The University is suing an insurance company over the firm’s resistance to cover millions of dollars that GW lost because of the COVID-19 pandemic.
In a 59-page lawsuit filed in D.C. Superior Court late last month, officials allege Factory Mutual Insurance Company, a Rhode Island-based firm, owes the University for building damages because of an “all risks” insurance policy that the University bought from the company in 2019. The University alleges the company should cover the “physical loss and damage” that its buildings suffered when they were used less frequently during the pandemic, but the firm didn’t consider the damage structural, which would be required to enact the policy.
Officials argue that coronavirus droplets damaged University buildings because of their “lack of use” during the pandemic amid strict citywide pandemic regulations in the District, which cost the University “hundreds of millions” of dollars, according to the lawsuit. Efforts to mitigate COVID-19 transmission – including upgrades to HVAC systems and installations of plexiglas barriers and hand sanitizer stations – incurred “substantial” costs that insurance should cover, the complaint reads.
Officials were met with a $180 million budget gap during Fiscal Year 2021 given the loss of revenue during the pandemic and additional pandemic-related expenses, like COVID-19 testing facilities.
The lawsuit states COVID-19 made GW properties “unusable” and inaccessible, which should count as significant damage to buildings.
“COVID-19 and the COVID-19 virus caused unprecedented physical loss and damage to GWU’s properties at levels far worse than the physical loss and damage caused by many ‘traditional’ natural disasters like hurricanes, floods or tornadoes,” the suit states.
The installation of new HVAC systems was a contentious issue for the Faculty Senate in September, when senators passed a resolution calling for more transparency about the status of system upgrades that were meant to mitigate the spread of COVID-19 within campus buildings. The resolution comes after officials released a statement in June indicating that updates to GW’s HVAC systems were complete – but senators said in the resolution that two senate committees were told otherwise in a confidential presentation with Scott Burnotes, the vice president of safety and facilities.
The lawsuit states the presence of individuals who tested positive for COVID-19 in University buildings meant viral coronavirus droplets were spread throughout campus facilities, which caused “substantial physical loss and damage” to the air and surfaces to the buildings. The lawsuit states the COVID-19 particles adheres and alters the surface of property, which can cause damage and COVID-19 cases.
“Due to the external and unforeseen peril of COVID-19 and the COVID-19 virus, such locations were not able to be used for their intended purposes during such periods, and this constituted physical loss and damage to such locations,” the suit read.
Steven Zenofsky, a spokesperson for Factory Mutual Insurance Company, said the company “values” relationships with customers and called the lawsuit unfortunate.
“It is unfortunate when legal matters arise because we strongly believe our insurance policies are clear on the coverage provided,” he said in an email.
University spokesperson Crystal Nosal did not immediately return a request for comment.
