Paramount Pictures’ spy actioner ‘Mission Impossible’ starring Hollywood heartthrob Tom Cruise is inarguably one of the most high-profile film franchises globally. Regarding its forthcoming installment ‘Mission Impossible 7’, it is well known that the film’s production was previously delayed multiple times starting from February 2020, then in March 2020, two times in October 2020, and subsequently three more times mostly because of COVID-19 pandemic.
Considering the high stakes, Paramount owns a massive $100 million insurance policy through Federal Insurance Company (Chubb’s parent company), for risks associated with top cast availability. The insurance policy was taken to cover risks pertaining to the unavailability of key cast members, like Tom Cruise or director Christopher McQuarrie, due to sickness, death, or kidnapping.
However, when Paramount asked for reimbursement for financial losses owing to pandemic induced production delays, the insurance company reportedly refused to cover the majority of losses incurred by the studio. This resulted in a breach of contract lawsuit filed by the studio against the insurance company. The suit stated that:
“Federal arbitrarily categorized several of Paramount’s losses as subject to only one limited category of coverage (which provided for coverage of just $1 million in connection with each single loss), and unjustifiably refused to cover other losses altogether.” It was also remarked that only $5 million were paid against much greater losses incurred by the studio.
The insurance company’s contention is that Government-mandated shutdowns including pandemic induced ones are covered only under the studio’s ‘civil authority’ policy which is limited by a $1 million capping. The suit did not disclose the exact amount demanded by Paramount other than the complaint that $5 million comprises just a small portion of the total losses incurred.
In these cases, the final verdict of the lawsuits is largely dependent on the precise wordings of the insurance policy and its legal interpretation. So, it remains to be seen whether Paramount would get the remaining amount of incurred losses or just $1 million per loss instance aspect would hold true.
‘Mission: Impossible 7’ is scheduled for a theatrical release on 27th May 2022 provided that the production does not encounter any further pandemic-induced setbacks.
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