In the lawsuit, UTA alleges that its losses should have been covered by its “business interruption” policies with Vigilant and Federal Insurance Co., two Chubb affiliates.
Chubb has taken the blanket position since early in the pandemic that business interruption policies do not cover COVID losses. Such policies cover losses related to “direct physical loss or damage” to property.
Chubb CEO Evan Greenberg explained the insurer’s position in a July 29 earnings call, saying business interruption policies are intended to cover damage due to events like a fire or a flood.
“Plaintiff attorneys are attempting to torture or reverse engineer insurance contract language to conjure up business interruption coverage that for the most part simply doesn’t exist,” Greenberg said.
Greenberg said state regulators have made it clear that pandemic risk “is not covered and that the industry could not cover the massive open-ended tail risk of a global pandemic because it threatens the industry’s solvency.”
In the suit, UTA argues that the virus “was present on and in the vicinity of UTA’s premises.” At least 13 employees have tested positive, as well as five spouses and some of their dependents, according to the suit.
Vigilant denied UTA’s claim on Sept. 14, invoking the carrier’s blanket position that the virus does not constitute physical loss or damage.