A Texas jury has found that the presence of SARS-CoV-2 virus on the property of Baylor College of Medicine (BCM) caused “physical loss or damage” and resulting economic loss, triggering coverage under BCM’s commercial property insurance program. The jury awarded BCM over $48 million following a three-day trial; the award consisted of $42.8 million in business interruption, $3.3 million in extra expense, and $2.3 million in damage to research projects.

The verdict came after the court denied the insurers’ pre-trial motion for summary judgment, rejecting the insurers’ contention that a virus cannot—as a matter of law—cause physical loss or damage to property. In denying the motion, the court held that whether the presence of the virus causes physical loss or damage presents a question of fact for the jury to resolve; a copy of the order rejecting the insurers’ summary judgment argument can be found here.  

Indeed, whether a virus causes loss or damage to property is inherently factual and necessarily requires expert testimony to understand the specific impact that SARS-CoV-2, the virus that causes COVID-19, has on tangible property. For example, it has been reported that the insurers’ expert in the BCM case admitted during trial that the SARS-CoV-2 virus physically attaches to the surface of property at a molecular level through a process known as adsorption. This concession upends the common refrain advanced by insurers, and erroneously accepted by many courts, that it is a matter of “common sense” that SARS-CoV-2 virus does not physically affect property. 

Additional information about the trial, jury verdict and any appeal will be posted here as it becomes available.