Paremount’s Mission Impossible 7 was originally going to be released last month, but delays due to shutdowns from the COVID-19 pandemic has pushed the film twice, first to November of this year and currently to May of next year. Paramount Studios took out a $100 million insurance policy to cover the availability of key figures in the production of the film and the studio is now suing its insurer over what the studio claims is a breach of contract over the insurer’s differing position on what it is is responsible for in terms of the COVID shutdowns.
The lawsuit, which was filed in federal court in California, asserts that Federal Insurance Company was responsible to cover Paramount for any losses that the studio suffered from the unavailability of any “covered person.” What that means with a pandemic, though, is something that it looks like courts are going to have to determine.
Everything started in February of 2020 when the production of the Tom Cruise-led film had to be halted due to a “covered person” coming down with COVID. Federal allegedly only paid Paramount $5 million for that shutdown.
The bigger conflict, though, occurred when the Italian government ordered a quarantine shutdown on the filming a few weeks after the initial delay. The complaint alleges, “Ultimately, Federal contended that only part of Paramount’s claimed losses were covered under the Policy. 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. 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.”
The complaint also makes the shocking allegation that, “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 production on the film picked up again in July before shutting down again in October 2020 after a COVID spike. It has been delayed another three times since then and each time, Paramount has notified Federal to cash in on its insurance coverage, but as noted above, Federal disagrees with Paramount as to what it owes the studio.
This case will likely be closely followed by other film studios looking for similar guidance as to what its insurers owe for filming shutdowns due to COVID.
Source: The Hollywood Reporter
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