Zurich American Seeks To Duck College Virus Coverage Suit

By Daphne Zhang
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Law360 (January 15, 2021, 4:58 PM EST) -- Zurich American Insurance Co. urged a Missouri federal judge to toss a proposed class action from another Midwestern college seeking COVID-19 related coverage from its $100 million policy, arguing that the school failed to allege physical damage and that the policy's contamination exclusion bars coverage.

Zurich said Thursday that Lindenwood Female College in Saint Charles, Missouri, was not able to demonstrate any physical loss or damage to its property from COVID-19 or government closure orders. The policy expressly precludes coverage for "loss of use" or pure financial losses like the ones the university has alleged, the carrier said.

The insurer said that the college failed to show that its claimed millions in economic losses constitute physical damage, a precondition for coverage under the school's $100 million policy. Missouri law requires a policyholder to identify actual physical destruction of property to allege damage or loss, it added.

Courts around the country have held that neither the COVID-19 pandemic nor government shutdown orders to curb it cause property damage and that the school failed to show that it ever lost access to its campus and facilities due to state-mandated closures, Zurich added.

Additionally, the policy's contamination exclusion specifically precludes coverage for "inability to use" property due to the "actual presence of any virus," exactly what Lindenwood had alleged in its complaint, the insurer said.

According to the suit, Lindenwood announced its first confirmed case of COVID-19 last March after a student who tested positive visited the campus. The college said it has suffered significant economic losses from shutting down campus activities and dorms. Lindenwood refunded over $5 million in room and board fees to students, according to its proposed class action.

"Nearly every court to have considered the issue — including Judge [Catherine] Perry of this Court — has concluded that insureds in COVID-19 property-insurance cases have failed to allege 'direct physical loss' or 'direct physical damage' to property," Zurich said Thursday.

The insurer has been hit with a number of proposed class actions from midwestern colleges seeking millions to cover their financial losses amid the pandemic. Last July, Rockhurst University, Maryville University and Benedictine College filed two separate proposed class actions in Missouri and Kansas federal courts.

The schools contended that because their all-risk commercial property policies do not have a virus or pandemic exclusion, Zurich was obligated to cover their losses under their policies worth upward of $300 million.

Last October, Benedictine of Atchison, Kansas, filed a voluntary dismissal, saying it is exiting the entire proposed class action coverage dispute without prejudice. The college's dismissal notice came two weeks after Zurich urged the court to drop the case.

Counsel for the parties could not be immediately reached for comment.

Lindenwood is represented by Patrick J. Stueve, Bradley Wilders, Todd M. McGuire and Christopher Curtis Shank of Stueve Siegel Hanson LLP and Brett A. Emison of Langdon & Emison.

Zurich is represented by Bronwyn F. Pollock, Douglas A. Smith, Evan T. Tager, Archis A. Parasharami and Debra Bogo-Ernst of Mayer Brown LLP and Patrick Florian Hofer and Gabriela Richeimer of Clyde & Co. US LLP.

The case is Lindenwood Female College v. Zurich American Insurance Company, case number 4:20-cv-01503, in the U.S. District Court for the Eastern District of Missouri.

--Editing by Andrew Cohen.

For a reprint of this article, please contact reprints@law360.com.

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Case Information

Case Title

Lindenwood Female College v. Zurich American Insurance Company

Case Number



Missouri Eastern

Nature of Suit



Henry Edward Autrey

Date Filed

October 16, 2020

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