Paramount Pictures has filed a $100 million breach of contract lawsuit against its insurance company, Chubb, in California federal court for not living up to the terms of the coverage that was designed to protect the studio during the production of Mission: Impossible 7. The lawsuit against Chubb and its parent company, Federal Insurance Company, comes in the wake of the COVID-19 pandemic, which forced Paramount to delay production on the sixth sequel of the hit action spy series.
The lawsuit states that under the policy’s terms, the insurer must reimburse the studio for the losses it sustained by the unavailability of any covered person, according to The Hollywood Reporter. The complaint doesn’t identify who tested positive for COVID-19 on the film’s set, which caused Paramount to initially shut down the production in February 2020 in Venice, Italy.
Paramount had a cast insurance policy for the production, with a $100 million coverage limit. Such insurance policies are intended to cover losses that result when a member of a movie’s key personnel is unavailable due to sickness, death or kidnapping.
The insurer has only agreed to pay the studio $5 million, however, according to the complaint. Chubb has maintained that the COVID-19 shutdowns are covered only under Paramount’s civil authority policy, which covers costs that are the result of government-mandated shutdowns. That policy carries a $1 million limit.
But the studio says its losses far exceed that amount. It also maintains that the pandemic-related shutdowns should have triggered the cast insurance provision of the policy, because the shutdowns were intended to protect the cast from getting sick.
Following the initial delay in production on Mission: Impossible 7 due to illness, it was then suspended again when the Italian government imposed a quarantine order. As a result, disagreement arose over what and how coverage applies to Paramount’s claims.
“Ultimately, Federal contended that only part of Paramount’s claimed losses were covered under the Policy,” states the complaint. “Specifically, on July 1, 2020, Federal wrote to Paramount, stating that it would pay for the losses caused by the covered person’s illness in February 2020 subject to its adjustment of the submitted covered expenses.
Te complaint continues, “However, Federal stated that the $100,000,000 Cast coverage was not available for most of the remaining portions of Paramount’s losses. Federal claimed that Paramount’s losses arising from the pandemic, orders of civil authorities and the need to mitigate could only be covered under the Policy’s Civil Authority coverage, and then that all the losses would be subject to a single $1,000,000 limit of liability.”
“Remarkably, Federal stated that there was no evidence that those cast and crew members could not continue their duties, despite being infected with SARS-CoV-2 and posing an undeniable risk to other individuals involved with the production,” the complaint added.
Mission: Impossible 7 was able to resume production in July 2020 before another delay arose in October, following a COVID-19 spike. The drama’s shoot then resumed again only to be shut down again, then resumed again in the U.K. this past February, only to eventually suspended a fifth time. After the production then moved to Abu Dhabi, it incurred more delays before it moved back to the U.K., where it continues to be troubled by the virus.
The movie was written by Christopher McQuarrie, who’s also serving as the helmer and one of the producers, alongside Cruise and J. J. Abrams, who made his feature film directorial debut on 2006’s Mission: Impossible III. The seventh installment is now slated to be distributed in theaters on May 27, 2022, before it receives a streaming release on Paramount+ in July 2022.