Kenyon College joined Denison University, Ohio Wesleyan University and the College of Wooster in filing a federal lawsuit against Lloyd’s of London, an insurance market located in London, according to legal news service Law360. Lloyd’s evaluates insurance risks to determine whether or not to provide coverage to clients. The suit alleges that Lloyd’s must cover approximately $1.2 billion in losses that Kenyon and the other colleges incurred collectively as a result of the pandemic and related local, governmental-enforced shutdown orders.
Their complaint alleges that Lloyd’s must cover the losses in food services, housing income, student tuition and financial aid, as well as the cancellation of sports, summer camps and contracts for events.
According to the complaint, the Ohio colleges and universities further allege that their “all-risk” commercial property insurance policies do not exclude losses related to a virus or contagious disease. Rather, the colleges affirm that their insurance policies include coverage for “communicable disease,” as well as for “costs to test, monitor, contain” and disinfect insured property.
The complaint also states that the policies include coverage relating to business interruption “if the interruption is caused by order of an authorized governmental agency” in order to regulate diseases, or caused by guidance given by the Center for Disease Control (CDC).
This lawsuit joins others nationally, as policyholders and insurers debate whether or not COVID-19 and the subsequent lockdown are grounds for business interruption coverage. According to Law360, a Missouri federal judge ruled in August 2020 that a group of hair salons and restaurants could continue with their class action lawsuit against Cincinnati Insurance Co., alleging that their insurer wrongfully refused to cover their losses during the shutdown. The Missouri business owners agreed to “all-risk” insurance policies, which do not exclude virus-related losses. This ruling became the first known instance of a policyholder’s pandemic coverage suit being upheld.
However, in Ohio, a federal judge ruled differently last month. According to Law360, she dismissed a suit from a real estate management company against Westfield Insurance Co. The plaintiff, Equity Planning Corp., filed the suit in April, claiming that it suffered loss of its properties when tenants stopped paying rent soon after the initial shutdown in March. The judge held that Westfield’s policy does not include pandemic-related losses and does not cover any losses incurred by government shutdown orders, freeing the Medina County-based insurance company from paying for their insured’s alleged losses.
President Sean Decatur and Vice President for Finance Todd Burson declined to comment on ongoing litigation.