Paramount Sues Chubb Over ‘Mission Impossible’ COVID-19 Delays

Shutdowns costs Paramount weeks of filming of "Mission Impossible 7."

By John Hilton

"Mission Impossible 7" is proving darn near impossible for Paramount Pictures to complete, due mostly to a series of COVID-19 shutdowns.

The film has shut down seven times, according to the Los Angeles Times, and Paramount filed a lawsuit Monday, claiming that its insurer did not fully pay up for its losses incurred when the cameras were silenced.

In its complaint, the studio claims it purchased coverage from Federal Insurance Co. that was supposed to cover more than $100 million in losses if cast members aren’t able to take part in the production, resulting in delays or interruptions.

"Federal paid only a small portion of Paramount’s losses, denying coverage for the majority of them," reads the complaint filed in Los Angeles federal court. "By doing so, Federal breached the parties’ contract. Furthermore, Federal acted unreasonably, choosing to favor its interests over those of its insured, tortiously breaching the implied covenant of good faith and fair dealing."

Chubb has declined to comment on the suit.

Several film and television productions have endured costly delays during the pandemic. Chubb was similarly sued last month by the producers of the "The Morning Show" on Apple+.

Many Shutdowns

The blockbuster vehicle of star and producer Tom Cruise, “Mission: Impossible 7” was supposed to start in Venice, Italy, on Feb. 24, 2020. However, it was shut down three days before the scheduled start because someone involved became ill, according to the complaint.

Cruise famously became irate at the lax adherence to COVID-19 protocols on the set, threatening in a December viral video to fire anyone on the spot who ignored them.

After past virus scares, such as the SARS outbreak in 2003, many insurers sold policies with exclusions for viruses. Federal did not include that exclusion in its policy, Paramount said in the lawsuit.

"Since at least 2006, Federal could have used a 'virus or bacteria' exclusion approved for use throughout the United States," the complaint reads. "As one recent article succinctly stated, 'Insurers knew the damage a viral pandemic could wreak on businesses. So they excluded coverage.'

"However, even though Federal was aware of the massive losses that its insureds, including Paramount, could face from a virus-related pandemic, it sold Paramount the policy at issue without a virus, pandemic, or any other potentially applicable exclusion.

'An Undeniable Risk'

Paramount said Federal's response to its shutdown claims bordered on the cavalier.

"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 lawsuit reads. "Federal also stated, contrary to the guidance of the world’s leading health and medical authorities, that it did not see how incurring costs for COVID19-related safety protocols, such as personal protective equipment, could reduce a covered loss."

Paramount claimed its losses “far exceeded” the $5 million that Federal had agreed to pay for the first instance of coronavirus in February 2020. The studio is seeking a jury trial and unspecified damages.

“Mission: Impossible 7” is seemingly back on track and due to be released in May 2022.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.