Northwell Health Inc., New York State's largest healthcare provider and private employer, filed suit seeking coverage for coronavirus-related losses under a health care premises pollution liability policy. The case is Northwell Health Inc. v. Illinois Union Insurance Co., case number unavailable.
The suit, filed on July 24th, alleges that Illinois Union Insurance Co.'s (Illinois Union) denial of coverage for the losses it suffered arising from the coronavirus pandemic has forced Northwell Health Inc. (Northwell) to fight a war on two fronts. First, against the worst public health crisis the world has seen in generations, and second, to obtain insurance coverage to which it is clearly entitled.
Northwell is a hospital system that operates 23 hospitals and 800 outpatient facilities in New York. Northwell claims that because it is the state's largest healthcare provider, it was at the forefront of the fight against COVID-19, and was called upon to treat more patients for COVID-19 than any other hospital system, but that it still lost revenue due to the suspension of elective procedures during the outbreak.
The suit alleges that the policy purchased by Northwell from Illinois Union, a health care premises pollution liability policy "straightforwardly provides coverage for 'remediation costs', 'emergency response costs', and 'decontamination costs' associated with 'facility-borne illness events' and 'pollution conditions', as well as business interruption caused by 'covered pollution conditions'." The policy has a $20 million limit.
The claim was promptly filed with the insurer in March, but Northwell did not hear from Illinois Union until May, when Northwell received a notification that the claim was denied. The denial was based on Illinois Union's stance that the pandemic did not meet the policy definition of either a covered pollution condition or a facility-borne illness because COVID is transferred by human contact. Northwell argues that the policy only excludes a virus if it is not solely the result of communicability of human-to-human contact, and it has been established that the coronavirus can live on surfaces. The suit also claims that a pollution condition under the policy includes viruses.
Northwell claims breach of contract and a covenant of good faith, and seeks a declaration that Chubb has to cover its costs in responding to the pandemic. Northwell is also seeking damages of more than $500,000 for the breach of contract.
Northwell said it has successfully treated more than 50,000 COVID-19 patients throughout the pandemic response of the last few months.
Editor's Note: The health network's claim that it is being forced to fight a war on two fronts is significant. Most of the claims that we've seen filed have come from the service industry so it is easy to forget that other industries have been negatively affected by the coronavirus. Hospitals and health providers, dentists, and other health entities that perform elective surgeries and nonemergency services all suffered losses during the coronavirus crisis when most elective surgeries were halted, and patients did not seek out care for nonemergency health issues in order to prevent an increased risk to exposure.