Appeals court says COVID-related ruling for Berkshire unit too soon
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A federal appeals court Monday overturned a lower court’s ruling in favor of Berkshire Hathaway Inc. unit, holding it was too soon to determine whether a health care company was entitled to COVID-19-related coverage.
Kennett Square, Pennsylvania-based Genesis Healthcare Inc. is a majority owner of 400 nursing and assisted living facilities across the country, according to the ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia in National Fire and Marine Insurance Co. v. Genesis Healthcare Inc.
Because of its liability exposure to COVID-19, Genesis acquired an insurance policy from Berkshire unit National for a coverage period spanning Dec. 1, 2019, to Dec. 1, 2020, that required Genesis to pay the first $3 million in defense costs, settlements or judgments for each health care event, up to a $160 million aggregate self-insured retention.
National sued Genesis in U.S. District Court in Philadelphia in 2022, seeking a declaration that claims against Genesis would not be subject to a single SIR of $3 million but to separate SIRs, one for each of Genesis’ facilities.
Almost three years after the pandemic’s onset, Genesis had incurred $1.3 million in losses in the policy period, less than half of the SIR it would have to pay before coverage under the policy was triggered, the ruling said.
Genesis said it expected to incur another $300,000 over the ensuing five months. In addition, the statute of limitations in many states would soon be triggered, barring further claims against Genesis that were subject to the policy.
The district court ruled in National’s favor and was overturned by a three-judge appeals court panel.
The issue of whether COVID-19 constituted multiple health care events under the policy is “not ripe for review,” it said, which means the district court did not have jurisdiction over the controversy and erred in granting summary judgment to National.
Attorneys in the case did not respond to requests for comment.
