By Eli Flesch

Law360 (May 19, 2021, 4:36 PM EDT) -- A group of Ohio universities refiled their coronavirus coverage suit against underwriters at Lloyd's of London, joining a group of colleges in Washington state court seeking coverage for the "devastating toll" of the pandemic on college campuses.

Denison University, Kenyon College, Ohio Wesleyan University and The College of Wooster said Monday that physical damage they sustained as a result of the pandemic warranted coverage under their all-risk policies with the underwriters, but provisions for communicable diseases would entitle them to coverage regardless of any damage.

The colleges join a group of 60 other colleges and universities belonging to the EIIA, or Educational & Institutional Insurance Administrators, a risk management and insurance organization for institutions of higher education, originally formed to help historically Black colleges and universities secure coverage for their member campuses.

The three Washington schools heading the effort are Pacific Lutheran University and the University of Puget Sound, located in Tacoma, and Whitworth University in Spokane.

The near-certain presence of the coronavirus at the universities, coupled with government restrictions limiting the use of school property, led to the kind of loss and property damage required for coverage under their policies, the colleges said.

That's in addition to social distancing and other safety and cleaning measures the schools implemented to prevent the transmission of the coronavirus, they said. Staples of college life, such as in-person lectures and open dormitories, were restricted, the schools said.

In a 96-page complaint, the colleges claimed $1.2 billion in covered losses from a decline in revenue from traditional sources, including tuition, sporting events, campus retail stores and food services. They accused the underwriters of abandoning their policyholders while reaping enormous profits and raising premiums for coverage.

The Ohio universities first sued Lloyd's underwriters in March, claiming losses that started with a move to online learning but continue with the resumption of in-person classes. Even when they reopened, the colleges said, they saw a drop in enrollment based on student concerns about contracting COVID-19, the respiratory ailment caused by the coronavirus.

The colleges aren't the only policyholders to take their insurers to court in Washington.

In two consolidated cases, the owner of LA Fitness brought its insurers to Washington state court, claiming $950 million in covered losses after 1,200 of its employees tested positive for COVID-19.

That so many staff members tested positive for the virus was direct proof that the virus caused physical damage, Fitness International LLC said, adding that virus particles were "deposited" on the surface of exercise equipment and transmitted through the air and ventilation system. Given the high percentage of asymptomatic cases, the gym owner said that the actual number of infected employees could be far more than 1,200.

In April, U.S. District Judge Barbara J. Rothstein refused to send questions to the Washington Supreme Court on issues surrounding physical loss and a virus exclusion in a large pandemic coverage fight involving a group of dentist and orthodontic offices.

Judge Rothstein said she had "all the tools necessary" to decide the issues much like other federal courts across the country. Only one Ohio federal court chose to send a question to its state Supreme Court, Judge Rothstein noted. At the time, 10 cases between businesses and insurers were consolidated in the Western District of Washington, according to the insurance company parent group in the case.

In Washington state courts, policyholders have fared better in business interruption suits than they have in federal courts across the nation.

A Washington dental practice escaped an earlier dismissal in its suit against Mutual of Enumclaw Insurance Co., and Perry Street Brewing won a partial summary judgment bid against the same insurer in a different suit, according to the University of Pennsylvania's COVID Coverage Litigation Tracker.

Representatives for the colleges in Monday's suit didn't immediately respond to requests for comment.

A spokesperson for Lloyd's said it doesn't comment on matters of litigation.

The colleges are represented by Christopher S. Marks, Malika Johnson and Alice C. Serko of Tanenbaum Keale LLP, and by Joseph D. Jean, Alexander D. Hardiman, Janine M. Stanisz and Peter M. Gillon of Pillsbury Winthrop Shaw Pittman LLP.

Counsel information for the underwriters was not immediately available.

The case is Pacific Lutheran University et al. v. Certain Underwriters at Lloyd's London et al., case number 21-2-05894-1, in the Washington Superior Court, Pierce County.

--Additional reporting by Shawn Rice and Daphne Zhang. Editing by Neil Cohen.

Correction: A previous version of this story misstated the amount of losses the owner of LA Fitness is seeking in Washington state court. The error has been corrected. 

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