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The Non-Expendables: Recent developments in cast insurance

Courts reach two different conclusions in insurance cases involving injuries to Jason Statham and Samuel L. Jackson

For the entertainment industry insured, cast insurance covers loss in the event that a production is delayed or cancelled as the result of the injury or death of a lead actor, among other things. In the pantheon of insurance products, cast insurance may well be the subject of the fewest written judicial opinions. Nonetheless, two recent decisions have addressed issues which should be of interest to entertainment industry policyholders.

The first is an opinion issued last summer in Alta Vista Productions, LLC v. St. Paul Fire & Marine Insurance Company, concerning the film “The Expendables.” During preproduction, Jason Statham’s physician discovered that he had a growth on his vocal chords that required surgery, resulting in a delay in production. A post-surgical exam then suggested Statham might need additional treatment, and Alta Vista put production on a further two-week hiatus to mitigate any losses if it had to halt production in progress. Alta Vista tendered a claim for the initial delay and the hiatus to St. Paul, its insurer, under policies that covered the cast during preproduction and principal photography. St. Paul denied coverage for the hiatus and Alta Vista sued.

More than two years later, Capitol filed an action for professional negligence against Aon, its broker on the USSIC policy. In short, Capitol claimed that Aon should have procured a policy which covered preproduction injury to an “essential element” of the film such as Jackson, but had failed to do so. In the absence of such coverage, Capitol was forced to go ahead with production, rather than abandoning the film and recovering its investment. Aon demurred to the complaint on the grounds that the relevant two-year statute of limitations barred Capitol’s claims. Capitol had acknowledged during the USSIC action that it incurred more than $10 million in preproduction costs, and was thus injured by USSIC’s May 2007 refusal to permit Capitol to abandon production. Capitol and Aon had since entered into a tolling agreement regarding the claim, but not until October 2009, more than two years after USSIC’s decision. 

The trial court sustained two successive demurrers by Aon, the second without leave to amend. The court of appeal affirmed, emphasizing that Capitol knew of any defect in coverage in May 2007, and that it was injured by any negligence on Aon’s part at that time. Again, since Capitol conceded that it incurred these losses more than two years before entering into the tolling agreement or filing its action, it could not cure the defect in its complaint and the court of appeal upheld the dismissal.

Contributing Author

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Edward Weiman

Edward E. Weiman is a partner in the Los Angeles office of Kelley Drye & Warren LLP. Mr. Weiman represents film and television companies and...

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