In March, restrictions caused by the COVID-19 pandemic had forced the university to cancel in-person classes on campus and move them online.
“The university purchased – at significant expense – a best-in-class ‘all risks’ business interruption insurance policy from Factory Mutual,” GWU said in its lawsuit. “The all risks policy broadly covers ‘all risk of physical loss or damage,’ except as specifically and unambiguously excluded… [and] promises to protect GWU against loss of revenue and certain expenses if it cannot use its classroom buildings, libraries, residence halls, or other insured properties due to the impact of some external peril.”
GWU added that that the COVID-19 “are exactly these types of perils” because it rendered the buildings “unusable.” Additionally, the university said that it incurred substantial costs to lessen COVID-19 transmissions –including the installation of HVAC upgrades and Plexiglas barriers – that should be covered under its policy.
However, it alleged that Factory Mutual denied coverage for lack of “structural damage.”
“Because GWU suffered massive losses covered under the all risks policy, and because Factory Mutual refuses to honor its promise, GWU asks this court to issue declaratory relief and to award money damages for Factory Mutual’s breach of its contracted commitments,” the university said in its lawsuit.
This isn’t the first COVID-19 business interruption case a university has brought against Factory Mutual. In July 2020, two universities in Missouri – Rockhurst University in Kansas City and Maryville University in Saint Loui – filed a class action lawsuit against the insurer, arguing that the insurance company denied their business interruption claims for losses sustained during the COVID-19 pandemic.