By judgment of 2 September 2022, a Texas jury held that COVID-19 caused direct physical loss or damage to the property of Baylor College of Medicine – a health sciences university – and awarded the institution $48.5 million from the insurer that provided it with commercial property insurance.

Unlike many other policyholders that have sought coverage unsuccessfully, Baylor managed to prove that the COVID-19 virus was physically present in its facilities for the entire period of its insurance policy. In fact, contrary to many other businesses, Baylor College could not completely shut down during the pandemic emergency: as a healthcare provider and research institution, it had to stay open to treat patients and do important research related to vaccines and COVID-19 treatments. On account of the virus’ ability to physically attach to properties, Baylor had to take expensive precautionary measures to reduce the frequency of in-person activities, the jury said. For example, if COVID-19 patients were treated, the examination rooms used for such treatments had to be kept vacant for come hours so that virus particles could settle; then, such room had to be properly cleaned by staff members wearing protective equipment. In other words, in the jury’s view, plaintiff did prove that throughout the coverage period the COVID-19 virus was present at its facilities and made it virtually impossible to operate at pre-pandemic levels.

Reference: Baylor College of Medicine v. XL Insurance America et al., District Court of Harris County, Texas, No. 2020-53316

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