College sues insurer over losses from “unusable” buildings
Continue reading: Study: Property insurers cannot cope with business interruption losses caused by a pandemic
In March, restrictions from the COVID-19 pandemic forced the university to cancel classroom events on campus and move them online.
“The university has acquired a first-class” all-risk “business interruption insurance from Factory Mutual – at a considerable cost,” said the GWU in its lawsuit. “The all-risk policy broadly covers ‘all risks of physical loss or damage’ unless it is expressly and clearly excluded … [and] promises to protect the GWU from loss of income and certain expenses if it cannot use its classroom buildings, libraries, dormitories or other insured objects due to exposure to an external hazard. “
The GWU added that the COVID-19 was “exactly this kind of hazard” because it made the buildings “unusable”. Additionally, the university said it had incurred significant costs to reduce the transmission of COVID-19 – including installing HVAC upgrades and Plexiglas barriers – which should be covered by its policy.
However, it was alleged that Factory Mutual refused coverage for lack of “structural damage”.
“Because GWU has suffered massive losses that are covered by the all-risk policy, and because Factory Mutual refuses to keep its promise, GWU is seeking declaratory action and monetary damages for Factory Mutual’s breach of contractual obligations,” said GWU the university in his lawsuit.
This isn’t the first case of COVID-19 business interruption that a university has filed against Factory Mutual. In July 2020, two Missouri universities – Rockhurst University in Kansas City and Maryville University in Saint Loui – filed a class action lawsuit against the insurer.