The lawsuit is among the first, if not the first, to test whether film insurers will be forced to accommodate delays caused by COVID-19. The suit contends that the insurer’s refusal could kill off the project.
“Hypnotic” — an action film starring Affleck and directed by Robert Rodriguez — was set to go into production in April, according to the complaint. But the project, which is backed by Solstice Studios and Studio 8, was postponed along with every other project due to the pandemic.
The producers had purchased a cast insurance policy from Chubb National worth $58 million, which would be paid out in the event that Affleck or Rodriguez became ill or died and was thus unavailable during production.
The policy had an expiration date of Oct. 28, 2020 — which would have covered the production under the original schedule. But according to the lawsuit, Chubb has refused to extend that expiration date to account for the delay.
The expiration date is significant because the policy, which was issued last October, did not carry a COVID-19 exclusion, meaning that Chubb would be forced to pay out if Affleck or Rodriguez came down with the disease.
Insurers are now refusing to sell policies that would cover COVID-19 losses, so if the original policy were allowed to expire, the producers would not be able to replace it. The suit contends that without COVID-19 coverage, the producers “likely would not be able to proceed with the production.”
The producers initially planned to start filming in Austin, Tex., over the summer, but the rise of cases forced them to relocate again. CNBC reported last month that the production is now aiming to start in Vancouver in October.
The suit alleges that Chubb is refusing to extend expiration dates across the board, as part of a “pattern and practice of conduct as part of a broad scheme to save itself tens of millions of dollars (or more), in conscious disregard of its insureds’ known rights.”
According to the complaint, the producers’ insurance broker initially asked for a policy that would expire on March 21, 2021 — one year from the start of production. But Chubb’s underwriting specialist suggested that they go with expiration date of October 28, 2020, as a convenience to match other policies that were being issued.
“That way we will have consecutive expiration dates for all lines and can extend as needed,” the specialist wrote, according to the complaint.
The suit alleges that Chubb is now reneging on its promise to “extend as needed” — and is violating established industry customs and practices.
The suit was filed by attorney Kirk Pasich, and states eight causes of action, including fraud and breach of contract.