Another COVID-19 BI Claim Gains Traction in Court: This Time It’s a Health Care Provider in Minnesota

The court has yet to decide if Essentia Health's BI claim has any merit, but the suit is gaining traction.
By: | March 6, 2021

COVID-19 lawsuits continue to roll in, this time from Essentia Health against its insurer ACE American Insurance.

In its suit, the health care provider alleged it was wrongfully denied business interruption coverage after citing $59.54 million in losses across 15 insured care facilities last April. Essentia, based in Duluth, Minn., credits an executive order issued by state governor Tim Walz as a direct cause of its losses.

The order postponed all nonessential or elective surgeries. Additionally, the order suspended regular physical examinations by doctors.

Also part of its argument, Essentia claims ACE American is on the hook for business interruption because COVID-19 should be considered a “pollution condition.” Under the “Premises Pollution Liability Portfolio Insurance Policy,” issued by ACE American in April 2018, Essentia argued it had full coverage through April 2021, the end of the policy period.

To further back this point, Essentia cited older cases in which ACE American conceded in court that viruses, such as SARS or even influenza, would merit coverage because they were “pollution contaminants.”

ACE American refutes both allegations and has so far declined to comment on the case publicly.

But Essentia isn’t stopping. It’s demanding that its case be seen in front of a jury trial. Its final price tag: $5 million in damages owed to the health care provider by ACE American.

Essentia’s leading argument alleges ACE American has “proposed and insisted on” an exclusionary endorsement to its policy that would deny coverage of losses related to communicable, infectious or contagious diseases.

“ACE’s actions in seeking to add this virus exclusion into its renewal policies is a reflection of the lack of clarity and ambiguity in the policy as to whether a virus like the coronavirus constitutes a ‘pollution condition,’ ” the complaint states.

Only time will tell if that argument will stand.

Scorecard: Since this case is still in its infancy, no party has been awarded anything by the court.

Takeaway: More and more businesses are looking to regain lost revenue caused by the pandemic. The arguments are growing stronger with each lawsuit, and more cases are being granted in the plaintiffs’ favor. Insurers best review all options before litigation and trial dates become the next pandemic. &

Autumn Demberger is the content strategist at Risk & Insurance®. She can be reached at [email protected]

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