AECOM sues insurance carrier for payment of COVID-19 property damage claims

AECOM is suing Zurich American Insurance alleging that the carrier’s “all-risk” policies should include claims for losses due to the impact of COVID-19.

The design firm alleges that Zurich refused to pay coronavirus-related claims when such coverage was not specifically excluded in AECOM's “all-risk” property insurance policies. AECOM claims its COVID-19 damages run in the millions of dollars.

According to AECOM’s suit, the insurance industry has a standard virus and bacteria exclusion form, but Zurich did not include it in AECOM policies. Some of the losses AECOM claims Zurich will not cover are for installation of physical barriers to isolate aerosolized droplets produced by those who are infected by the disease.

AECOM also said in the court filing that Zurich knew or should have known that many courts have determined that the presence of a hazardous substance in a property, including within its airspace, is considered property damage. Further, there may be direct physical loss to the property even without any physical damage. The lawsuit also noted that AECOM has offices, operations, and projects around the world where more than 500 AECOM employees have tested positive for COVID-19.