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Monday, April 22, 2024 | Back issues
Courthouse News Service Courthouse News Service

$20 Million Claim in Movie Insurance Snafu

LOS ANGELES (CN) - Capitol Films says it was forced into the losing proposition of recasting a role assigned to Samuel L. Jackson after Jackson dropped out, because its insurance broker picked a policy that didn't cover pre-production.

Capitol says it hired entertainment insurance giant Aon/Albert G. Ruben Insurance Services to find coverage for the movie "Black Water Transit." Capitol says it specifically requested coverage of potential injuries or illness of key cast members, or "essential elements" of the movie.

Aon chose U.S. Specialty Insurance Co., which issued Capitol's policy on Dec. 11, 2006, according to the Superior Court complaint. By that time, Capitol says it had cast Jackson as the star.

Six months later, just before Capitol planned to start filming, Jackson suffered a back injury that required surgery, according to the complaint.

Capitol says it wanted to abandon the movie and recover the money it had spent, but U.S. Specialty told it that was not an option.

Aon had chosen a policy that did not cover the pre-production phase, though Capitol claims that such coverage is standard.

In November 2007, U.S. Specialty sued Capitol, seeking a declaratory judgment relieving it of covering Jackson's injury.

In depositions, Capitol says senior Aon employees testified that "in 15 years of experience" they "had never seen" a policy issued that did not cover pre-production. They allegedly testified that they "disagreed with the selection of [U.S. Specialty]; that Aon did not request a sample essential element endorsement from [U.S. Specialty[, never reviewed the standard [U.S. Specialty] essential element endorsement form, never saw the essential element endorsement form for Mr. Jackson, and, at the time Aon was deciding between [U.S. Specialty] and another carrier, never compared [U.S. Specialty's] form to any other carrier's form."

Capitol says it lost $20 million because it was unable to recover the money it spent on preproduction, and incurred more expenses from pushing back production dates to recast Jackson's role.

Capitol is represented by Lucia Coyoca with Mitchell Silberberg & Knupp.

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