Insurance company pushes to toss Lindenwood COVID-19 coverage lawsuit


Photo by Kat Owens

A stone gate to one of the entrances on Lindenwood’s St. Charles campus.

Alexis Montgomery, Editor-in-Chief

Zurich American Insurance Company is urging a federal judge in Missouri to toss the class action lawsuit Lindenwood filed in October to cover COVD-19 losses. 

Zurich filed a motion to dismiss the case, claiming that Lindenwood has not provided evidence of physical loss or damage to property due to COVID-19. The policy precludes coverage for “loss of use” or pure financial losses. The lawsuit was filed in the United States District Court Eastern District of Missouri on Jan. 14. 

According to Missouri law, commercial property coverage requires a policyholder to identify a physical or material loss or destruction of property to allege damage or loss.

“Nearly every court to have considered the issue — including Judge [Catherine] Perry of this Court — has concluded that insureds in COVID-19 property-insurance cases have failed to allege ‘direct physical loss’ or ‘direct physical damage’ to property,” the suit read.

Another reason for the dismissal request was due to the insurance policy having a contamination exclusion that precludes all coverage. 

“COVID-19 is plainly a virus,” and therefore, the Contamination exclusion “expressly excludes damage . . . and even loss of use of property caused by [the COVID-19] virus,” the suit read.

The suit states that Lindenwood requested “civil or military authority” coverage but was turned down due to the virus not causing a physical loss or damage to property or prohibiting access to campus.  

The lawsuit also stated that courts across the nation have already dismissed more than 100 similar cases.

Lindenwood sued Zurich for coverage of losses during the COVID-19 pandemic, including an excess of $5,000,000 to students related to room and board refunds. 

The all-risk commercial policy provides $100,000,000 in coverage for losses, including loss of use of property, business interruption, and property damage, according to the lawsuit filed in October. 

Lindenwood claimed it lost revenue with tuition income, fundraising income, room and board fees, co-curricular activities, college retail outlets, and from special events and rentals.

Zurich has also been involved in proposed class actions from other midwestern colleges such as Rockhurst University, Maryville University and Benedictine College, to cover financial losses amid the pandemic.

Requests for comment from attorneys for Lindenwood were left through email.