Paramount Settles Suit Against ‘Mission: Impossible’ Insurer Over COVID-19 Production Delays

Death-defying stunts and an endless stream of unforeseen expenses caused by the COVID-19 pandemic is forcing Paramount Pictures and its financial partners to shoulder a massive $290 million budget for Mission: Impossible — Dead Reckoning Part One. It’s tens of millions more than they expected to spend on the Tom Cruise-led project. Paramount will get some of that back in a deal with Federal Insurance Company resolving a suit accusing the Chubb unit of refusing to live up to the terms of its insurance policy.

According to a court document filed on Wednesday, the two sides reached a tentative agreement to settle claims over COVID-19 production delays and costs. Terms of the resolution weren’t disclosed. It’s expected to be finalized by Aug. 5.

Paramount sued Federal in California court last year seeking coverage of a policy that paid out upwards of $100 million for losses resulting from production interruptions. The studio claimed the policy should have been triggered when unnamed cast members contracted COVID-19 and civil authority orders halted filming of the movie.

Under the provision for cast coverage, Federal agreed to pay for “loss” that  Paramount “directly and solely sustain[s] by reason of any covered person(s) in connection with an insured production, being necessarily prevented by their death, injury, sickness or kidnapping … from commencing or continuing or  completing their respective duties in an insured production,” according to the complaint. The policy defined “loss” as any extra cost incurred in “completing  an insured production over and above the expenditure.” It also allegedly insured losses “resulting from a crisis event that … results in the immediate suspension of production.”

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Federal only paid out $5 million. It maintained that only part of Paramount’s claimed losses are covered under the policy, arguing that extra costs arising from the pandemic are only covered under the policy’s $1 million civil authority coverage. It also claimed that the several suspensions and relocations constitute a single loss despite having occurred in different locations.

“Remarkably, Federal stated that there was no evidence that 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,” reads the complaint.

In a motion responding to Paramount’s claims, Federal said that the “policy speaks for itself” and pushed back against Paramount’s characterization of the coverage.

The settlement was reached ahead of a mediation deadline. Trial was scheduled to begin in September.

Disney also sued its insurer, Fireman’s Fund, last year arguing that civil authorities order halting production triggered coverage.

Mission: Impossible — Dead Reckoning Part One experienced several suspensions in filming, moving from Venice, Rome, back to Venice, the U.K., Abu Dhabi, and then back to the U.K. again. It’s slated for a July 2023 release.

Chubb declined to comment. Attorneys representing Paramount and Chubb did not respond to requests for comment.