Roanoke, Va.-based Carilion Clinic sued the insurance provider in March after it declined to provide coverage and properly investigate Carilion Clinic’s losses that were tied to the pandemic. Carilion Clinic said it lost more than $150 million because of the pandemic.
“To cushion the impact of the coronavirus and COVID-19, Carilion Clinic turned to its property insurer, AGLIC, to whom Carilion Clinic had paid nearly $1 million in premiums in exchange for $1.3 billion in property damage and time element (also known as business interruption) coverage effective June 1, 2019 to June 1, 2020,” the lawsuit stated. “AGLIC, however, declined to fulfill its obligations to Carilion Clinic under the policy.”
Carilion sought damages for breach of contract and a judgment declaring the scope of American Guarantee’s obligation to cover the losses under the policy.
However, in a brief filed in federal court May 24, the insurance company argued that the case should be dismissed, as its policy applies to physical damage to property. The lawyers for the insurer said the coronavirus pandemic “harms people — it does not harm property.”
“A virus does not require property to be repaired, rebuilt or replaced,” the motion to dismiss said, according to The Roanoke Times. “A virus can simply be wiped off the surface with disinfectant, so there is no physical damage.”
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