Jury rules for Baylor in dispute over business-interruption coverage for COVID losses

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Jurors in Texas awarded $12 million to Baylor College of Medicine last week in a dispute over whether its commercial property insurer covered COVID-19 losses.

Lawyers for Baylor said the verdict may be the first for plaintiffs in COVID business-interruption litigation against insurers, reports. Reuters also has coverage.

Judges have mostly tossed lawsuits against insurers because of policy requirements for a “direct physical loss or damage” to property before coverage kicks in. The judge in the Baylor case allowed jurors to decide the physical loss issue.

Jurors found Baylor suffered $48.5 million in losses after the pandemic forced the school to reduce operations at clinics, stop all elective procedures, reduce laboratory research services and cut its teaching programs.

But the defendants, Lloyd’s of London syndicates, provided one fourth of insurance coverage and they were responsible for only one-fourth of the losses, lead Baylor lawyer Murray Fogler told Reuters.

The judge in the case had ruled for two other Baylor insurers last year because their policies excluded coverage for viruses. In the Baylor trial, the school’s expert had testified the virus that causes COVID-19 had settled on surfaces and made the property less valuable.

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