Paramount has reached a confidential settlement with its insurer, Chubb, over claims arising from repeated COVID-19 production delays in “Mission: Impossible 7.”
The studio filed a lawsuit in August 2021, alleging that the insurance company was trying to limit its losses to just $1 million. Paramount claimed it owed much more, and that the COVID-19 shutdown should have resulted in insurance coverage up to $100 million.
The two sides are due to start mediating in the dispute on Thursday. But on Wednesday they filed a notice in federal court indicating they had reached a settlement.
Both parties stated that “a formal written settlement agreement has been prepared, commented and finalized.” The parties expect to implement a final written settlement agreement by August 5, 2022.”
“Mission: Impossible 7” is now scheduled for release on July 14, 2023, two years after its original schedule. Production began in February 2020, just as the pandemic spread across the world. In the end, production stopped seven times.
Chubb paid $5 million on a casting insurance policy for the first closing. But in subsequent closings, the insurer took the position that the casting insurance policy had not been triggered, and liability was limited to only $1 million under the policy’s “civil authority” clause.
Producers get cast insurance because of the risk of incurring heavy costs if the director or one of the film’s stars falls ill or dies during production. Paramount took the position that the casting insurance policy should have been activated, because the shutdowns were intended to prevent managers from getting sick. Chubb argued that production was halted due to government orders, providing civilian authority, usually intended to cover events such as riots or hurricanes.
In an amended complaint, Paramount also accused Chubb of trying to interrupt coverage of Mission: Impossible 8, which began filming earlier this year. Last October, Chubb notified the studio that the policy would expire on December 31, 2021, and would not be renewed. The studio argued that Chubb promised to extend the policy as needed until production was complete. Paramount also alleged that Chubb offered to extend the policy, but only if premiums were increased significantly or coverage was sharply reduced.
Mission: Impossible 8 is scheduled for release on June 28, 2024.
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