Baylor College of Medicine wins COVID insurance verdict

On Aug. 31, 2022, a jury in Harris County, Texas, returned a verdict in favor of Baylor College of Medicine against certain underwriters at Lloyd’s of London in the amount of approximately $48.5 million. It is believed to be the first jury trial in the nation on the issue of whether a commercial property insurance policy covers business interruption losses due to COVID-19.

Unlike many other businesses that have sought coverage unsuccessfully, Baylor recognized that its education, clinical and research missions required that it take extraordinary steps to keep its properties open to continue to treat patients afflicted with COVID and other emergent medical conditions, conduct clinical trials on COVID vaccines and on the effectiveness of medications like remdesivir in combatting COVID and teach the next generation of healthcare providers and scientists. Because of that, Baylor was able to prove that the SARS-CoV-2 virus was physically present in its facilities for the entire period of its insurance policy.

“Judges in other cases here and in other jurisdictions previously held that a virus could not cause damage as a matter of law, a precondition in many business interruption policies, including Baylor’s,” said Murray Fogler, who, along with his partner, Robin O’Neil, tried the case for Baylor. Robert Corrigan, Baylor’s senior vice president and general counsel, added that “Baylor was fortunate to have our case before a courageous judge who identified a fact issue that under our system of justice is decided by a jury. The Baylor community is deeply grateful to the jury for listening to the evidence and making an informed decision.”

In rendering its decision, the jury heard from several experts, including Baylor’s world-renowned virologist Dr. Peter Hotez, who opined that the virus settles on surfaces, making the property less functional and valuable. The jury agreed that the virus caused direct physical loss of or damage to Baylor’s property and awarded damages for lost profits, extra expenses and research losses.