Case: 4:20-cv-01503-HEA Doc. #: 1 Filed: 10/16/20 Page: 1 of 25 PageID #: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MISSOURI
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`LINDENWOOD FEMALE COLLEGE
`d/b/a LINDENWOOD UNIVERSITY,
`individually and on behalf of all
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`others similarly situated,
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`Plaintiff,
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`ZURICH AMERICAN INSURANCE
`COMPANY,
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`Defendant.
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`Case No. 20-cv-1503
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`COMPLAINT
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`Class Action
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`DEMAND FOR JURY TRIAL
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`CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
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`Plaintiff Lindenwood Female College d/b/a Lindenwood University (“Plaintiff”),
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`individually and on behalf of all other similarly situated institutions of higher education, for its
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`Class Action Complaint against Defendant Zurich American Insurance Company (“Defendant”),
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`states and alleges as follows:
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`NATURE OF ACTION
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`1.
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`Institutions of higher education have been hit particularly hard by the ongoing
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`COVID-19 pandemic. Since the disease began to spread rapidly across the country in late February
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`and early March 2020, almost every college and university has taken drastic and unprecedented
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`action to protect their students, faculty, staff, and the general public from COVID-19. This was no
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`easy task. Most institutions of higher education are more like small- or medium-sized cities than
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`mere schools. In addition to educating the future of America, they provide housing for hundreds
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`or thousands of students; serve and sell food; operate stores; employ large numbers of teachers,
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`administrators, and other employees; sponsor sports teams; host public events; and perform many
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`other services.
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`2.
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`On March 6, 2020, the University of Washington became the first major university
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`to cancel in-person classes and exams.1 By the middle of March, others across the country had
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`followed suit and more than 1,100 colleges and universities in all 50 state have canceled in-person
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`classes and shifted to online-only instruction.
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`3.
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`Plaintiff is no different. Due directly to the COVID-19 pandemic, in March 2020
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`Plaintiff: closed dorms and sent students home; shuttered all dining halls; closed administrative
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`buildings; canceled spring sports seasons; canceled graduation ceremonies; closed campus entirely
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`to all but a few essential personnel; and took many other precautions. Revenue-producing summer
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`events also were canceled. Residence halls remained closed. Summer classes were held online.
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`And events that would normally take place on campus during the summer – like summer camps –
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`were canceled in their entirety.
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`4.
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`Plaintiff, like many institutions, has reopened its campuses in a limited capacity for
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`the fall semester, which is in progress. But the effects of the COVID-19 pandemic continue to
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`deprive Plaintiff of the full use of its campuses and property. Large gatherings are still prohibited.
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`Visitors are limited. And Plaintiff has taken unprecedented additional action to ensure that campus
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`is safe for students, faculty, and staff who have returned in some part to campus.
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`5.
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`Apart from the nightmarish logistical challenge, and the serious disruption to their
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`core mission of education, the measures colleges and universities have taken as a result of COVID-
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`19 have had a devastating financial impact. After closing of dorms and dining halls, colleges and
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`universities, including Plaintiff, provided room-and-board reimbursements, often totaling in the
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`millions of dollars, and suffered and continue to suffer significant losses in the form of, among
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`other things, lost revenue and added expense associated with COVID-19.
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`1 https://www.ncsl.org/research/education/higher-education-responses-to-coronavirus-covid-19.aspx
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`2
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`6.
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`Common categories of lost revenue suffered by Plaintiff and other similarly situated
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`institutions of higher education include, among other things: (a) lost tuition income; (b) lost
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`fundraising income; (c) lost income from residential population room, board and related fees; (d)
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`lost income from extra or co-curricular activities (e.g., athletic and other contests, student
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`concerts); (e) lost income from college retail outlets (e.g., bookstore, cafeteria, childcare services,
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`parking); and (f) lost income from special events and rental (e.g., conferences, camps, retreats,
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`weddings, reunions, non-student concerts and similar events).
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`7.
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`Common categories of added expense incurred by Plaintiff and other similarly
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`situated institutions of higher education include, among other things: (a) added technology expense
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`associated with rapid shift to virtual learning; (b) added technology expense associated with rapid
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`shift to work-from-home; (c) added public safety expenses in the form of cleaning and sanitizing,
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`implementing physical distancing measures and COVID-19 testing; and (d) added public safety
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`expenses in the form of facilities changes (e.g., installation of signage, plexiglass shields, etc.).
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`8.
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`Fortunately – or so it thought – Plaintiff purchased an all-risk commercial property
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`insurance policy from Defendant to protect it in the event of an event such as COVID-19. The
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`Policy provides $100,000,000 in coverage for a wide variety of losses, including loss of use of
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`property, business interruption, and property damage. Plaintiff’s Policy is a standard form that
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`Defendant identifies as: The Zurich EDGE Global Policy.
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`9.
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`Plaintiff made a claim for coverage under the Policy for insured direct physical loss
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`of or damage caused by a Covered Cause of Loss (defined as “All risks of direct physical loss of
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`or damage from any cause unless excluded.”) to Covered Property, asking for Defendant’s
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`confirmation as to coverage with respect to each and every potentially applicable basis for
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`coverage under all provisions of the Policy.
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`10.
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`11.
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`Defendant denied Plaintiff’s claim for coverage under the Policy.
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`According to Defendant, COVID-19 cannot under any set of facts or circumstances
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`cause physical loss of or damage to property within the meaning of the Policy. Defendant also
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`contends the Policy includes a “Contamination” exclusion that applies and defeats any COVID-19
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`related coverage claim. Defendant’s position on coverage under the Policy is wrong as to Plaintiff
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`and all other similarly situated insureds.
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`12.
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`Defendant’s denial of Plaintiff’s claim for coverage is not unique. Based on other
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`lawsuits and other publicly available information, it appears that Defendant is taking a consistent
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`position with other insureds – including other higher education institutions – across the country.
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`13.
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`Defendant’s conduct is particularly galling in light of the huge amount of premiums
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`insurers like Defendant receive annually. According to information published by the Insurance
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`Information Institute, the U.S. insurance industry collected net premiums of $1.22 trillion in 2018.
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`Premiums recorded by property/casualty insurers accounted for 51% of that amount. Between
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`2014 and 2018, these insurers wrote net premiums each year of between $497 billion to $612.6
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`billion but only incurred losses of between $277.7 billion and $360.9 billion.
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`14.
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`This is a class action for declaratory judgment and breach of contract arising from
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`Defendant’s refusal to pay claims related to COVID-19 as required by the property insurance
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`policies it sold to Plaintiff and other institutions of higher education.
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`PARTIES
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`15.
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`Plaintiff Lindenwood Female College d/b/a Lindenwood University is an entity
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`chartered by the General Assembly of the State of Missouri with its principal place of business in
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`Saint Charles, Missouri.
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`16.
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`Plaintiff is a private liberal arts college. It was founded in 1827 and is the second-
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`oldest institution of higher education west of the Mississippi River. Plaintiff’s main campus is
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`located in Saint Charles, Missouri. It also has a Belleville, Illinois campus location and smaller
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`locations throughout Missouri. Plaintiff now serves over 7,500 students.
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`17.
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`As a result of, and in connection with the COVID-19 pandemic and related
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`governmental restrictions, and due to the presence of COVID-19 on and near Plaintiff’s insured
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`property and surrounding areas, Plaintiff ceased normal operations and effectively closed its
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`campus in mid-March 2020 and has not yet been able to resume normal operations and use of its
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`insured property in the same manner as it had prior to the COVID-19 pandemic .
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`18.
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`Friday, March 6, 2020 was Plaintiff’s last day of normal campus operations in
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`advance of Spring Break. On March 11, 2020, Plaintiff announced that it would switch entirely to
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`virtual classes from March 13 to 29 for all class sessions at all locations. Residential students, who
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`were on Spring Break through March 15, were strongly encouraged not to return to campus if
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`possible. Campus events during this period were cancelled or postponed. Dining facilities were
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`limited to take-out meals only, and hours available to access campus facilities were limited. As
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`the University’s President John Porter explained at the time, “Lindenwood’s number one priority
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`is the health and well-being of our students, the campus community, and the community as a
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`whole. We feel this move is the responsible course of action to limit the spread of this virus.”
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`Plaintiff stated it would re-assess the situation regarding changes or extensions beyond March 30.
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`19.
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`On March 16, 2020, Plaintiff announced its decision that all spring term courses
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`must be completed in a virtual format and that in-person courses would not resume this spring.
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`Plaintiff also announced that students were required to vacate on-campus housing by Sunday,
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`March 22, 2020. Plaintiff conducted a review of all faculty and staff positions and restricted the
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`campus to essential personnel. Consistent with surrounding areas, on March 23, 2020, St. Charles
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`County amended its earlier Emergency Orders and issued a stay-at-home order effective March
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`24, 2020, at 12:01 a.m., which along with other applicable governmental Orders that are of public
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`record, served to further limit and restrict the University’s operations and use of campus buildings
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`and facilities for an extended period of time. Similar Orders impacted the University’s campus in
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`Belleview, Illinois and other smaller locations throughout Missouri.
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`20.
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`On March 25, 2020, Plaintiff announced its first confirmed COVID-19 test of a
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`student who had last been on campus March 16. On April 7, 2020, the University announced that
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`no classes would be offered in a seated format through August 9, 2020.
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`21.
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`COVID-19 was and has been physically present on Plaintiff’s campuses and
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`surrounding areas since at least March 2020. During Plaintiff’s normal campus operations, there
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`are many thousands of students, faculty, employees and other visitors to the University’s insured
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`property. Given the nature of the virus and its community spread (as more fully discussed below),
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`persons infected with COVID-19 have been present on Plaintiff’s campuses and surrounding areas.
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`As noted, Plaintiff announced its first confirmed case of COVID-19 on March 25, of a student who
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`had last been on campus March 16. In addition (as more fully discussed below), studies have shown
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`that COVID-19 spreads through droplets and aerosols. Aerosols in particular are capable of
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`traveling long distances through the air. Due to community spread of the virus, COVID-19 has
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`reached and been physically present on Plaintiff’s campuses after traveling through the air,
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`independent of any individual. Thus, the virus has been present throughout the University’s insured
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`property and surrounding areas – a dangerous condition by any measure. Finally, because COVID-
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`19 spreads widely through the community, it has been present in the air and on surfaces on property
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`surrounding Plaintiff’s property.
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`22.
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`The presence of COVID-19 on property and in the air at property effectively
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`eliminates the utility and habitability of such property sufficient to constitute direct physical loss
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`of or damage to property within the meaning of the Policy. In addition, the imminent risk of the
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`presence of COVID-19 on property and in the air at the property effectively eliminates the utility
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`and habitability of such property sufficient to constitute direct physical loss of or damage to
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`property within the meaning of the Policy.
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`23.
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`As a result, Plaintiff’s insured property was rendered unsuitable for its intended use
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`and was subject to a variety of limitations, restrictions, and prohibitions, including by orders of
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`applicable government entities (“Stay at Home Orders”), which are matters of public record.
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`24.
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`The condition of Plaintiff’s insured property has not returned to its condition pre-
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`occurrence. COVID-19 has caused Plaintiff to suffer substantial losses (in part described above).
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`For example, Plaintiff issued refunds (in excess of $5,000,000) to students related to room and
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`board alone. Plaintiff has lost revenue from the cancelation of substantially all on-campus summer
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`activities. And, although campus is opened in a limited capacity for the current fall semester,
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`Plaintiff has incurred substantial costs to ensure campus is safe for students, faculty, and staff.
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`Among other things, Plaintiff has installed 258 hand sanitizer stations throughout campus;
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`purchased 830 gallons of hand sanitizer for campus use; installed GPS ionizations technology in
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`certain buildings on campus to assure indoor air quality; distributed Spic and Span Disinfecting 3-
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`in-1 cleaner to departments across campus for additional cleaning of high touch spaces; begun
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`disinfecting all campus spaces regularly with CDC-approved cleaning products; and implemented
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`daily professional classroom cleanings. COVID-19 also caused Plaintiff to modify its on-campus
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`residency requirement. This resulted in many students who otherwise would have been required
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`to live in University housing to move off campus – causing Plaintiff to lose additional revenue.
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`25.
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`Plaintiff is a member of the Midwestern Higher Education Compact (“MHEC”).
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`MHEC is comprised of institutions of higher education across the country who formed a group to
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`develop best practices, collaborative efforts, and cost-sharing opportunities. Upon information and
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`belief, all MHEC members have purchased and are covered by the same Zurich EDGE Global
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`Policy as Plaintiff.
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`26.
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`Defendant Zurich American Insurance Company, is an Illinois corporation, with its
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`principal place of business in Schaumburg, Illinois
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`JURISDICTION AND VENUE
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`27.
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`Jurisdiction is proper in this Court pursuant to 28 U.S.C. § 1332(d)(2) because this
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`is a class action in which at least one member of the class is a citizen of a state different from
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`Defendant, the amount in controversy exceeds $5 million exclusive of interest and costs, and the
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`proposed class contains more than 100 members.
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`28.
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`Venue is proper in this Court pursuant to 28 U.S.C. § 1391 because a substantial
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`portion of the events giving rise to Plaintiff’s causes of action occurred in this judicial district and
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`division. The Policy at issue covers Plaintiff’s campus and other property located in the State of
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`Missouri.
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`FACTUAL BACKGROUND
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`29.
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`The novel coronavirus – named “severe acute respiratory syndrome coronavirus 2”
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`or “SARS-CoV2” – has spread widely and rapidly across the United States. The illness related to
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`SARS-CoV-2 is “novel coronavirus disease 2019,” commonly abbreviated to “COVID-19.”
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`Although the virus and related illness are distinct, for purposes of this Complaint, Plaintiff refers
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`to both interchangeably as “COVID-19.”
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`30.
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`Over 2,500 Missourians and over 216,000 Americans have died of COVID-19 and
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`there have been over 150,000 confirmed COVID-19 cases in Missouri and over 7.9 million
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`confirmed cases in the United States as of the date of this filing, according to the Coronavirus
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`Resource Center at Johns Hopkins University.
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`31.
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`Plaintiff’s insured property has been rendered unsuitable for its intended use and
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`has been subject to a variety of limitations, restrictions, and prohibitions, including by government
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`Stay at Home Orders imposed by the State of Missouri; the State of Illinois; Saint Charles County,
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`Missouri; St. Clair County, Illinois; Saint Charles, Missouri; and Belleville, Illinois.
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`32.
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`Plaintiff also imposed limitations, restrictions, and prohibitions due to the
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`dangerous condition caused by the presence of COVID-19 and its on-going and continuous threat
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`to Plaintiff’s insured property.
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`COVID-19
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`33.
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`A growing body of evidence suggests that the virus transmits both through droplets,
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`when someone sneezes and coughs, and aerosols, which are produced by normal breathing.
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`34.
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`Aerosols are particularly concerning because unlike droplets, which stay airborne
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`for only a few seconds, aerosols are water droplets suspended in air and can remain suspended for
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`hours, until gravity ultimately forces them to the nearest surface below.
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`35.
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`Consequently, aerosols can spread widely through air flow and settle on surfaces
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`hundreds of feet away from any infected individual. Thus, someone not even in the vicinity of an
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`infected person can unknowingly touch an infected surface, later touch their face, and become
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`infected.
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`36.
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`As a result, at least 42 states and countless local governments issued substantially
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`similar “stay at home” orders, the purpose of which was to mitigate and slow the spread of COVID-
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`19.
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`37.
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`According to the CDC, everyone is at risk of getting COVID-19. The virus can
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`spread by respiratory droplets when an infected person coughs, sneezes, or talks. A person can
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`become infected from respiratory droplets or potentially by touching a surface or object that has
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`the virus on it and then by touching the mouth, nose, or eyes.2
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`38.
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`According to studies, the virus can live on surfaces for several days if not longer.3
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`The New England Journal of Medicine reported finding that experimentally-produced aerosols
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`containing the virus remained infectious in tissue-culture assays, with only a slight reduction in
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`infectivity during a 3-hour period of observations. “Aerosols from infected persons may therefore
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`pose an inhalation threat even at considerable distances and in enclosed spaces….”4
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`39.
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`The study also found that COVID-19 was detectable for up to four hours on copper,
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`up to 24 hours on cardboard, and up to three days on plastic and stainless steel.5
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`40.
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`All of
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`these materials, and others similarly susceptible
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`to COVID-19
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`contamination, are used by Plaintiff throughout its facilities and operations.
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`41.
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`The study’s results indicate that individuals can become infected with COVID-19
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`through indirect contact with surfaces or objects used by an infected person, whether they were
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`symptomatic or not.
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`https://www.cdc.gov/coronavirus/2019-ncov/downloads/2019-ncov-factsheet.pdf
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`https://www.cdc.gov/coronavirus/2019-ncov/downloads/2019-ncov-factsheet.pdf
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`https://www.nejm.org/doi/full/10.1056/NEJMc2009324
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`https://www.nih.gov/news-events/news-releases/new-coronavirus-stable-hours-surfaces
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`42.
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`A consensus appears to be emerging that COVID-19 can travel through the air via
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`aerosols. For example, aerosol scientist Lidia Morawska of the Queensland University of
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`Technology in Brisbane, Australia told Nature that, “In the minds of scientists working on this,
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`there’s absolutely no doubt that the virus spreads in the air. This is a no-brainer.”6
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`43.
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`An April 2020 study published in the journal Emerging Infectious Diseases found
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`a wide distribution of COVID-19 on surfaces and in the air about 13 feet from patients in two
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`hospital wards in Wuhan, China, leading the authors to conclude that the virus spreads in aerosols
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`in addition to large respiratory droplets. The investigators found evidence of the virus in swabs of
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`floors, computer mice, trash bins, bed handrails, patients’ face masks, health workers’ personal
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`protective equipment, and air vents.7
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`44.
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`The authors also surmised that the high rate of positivity for floor samples in the
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`hospital strongly suggest that droplets fall to the ground and then are spread via footwear
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`contacting the droplets on the ground. For example, every sample tested from the pharmacy floor
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`tested positive for COVID-19 even though no patients were housed there.8
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`45.
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`Another study conducted in Wuhan indicates that staff movement, floor cleaning,
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`and the removal of personal protective equipment could transmit the virus through the re-
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`suspension of virus-contaminated aerosols.9
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`https://www.nature.com/articles/d41586-020-00974-w
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`https://www.cidrap.umn.edu/news-perspective/2020/04/study-finds-evidence-covid-19-air-hospital-
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`https://www.cidrap.umn.edu/news-perspective/2020/04/study-finds-evidence-covid-19-air-hospital-
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`https://www.biorxiv.org/content/10.1101/2020.03.08.982637v1
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`surfaces
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`46.
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`Kimberly Prather, an aerosol chemist at the University of California, San Diego
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`told Science magazine: “I’m relieved to see aerosolization is accepted. This added airborne
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`pathway helps explain why it is spreading so fast.”10
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`47.
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`Aerosol particles are held in the air by physical and chemical forces. The suspended
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`particles remain for hours or more, depending on factors such as heat and humidity. If virus
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`particles can be suspended in air for more than a few seconds, like, for instance, the measles virus
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`can, then anyone passing through could become infected by a pathogenic aerosol cloud. And the
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`virus can travel long distances and land on surfaces, only to be stirred back up into the air later by
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`cleaning or other disturbances.
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`48.
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`In a study published on October 7, 2020, researchers at Australia’s national science
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`agency found that SARS-CoV-2 can survive for up to 28 days on common surfaces like cash,
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`glass, vinyl, and stainless steel.11 The study also determined that the virus survives longer at colder
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`temperatures, a particular concern as winter approaches in the United States.
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`49.
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`Dr. Debbie Eagles, on the Australia study’s lead researchers, said: “Our results
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`show that SARS-CoV-2 can remain infectious on surfaces for long periods of time, reinforcing the
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`need for good practices such as regular handwashing and cleaning surfaces.”12
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`50.
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`The SARS virus that caused a 2003 epidemic is a coronavirus and is similar to
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`COVID-19. As a result, the behavior of SARS during the 2003 epidemic provided evidence about
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`any aerosol risk from COVID-19.
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`51.
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`A 2014 analysis published in the journal Clinical Infectious Diseases investigated
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`a seemingly puzzling outbreak in a Hong Kong apartment complex whose residents had not been
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`10
`https://www.sciencemag.org/news/2020/04/you-may-be-able-spread-coronavirus-just-breathing-new-
`report-finds#
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`12
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`https://virologyj.biomedcentral.com/articles/10.1186/s12985-020-01418-7
`https://www.sciencedaily.com/releases/2020/10/201011220759.htm
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`12
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`in close contact with each other.13 The study found that “airborne spread was the most likely
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`explanation, and the SARS coronavirus could have spread over a distance of 200 meters,” or about
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`600 feet.14
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`52.
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`The implications of airborne spread of COVID-19 are extremely serious. Airborne
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`spread means that the virus can travel long distances from any infected person. It can then infect
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`someone who unknowingly walks through a pathogenic cloud. It can also infect someone by
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`settling on a physical surface, which someone touches and later becomes infected. And regardless
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`of the transmission method, the evidence suggests that COVID-19 can be transmitted by shoes
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`even once it reaches the ground.
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`53.
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`State and local governments implemented the Stay at Home Orders due to the
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`presence of COVID-19 on property and in the air in the area within their respective jurisdictions.
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`54.
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`Stay at Home Orders governing Plaintiff’s campus and property required Plaintiff
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`to undertake additional cleaning and decontamination measures and to follow disease mitigation
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`advice from the CDC and other public health agencies.15 The CDC and other public health agencies
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`recommended and continue to recommend enhanced cleaning and other disease mitigation
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`measures (like social distancing) to combat the pandemic spread of COVID-19.16 Complying with
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`these Orders has caused Plaintiff to incur increased costs to clean and decontaminate its property.
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`Physical distancing measures have also been costly for Plaintiff to implement and have yielded
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`reduced capacities of Plaintiff’s insured property.
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`https://academic.oup.com/cid/article/58/5/683/365793
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`Id.
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`13
`14
`15
`E.g., https://www.cdc.gov/coronavirus/2019-ncov/community/clean-disinfect/index.html;
`https://www2.illinois.gov/ Pages/Executive-Orders/ExecutiveOrder2020-10.aspx
`E.g., https://www.cdc.gov/coronavirus/2019-ncov/community/reopen-guidance.html
`16
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`13
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`Case: 4:20-cv-01503-HEA Doc. #: 1 Filed: 10/16/20 Page: 14 of 25 PageID #: 14
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`The Zurich Policy
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`55.
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`To protect itself against risks like COVID-19, Plaintiff purchased the Policy from
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`Defendant. The Policy was in effect at the time of the COVID-19 outbreak. Plaintiff paid all
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`premiums required by the Policy.
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`56.
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`57.
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`Plaintiff is the Named Insured under the Policy.
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`Defendant is the effective and liable insurer of the Policy and policies meeting the
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`class definition.
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`58.
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`Generally, under property insurance policies like those issued by Defendant to
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`Plaintiff and class members, the insuring agreements provide coverage for all risks of physical loss
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`of or damage to property, unless specifically excluded.
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`59.
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`The Policy is an “all-risk” policy. It covers “direct physical loss of or damage
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`caused by a Covered Caused of Loss to Covered Property.” Ex. A at 16. “Covered Cause of Loss”
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`is defined as “all risks of direct physical loss of or damage from any cause unless excluded.” Id. at
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`64. The Policy provides coverage up to a limit of $100,000,000. Id. at 17.
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`60.
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`One section of the Policy excludes “Contamination, and any cost due to
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`Contamination, including the inability to use or occupy property or any cost of making property
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`safe or suitable for use or occupancy….” Ex. A at 25.
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`61.
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`The Policy defines “Contamination” as “any condition of property due to the actual
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`presence of any foreign substance, impurity, pollutant, hazardous material, poison, toxin, pathogen
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`or pathogenic organism, bacteria, virus, disease causing or illness cause agent, Fungus, mold or
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`mildew.” Ex. A at 66 (emphasis added).
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`62.
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`However, the Policy contains an “Amendatory Endorsement” which explicitly
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`removes the word “virus” from the definition of “Contamination” and also the definition of
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`14
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`Case: 4:20-cv-01503-HEA Doc. #: 1 Filed: 10/16/20 Page: 15 of 25 PageID #: 15
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`“Contaminant.” See Ex. A at 120-22. Specifically, the definition of “Contamination” on pg. 66 of
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`the Policy containing the word “virus” “is deleted” and “replaced by” the following:
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`“Contamination (Contaminated) – Any condition of property due to the actual presence of any
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`Contaminant(s).” Id. at 122.
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`63.
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`The “Amendatory Endorsement”
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`then provides
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`that
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`the definition of
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`“Contaminant” on pg. 66 of the Policy “is deleted” and “replaced with” the following:
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`“Contaminant(s) – Any solid, liquid, gaseous, thermal or other irritant, including but not limited
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`to smoke, vapor, soot, fumes, acids alkalis, chemicals, waste (including material to be recycled,
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`reconditioned or reclaimed), other hazardous substances, Fungus or Spores.” Ex. A at 122. The
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`word “virus” is specifically omitted.
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`64.
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`The “Amendatory Endorsement” removing “virus” from the Contamination
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`exclusion in the Policy states that it applies to the entire Policy. Ex. A at 120 (“THIS
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`ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.”).
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`65.
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`The “Amendatory Endorsement” removing “virus” from the Contamination
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`exclusion in the Policy is titled “Amendatory Endorsement - Louisiana.” Id. at 120. However, the
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`Policy makes clear that the body of the endorsement, not its title, modifies the scope of the
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`Contamination exclusion. The Policy expressly states that all “titles of the various…endorsements
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`are solely for reference and shall not in any way affect the provisions to which they relate.” Id. at
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`62. As a result, the title of the Endorsement does not affect the body of the Endorsement, which
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`must be applied according to its plain terms.
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`66.
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`No other portion of the Policy purports to exclude viruses from coverage under the
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`Policy. Nor does Plaintiff’s Policy contain an exclusion for “pandemics,” “communicable
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`disease,” or anything similar.
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`15
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`Case: 4:20-cv-01503-HEA Doc. #: 1 Filed: 10/16/20 Page: 16 of 25 PageID #: 16
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`67.
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`The decision by Defendant to explicitly remove the word “virus” from the
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`Contamination exclusion evinces a clear intent by Defendant to provide coverage for viruses, like
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`COVID-19, under the Policy, and an admission by Defendant that viruses, like COVID-19, are a
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`non-excluded cause of direct physical loss of or damage to covered property under the Policy.
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`68.
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`This is particularly true because the risk of a virus like COVID-19 was foreseeable
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`to, if not foreseen by, insurance companies like the Defendant. The Insurance Services Office
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`(“ISO”), an organization that provides policy writing services to insurers, has recognized for years
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`that a virus can constitute physical damage to property. Specifically, in 2006, it announced the
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`submission of an exclusion of loss “due to disease-causing agents such as viruses and bacteria.”
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`69.
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`In connection with circulating the virus exclusion, it sent the following statement
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`to state insurance regulators:
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`Disease-causing agents may render a product impure (change its quality or
`substance), or enable the spread of disease by their presence on interior building
`surfaces or the surfaces of personal property. When disease-causing viral or
`bacterial contamination occurs, potential claims involve the cost of replacement of
`property (for example, the milk), cost of decontamination (for example, interior
`building surfaces), and business interruption (time element) losses. Although
`building and personal property could arguably become contaminated (often
`temporarily) by such viruses and bacteria, the nature of the property itself would
`have a bearing on whether there is actual property damage. An allegation of
`property damage may be a point of disagreement in a particular case.
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`70.
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`Despite the availability of a specific exclusion for viruses, Plaintiff’s Policy
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`contains no such exclusion, and, in fact, Defendant chose to expressly remove an exclusion that
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`might apply to viruses from the Policy.
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`71.
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`Because damage due to viruses constitute physical damage and loss under the
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`Policy, and the Stay at Home Orders have caused Plain