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Lloyd’s to Pay $12 Million of Baylor’s $48.5 Million Covid Loss (1)

Sept. 2, 2022, 4:52 PM

Baylor College of Medicine won a Texas state court jury verdict that one of its insurers, units of Lloyd’s of London, must pay $12 million to cover pandemic-related losses, or roughly a quarter of the $48.5 million damage incurred.

The Aug. 31 verdict in the District Court of Harris County in Texas is the first jury verdict ruling in favor of policyholders in the Covid-19 insurance litigation, according to a Baylor attorney, Murray Fogler of Fogler, Brar, O’Neil & Gray LLP.

Courts nationwide have generally sided with insurers on the issue of whether they owe business interruption coverage to their corporate policyholders. But the verdict in Texas would provide some hope to businesses that are seeking coverage, Fogler said.

“It is believed to be the first jury trial in the nation on the issue of whether a commercial property insurance policy covers business interruption losses due to COVID-19,” according to a statement Friday from Baylor.

Lloyd’s attorneys didn’t immediately respond to a request for comment.

The Houston-based school said in its lawsuit against its insurers that it suffered more than $69 million in Covid business interruption damages. It has $100 million all-risk policies with three insurers: XL Insurance America, a unit of AXA; ACE American Insurance Co., a unit of Chubb; and Lloyd’s.

The judgment would apply to all three insurers, but only Lloyd’s is on the hook for now, Fogler said.

Last year, a Texas state court granted summary judgment in favor XL and ACE, finding that the insurers owe no coverage because their policies excluded coverage of virus-related losses. Baylor has appealed the ruling.

The Wednesday jury verdict said that Lloyd’s must pay its 25% coverage share of Baylor’s Covid losses because its pollution exclusion didn’t contain the word “virus,” Fogler said.

XL and ACE could also be on the hook for their shares if the appeal of the summary judgment is reversed, Fogler said.

XL and ACE’s attorneys didn’t immediately reply to requests for comment.

Most Covid business interruption lawsuits never survive insurers’ motions to dismiss, Fogler said.

“I’d hope that some of the courts would permit these [Covid insurance] claims to go to a jury in their jurisdictions,” Fogler said. “It gives some hope to policyholders that it’s possible to win one of these claims. There are still many of them out there. “

The medical school has alleged that droplets of its Covid-19-positive staff and students physically damaged its facilities. The school said it incurred additional losses through pandemic lockdown orders that forced it to pause non-emergency patient visits, invest in sanitation and protective measures, and set up a telehealth medical program.

Baylor has said the damages and losses it incurred from the coronavirus and lockdown orders are covered under its $100 million all-risk property policies. Baylor paid over $1.2 million for the insurance coverage, which is shared by XL, ACE and Llloyd’s, according to filings.

To contact the reporter on this story: Daphne Zhang in New York City at

To contact the editors responsible for this story: Maria Chutchian at; Roger Yu at