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Law360 (July 9, 2021, 6:46 PM EDT ) The Radiological Society of North America isn't entitled to coverage of losses it incurred when it canceled its annual conference in response to the coronavirus pandemic, an Illinois federal judge found, pointing to a communicable disease exclusion in its policy.
U.S. District Judge Robert W. Gettleman on Thursday said the exclusion in the Radiological Society's $30 million policy with certain underwriters at Lloyd's of London was clear in precluding coverage for communicable diseases like COVID-19. The Radiological Society's conference, held yearly in Chicago, is one of the world's largest on topics in radiology, including best practices and techniques, per the decision.
The Radiological Society had the option of purchasing coverage for communicable diseases as part of its event cancellation policy, according to the decision, but decided not to. The group instead opted for a policy that contained an explicit virus exclusion, the decision said.
"The obvious intent is that losses caused by a communicable disease that had been declared a pandemic are excluded from coverage," Judge Gettleman said of the policy.
Mark E. Christensen, a representative for the insurers from Christensen Hsu Sipes LLP, told Law360 that he was pleased with the court's decision to dismiss the suit.
"The communicable disease exclusion is clear and unambiguous in excluding coverage for the cancellation of these events at issue under the policy," Christensen said.
In March, the Radiological Society accused underwriters at Lloyd's of failing to honor the terms of the event policy, saying a fair and impartial reading of the policy resulted in nothing less than "outright confusion." Claiming that there was an exception to the exclusion in addition to the exclusion itself, the Radiological Society said the policy as written was jumbled when it came to determining coverage for communicable diseases.
Judge Gettleman, however, rejected those contentions, saying the policy didn't contain any exceptions to the exclusion. He acknowledged that the exclusion was poorly written, containing bad grammar, but said that it was ultimately meant to apply only if the communicable disease in question had been declared a pandemic.
The Radiological Society's annual conference had been scheduled last year to take place between November and December, according to court documents. The organization expected attendance to exceed 50,000 people, with over 700 exhibitors and 440,000 square feet of event space at the McCormick Place convention center.
In May last year, as government pandemic restrictions were put in place, event organizers canceled the conference, fearing that the restrictions would make the event illegal or cause attendance to plummet, according to the Radiological Society.
Counsel for the Radiological Society didn't immediately respond to a request for comment.
The underwriters are represented by Mark E. Christensen, Hera L. Kim and Mark A. Hooper of Christensen Hsu Sipes LLP.
The Radiological Society is represented by Brian W. Ledebuhr of Vedder Price PC.
The case is Radiological Society of North America Inc. v. Those Certain Underwriters at Lloyd's of London et al., case number 1:21-cv-01265, in the U.S. District Court for the Northern District of Illinois.
--Editing by Leah Bennett.
For a reprint of this article, please contact reprints@law360.com.
