New York Court Upholds Universities’ Coverage Lawsuit Against Insurer
A New York trial judge has declined to dismiss a coverage lawsuit brought by Hofstra University and St. John’s University against the reciprocal risk retention group, United Educators. This lawsuit is related to two class actions initiated by students who experienced educational disruptions due to the COVID-19 pandemic.
The decision, rendered by New York County Supreme Court Justice Lyle E. Frank in the case of Hofstra University et al. v. United Educators, determined that a funds exclusion in the universities’ insurance policies does not exempt the insurer from its duty to defend. This is because the students are seeking damages beyond the mere reimbursement of tuition and fees.
Justice Frank highlighted that, apart from tuition reimbursement, the students suing Hempstead, New York-based Hofstra are also pursuing punitive and statutory damages. Furthermore, the class action against Queens, New York-based St. John’s is seeking monetary damages and any additional relief deemed “just and proper” by the court.
The insurer, United Educators, was unable to convince the court that coverage was unwarranted due to the insignificance of the damages and the policies not covering the disgorgement of wrongfully acquired monies.
The students involved in the litigation argue that the transition to online classes, necessitated by the COVID-19 pandemic, significantly disrupted their education. The universities initiated legal action against United Educators after their requests for coverage and indemnification were denied.
As of now, representatives for the involved parties have not provided any comments on the matter.
