The studio sued in August 2021, alleging that the insurer was trying to limit its losses to just $1 million. Paramount alleged that it was owed far more than that, and that the COVID-19 shutdowns should have triggered a cast insurance coverage with a $100 million limit.
The two sides were set to begin mediation of the dispute on Thursday. But on Wednesday, they filed a notice in federal court indicating they had reached a settlement.
“A formal written settlement agreement has been prepared and is being commented on and finalized,” the parties stated. “The parties anticipate executing a final written settlement agreement by August 5, 2022.”
“Mission: Impossible 7” is now set for release on July 14, 2023, two years behind its original schedule. Production began in February 2020, just as the pandemic began to spread around the globe. Ultimately, production had to be halted seven times.
Chubb did pay out $5 million on the cast insurance policy for the first shutdown. But on later shutdowns, the insurer took the position that the cast insurance policy was not triggered, and that liability was limited to just $1 million under the policy’s “civil authority” provision.
Productions obtain cast insurance due to the risk of incurring massive costs if the director or one of the film’s stars becomes ill or dies during production. Paramount took the position that the cast insurance policy should have been triggered, since the shutdowns were intended to keep the principals from getting sick. Chubb argued that the productions were shut down due to government orders, triggering the civil authority provision, which is typically meant to cover events like riots or hurricanes.
In an amended complaint, Paramount also accused Chubb of trying to cut off coverage for “Mission: Impossible 8,” which began filming earlier this year. Last October, Chubb notified the studio that the policy would expire on Dec. 31, 2021, and would not be renewed. The studio argued that Chubb has promised to extend the policy as needed until production was complete. Paramount also claimed that Chubb offered to extend the policy, but only if the premiums were dramatically increased or the coverage was sharply reduced.
“Mission: Impossible 8” is currently scheduled for release on June 28, 2024.