A jury has issued a $48.5 million verdict in favor of Baylor College of Medicine in COVID-19 business interruption coverage it filed against Lloyd’s underwriters, in the first such verdict on the issue.

Wednesday’s verdict, which followed a three-day trial and was not officially released as of Friday afternoon, had three components — a $42.8 million award for business interruption, $3.3 million for extra expenses and $2.3 million for research losses — according to Baylor attorney Murray Fogler of Fogler, Brar, O’Neil & Gray LLP in Houston. 

Mr. Fogler said the verdict is expected to be appealed. Lloyd’s attorney could not be reached for comment.

The court of appeals for the 14th District of Texas in Houston had previously granted summary judgment to Axa XL unit XL Insurance American Inc. and Chubb Ltd. unit ACE American Insurance Co. in the case filed by the Houston-based medical school, but refused to dismiss Lloyd’s from the case, Mr. Fogler said. He said he would appeal those rulings. Their policies amounted to about 75% of the coverage, he said.

He said the reason for the appeals court’s ruling were different exclusions in the policies.

Mr. Fogler said the jury verdict “demonstrates that a policyholder with the right facts can indeed prove that the virus damages its property,” and is an indication that “more courts ought to permit juries to decide the question.”

Policyholder attorney Scott D. Greenspan, senior counsel with Pillsbury Winthrop Shaw Pittman LLP in New York, who is not involved in the case, said in a statement, “The jury’s verdict confirms what we have always known – COVID-19, like other toxic substances, causes physical loss or damage to property. The insurers’ attempt to minimize the profound impacts of COVID-19 to property is contrary to good science and reason.

“This is why insurers have fought so hard to keep these cases from getting anywhere near a jury. This jury got it right.”

Policyholder attorney Gretchen Hoff Varner, a partner with Covington & Burling LLP in San Francisco, said in a statement the verdict “reflects the common-sense fact that the presence of COVID causes damage to physical property."

She said, “It reflects a real change in the direction of COVID insurance litigation."