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A Connecticut children’s medical center had their lawsuit dismissed by a federal judge. The institution sought coverage for property damage associated with COVID-19 against their insurer. The suit was filed on March 5th, 2021, by The Connecticut Children’s Medical Center and a subsidiary. Continental Casualty Co., and its parent company, CNA Financial Corp., were the property insurers and the defendants in the case.
The defendant's motion to dismiss was granted by U.S. District Judge Jeffrey A. Meyer stating the plaintiffs “do not explain how it is plausible to conclude that this amounts to ‘damage’ to the property.” The plaintiff's policy does not exclude or limit coverage for losses caused by viruses, pandemics, or communicable diseases. Also, the policy stated that “reasonable and necessary extra expenses … in order to continue as nearly practicable the normal operation of the insured business” will be covered. Seeking declaratory judgment, the plaintiffs felt that the defendants should provide coverage for business interruption loss, extra expenses, disease contamination expenses, compensatory damages, interest, attorney fees, and punitive damages.
The defendants requested dismissal, claiming the policy does not cover the losses claimed. Connecticut law interprets the terms of an insurance policy “in accordance with its natural and ordinary meaning” If the terms of the policy are clear and unambiguous. If the terms are ambiguous, the policy must be construed in favor of the insured.”