Explained: Why Paramount is suing insurer over Mission Impossible 7 COVID-19 policy

Paramount Studios is suing its insurer, Chubb National Insurance Company, for not covering the vast majority of its losses due to pandemic-related shutdowns on the sets of Mission Impossible 7.

In a suit filed in California’s federal court, the studio’s lawyers claimed that Paramount had incurred severe losses and damages as it was forced to postpone and suspend the production of the Tom Cruise starrer "due to Closure Orders affecting different filming locations, cast illnesses, and the need to protect cast and crew and its locations from exposure to SARS-CoV-2". 

A brief on the case

• Production on Mission Impossible 7, which is slated to release on 27 May 2022, was delayed seven times between February 2020 and June 2021. COVID-19 was cited as the reason behind the delay six times.
• However, the studio’s insurer Chubb has said that it would only pay $1 million for the losses incurred due to the coronavirus. The insurer said the amount was decided through its “civil authority policy,” which covers only government-mandated shutdowns.

What is Paramount’s position on the issue?

• Paramount has disputed the claims of the insurer. The studio had taken out a hefty $100 million insurance policy that was intended to cover losses when key persons related to the project, such as Tom Cruise or director Christopher McQuarrie — are unavailable due to sickness, kidnapping, or death.
• The studio claimed that the halt in production was due to COVID-19 should come under the insurance policy since the shutdowns were intended to protect the cast from getting sick.
• The plea filed by the studio in court states that production had halted in February 2020 because someone covered in the insurance policy got sick. Chubb had paid $ 5 million in connection with the delay.
• The production was further delayed due to virus outbreaks on the sets in Italy, where the movie was being shot, and coronavirus restrictions in the country.
• However, the insurer has refused to acknowledge further claims, according to Paramount.
• Paramount’s claim is the latest in a string of studios filing a case against their insurers for not covering losses generated due to the coronavirus. Previously, Ben Affleck’s Hypnotic and AppleTV+’s The Morning Show have sued insurers for the same.

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