In what appears to be a first, a Texas jury awarded Baylor College of Medicine a $48.5 million award for losses incurred during the COVID pandemic that its property insurance should have covered.
The verdict comes as all types of businesses continue to fight with their insurers to cover losses incurred from COVID-related disruptions in 2020.
The jury awarded $42.85 million for lost net profits, $3.36 million for extra expenses, and $2.30 million in research project expenses, according to reports.
Baylor College of Medicine remained open during the pandemic treating patients and continuing research. However, the school alleged it incurred losses in buying personal protective equipment, disinfecting facilities, and covering other expenses such as building a telehealth program.
“I do think that Baylor was somewhat uniquely situated because we could establish the presence of the virus on the property throughout the period of coverage,” Plaintiff’s attorney Robin O’Neil told Claims Journal.
With little success, companies have filed thousands of claims related to the pandemic under property insurance policies that provide coverage for business interruption.
Several state supreme courts including in Massachusetts and Iowa, ruled that COVID cannot cause a direct physical loss or damage.
A litigation tracker maintained by the University of Pennsylvania shows there have been no trial court decisions in favor of policyholders and only two trial court decisions in favor of the insurer.
Image: Baylor Medicine at McNair Campus, 7200 Cambridge Street, Houston, Texas. Credit: Japan Encyclopedia / Wikimedia Commons (CC-BY-SA-4.0)
Chivaroli and Associates Insurance Services is a full-service brokerage firm specializing in the custom-design and placement of insurance and alternative risk funding solutions for your healthcare organization.