Virginia Lawyers Weekly VA Lawyers Weekly
Although hospitals lost revenue during the COVID-19 crisis because the Virginia governor banned certain elective and/or non-emergent procedures at their facilities, the “Interruption by Communicable Disease,” or ICD, endorsement provision provided no coverage. The ICD endorsement requires that the government order declare a part of the insured premises “uninhabitable” and “prohibit” access to those locations, which never happened.
Background
Danville Regional Medical Center LLC, and Clinch Valley Medical Center Inc. are parties to an insurance policy contract with American Guarantee and Liability Insurance Company that includes an ICD endorsement provision. At the outset of the COVID-19 pandemic, Virginia’s then-governor issued several executive orders intended to curb the spread of the contagious disease.
As a result of one particular order, plaintiffs contend they lost revenue because they were not permitted to perform certain elective and/or non-emergent procedures at their facilities. They accordingly made a claim under the ICD provision for their losses. The matter is before the court on plaintiffs’ motion for summary judgment.
Analysis
By its plain terms, the ICD endorsement requires that the government order declare a part of the insured premises “uninhabitable” and “prohibit” access to those locations. The Virginia order did no such thing. Rather, it required that any procedure that could be safely postponed be postponed to conserve personal protective equipment and ensure adequate space to respond to medical emergencies during a global pandemic. No fair reading of the Virginia order or the policy provision at issue supports any other conclusion. The court thus joins the chorus of courts that have found that governmental shutdown orders — like the Virginia order — do not implicate the ICD endorsement.
The only reasonable interpretation of the words used are that, for the ICD endorsement to be implicated, portions of the hospitals at issue had to be deemed “uninhabitable” and that access to those locations had to be “prohibited.” The Virginia order had no such effect, so ICD coverage was not triggered. While the court understands and is sympathetic to the financial strains placed on hospitals by the COVID-19 pandemic, that sympathy cannot extend so far as to distort the plain language of the policy.
Plaintiffs’ motion for partial summary judgment denied.
Danville Regional Medical Center LLC v. American Guarantee and Liability Insurance Company, Case No. 4:21-cv-00012, Nov. 14, 2022. WDVA at Danville (Cullen). VLW 022-3-511. 8 pp.
