Insurance company fights back in GW COVID droplet lawsuit

Media Credit: Grace Hromin | Senior Photo Editor

GW sued Factory Mutual Insurance Company late last year in an effort to force the company to pay hundreds of millions of dollars in COVID-related damages.

An insurance company filed a document Monday asking the D.C. Court of Appeals not to consider the question of whether the presence of COVID-19 droplets cause “physical loss and damage” in the next stage of GW’s lawsuit against the company.

GW last week asked the court to require a judge to rule whether the presence of COVID-19 droplets counts as damage for the purposes of an insurance policy that GW purchased in 2019. GW sued Factory Mutual Insurance Company late last year in an effort to force the company to pay hundreds of millions of dollars in COVID-related damages after GW moved online during the spread of COVID, but a judge dismissed the case earlier this year saying COVID droplets did not constitute physical damage under the insurance policy.

GW appealed to the D.C. Court of Appeals last week to ask judges to consider the question of whether COVID droplets constituted damage, but Factory Mutual fought back Monday, saying there was no need to consider the question. Factory Mutual’s attorneys referenced District Court Judge Dabney Friedrich’s September lawsuit dismissal, who ruled in the company’s favor by stating the droplets did not constitute enough damage to be considered “tangible alterations” to GW property for insurance purposes because virus droplets can be cleaned off of surfaces.

“This is not the rare exception requiring guidance from the D.C. Court of Appeals,” the motion states.

Last year, GW’s lawyers said COVID-19 droplets “damaged” buildings, making them unusable and falling under the physical damages insurance policy GW bought from the company. University officials said financial strains caused by the pandemic cost the University “hundreds of millions” of dollars in last year’s lawsuit and separately said the pandemic led to a $180 million budget gap during the 2021 fiscal year.

Factory Mutual defended Friedrich’s September dismissal in the Monday motion, referencing the judge’s ruling that insurance coverage was unavailable to the University because of “unambiguous” texts and precedent. The document states that despite the lack of D.C. precedent specifically addressing COVID-19 in coverage context, “hundreds” of other federal, district and appellate courts have come to the same “common sense” ruling as Friedrich, that COVID droplets don’t cause physical damage.

“That argument falls far short,” the document states. “This Court regularly resolves contract disputes in diversity cases and does not burden state courts with certified questions merely because there is no precedent that is factually directly on point.”

The University’s motion earlier this month states there is undetermined D.C. law on whether COVID droplets present “physical loss and damages,” referencing similar cases being considered in other state courts like Maryland and Vermont, some of whom ruled in the insured’s favor.

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