Denison University, Kenyon College, Ohio Wesleyan University and The College of Wooster filed the 50-page complaint, alleging their primary and excess policies cover exactly the type of direct physical loss of or damage to property sustained by closing their campuses in response to the coronavirus.
Beginning in March, the Ohio schools moved in-person courses online, according to the suit, resulting in business interruption losses that still occur even as classes resumed in-person in the fall 2020 semester. The Ohio schools alleged they operate with costly health and safety protocols.
"These closures and restrictions were due to loss or damage to property caused by the coronavirus and COVID-19, and as a result of the loss of the ability to operate the … institutions safely or without draconian restrictions and modifications to property and procedures," the Ohio schools said.
Across the country, policyholders and insurers are battling it out over whether the presence of the coronavirus and shutdown orders triggered business interruption coverage. A Missouri federal judge, in the first ruling on such a case in August, gave a group of hair salons and restaurants a win, finding that the presence of the coronavirus made properties unusable and triggered a physical loss.
However, Ohio federal judges this past month sided against a real estate management company, a bar and grill and a hotel operator, tossing out their COVID-19 coverage suits because the insurers weren't responsible to pay for the pandemic-related losses without any direct physical loss or damage.
And the Supreme Court of Ohio has been asked to decide whether the coronavirus represents damages that would trigger insurance coverage as the court system deals with "dozens, if not hundreds" of similar cases.
In Wednesday's complaint, the Ohio schools told the court that even when they reopened, they saw a drop in enrollment based on student concerns about COVID-19. Those fears were reasonable despite the schools putting in precautions, according to the suit, because each school has experienced cases of COVID-19 with their students and employees.
The Ohio schools alleged that the presence of the coronavirus made the campuses unsafe for their intended purposes. The policies don't exclude coverage for a virus or communicable disease, according to the suit, alleging the entire $1.2 billion coverage limit is available for the schools' losses.
The schools said the insurers must cover millions in damages for losses extending to food services, housing income, lost tuition and emergency financial aid. In addition, the schools said they lost money with the cancellation of various performances, sporting events, event contracts and summer camps.
A spokesperson for the College of Wooster told Law360 that it "is seeking reasonable reimbursement from our insurer of critical expenses related to the significant business disruptions incurred as a result of the ongoing COVID-19 pandemic."
A spokesperson for Lloyd's said it doesn't comment on pending matters of litigation.
A representative for Kenyon College declined to comment on ongoing litigation.
Counsel and representatives for the other Ohio schools didn't respond to requests for comment. Representatives for the insurers couldn't be identified or didn't respond to requests for comment.
The Ohio schools are represented by Shawn J. Organ and Erik J. Clark of Organ Law LLP and Joseph D. Jean, Alexander D. Hardiman, Janine M. Stanisz, Arthur H. Aizley and Peter M. Gillon of Pillsbury Winthrop Shaw Pittman LLP.
Counsel for the insurers wasn't available.
The case is Denison University et al. v. Certain Underwriters at Lloyd's London subscribing to policy number W2205F200301 et al., case number 2:21-cv-01010, in the U.S. District Court for the Southern District of Ohio.
--Additional reporting by Daphne Zhang, Joyce Hanson and Hailey Konnath. Editing by Alyssa Miller.
Update: This story has been updated to include comments from representatives for the College of Wooster and Lloyd's.
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