigate.'” Following this “investigation,” they then flat-out “denied coverage, breaching their duties, refusing to honor of their duties to the Insureds.” Consequently, Wayfarer and its co-plaintiffs argue that the insurers are liable for breach of contract and tortious bad faith, demanding compensatory, consequential, and even punitive damages.
This isn’t the first time the Wayfarer group has faced legal setbacks recently. Back in June, Baldoni’s own whopping $400 million lawsuit against Lively, her husband and Deadpool star Ryan Reynolds, their publicist, and The New York Times was completely tossed out. And if that wasn’t enough, the Wayfarer entities are already facing another lawsuit filed earlier this month in federal court, concerning a separate insurance policy.
Filed on July 21, that federal suit sees Harco National Insurance Company seeking a declaratory judgment against Wayfarer. With New York Marine and Lloyd’s now undoubtedly paying close attention, Harco is seeking a court ruling that they don’t have to shell out a dime to “defend or indemnify” Baldoni and his Wayfarer team. Harco’s argument is quite direct: they claim that Wayfarer allegedly violated policy terms by failing to inform the insurance company that “Lively and others complained of sexual harassment during pre-production and production of the Film.”
In this new front against New York Marine and Lloyd’s – and perhaps spurred by the existing Harco lawsuit – the embattled Baldoni camp appears to have taken their time responding to their insurance company’s cold shoulder, but eventually they fired back.
“On July 28, 2025, the Insureds’ counsel responded to New York Marine’s May 15, 2025, letter, explaining why New York Marine was wrong in denying coverage and asking New York Marine to withdraw its denial of coverage, to agree to defend the Insureds, and to pay for the attorneys’ fees and costs that the Insureds have incurred, and continue to incur, in defense of the Lively Lawsuit. New York Marine has not assumed its duty to defend,” states the breach-of-contact action filed on July 30 in L.A. Superior Court.
The lawsuit further asserts: “Wayfarer and IEWUM have been paying for the defense of Mssrs. Baldoni, Heath, and Sarowitz in the Lively lawsuit. They are entitled to be reimbursed for all such defense fees and costs they have paid.”
Representatives for Baldoni and Wayfarer, as well as New York Marine’s parent company, did not respond to requests for comment on Friday regarding this latest legal salvo. Spokespeople for Blake Lively and her legal team also declined to comment.
While the exact sums aren’t cited in the nine-claim LASC complaint, it’s clear that after brawling in the courts with Lively, Ryan Reynolds, The New York Times, and a constantly shifting cast of other defendants since December 2024, even the deep-pocketed Sarowitz must be feeling the pinch of mounting legal fees. As the saying goes, top Hollywood litigators like Bryan Freedman don’t come cheap.
Interestingly, it’s not Freedman representing Team Wayfarer in this new insurance dispute. McGuireWoods LLP is handling the heavy lifting and lawyering here. This new legal battle on the West Coast stands a very good chance of still being active by the time Lively and Baldoni face off over the main case in Judge Lewis Liman’s East Coast courtroom on March 9. The drama, it seems, is far from over.