December 7, 2022

Volume XII, Number 341


December 07, 2022

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Texas Jury Finds Presence of SARS-CoV-2 Virus Causes “Physical Loss or Damage” to Property, Awards Over $48 Million to Baylor College of Medicine

A Texas jury has found that the presence of SARS-CoV-2 virus on the property of Baylor College of Medicine (BCM) caused “physical loss or damage” and resulting economic loss, triggering coverage under BCM’s commercial property insurance program. The jury awarded BCM over $48 million following a three-day trial; the award consisted of $42.8 million in business interruption, $3.3 million in extra expense, and $2.3 million in damage to research projects.

The verdict came after the court denied the insurers’ pre-trial motion for summary judgment, rejecting the insurers’ contention that a virus cannot—as a matter of law—cause physical loss or damage to property. In denying the motion, the court held that whether the presence of the virus causes physical loss or damage presents a question of fact for the jury to resolve; a copy of the order rejecting the insurers’ summary judgment argument can be found here.  

Indeed, whether a virus causes loss or damage to property is inherently factual and necessarily requires expert testimony to understand the specific impact that SARS-CoV-2, the virus that causes COVID-19, has on tangible property. For example, it has been reported that the insurers’ expert in the BCM case admitted during trial that the SARS-CoV-2 virus physically attaches to the surface of property at a molecular level through a process known as adsorption. This concession upends the common refrain advanced by insurers, and erroneously accepted by many courts, that it is a matter of “common sense” that SARS-CoV-2 virus does not physically affect property. 

Additional information about the trial, jury verdict and any appeal will be posted here as it becomes available.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume XII, Number 250

About this Author

Michael S. Levine Insurance Lawyer Hunton Andrews Kurth

Mike has more than 20 years of experience litigating insurance disputes and advising clients on insurance coverage matters.

Mike Levine is a partner in the firm’s Washington, DC office and a member of the firm’s Insurance Recovery team. Mike’s policyholder representation focuses on:

  • Property damage and business interruption claims, including COVID-19 losses
  • Event cancellation insurance counseling
  • Representations and warranties coverage
  • ...
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Kevin V. Small Insurance Attorney Hunton Andrews Kurth New York, NY

Kevin counsels clients on the recovery of insurance proceeds and on risk management and insurance strategy.

Kevin represents clients in complex coverage disputes involving claims under various types of policies, including first-party property, cyber, D&O, E&O, general liability, product liability, and transactional liability.

Prior to law school, Kevin worked for the world’s leading risk management and insurance broking firm. In this role, he advised Fortune 500 clients on structuring sophisticated risk management programs, brokered the insurance components of such...