Universities’ coverage dispute related to COVID class actions can proceed

A New York trial judge Wednesday refused to dismiss a coverage lawsuit brought by Hofstra University and St. John’s University against reciprocal risk retention group United Educators related to two class actions brought by students over disruptions to their education caused by the COVID-19 pandemic.

New York County Supreme Court Justice Lyle E. Frank said in Hofstra University et al. v. United Educators that a funds exclusion in the universities’ policies did not relieve the insurer of its defense obligations because the students seek damages beyond the tuition and fees reimbursement.

Justice Frank said that in addition to seeking tuition reimbursement, the students suing Hempstead, New York-based Hofstra are also seeking punitive and statutory damages and that the class action against Queens, New York-based St. John’s seeks monetary damages and other relief the court deems “just and proper.”

United Educators failed to persuade the judge that coverage was not warranted because damages would be minor and the policies do not cover the disgorgement of wrongfully acquired monies.

The students who brought the litigation contend the switch to online classes in response to the COVID-19 pandemic disrupted their education. The universities sued United Educators after it denied their requests for coverage and indemnification.

Representatives for the parties did not respond to requests for comment.