Nevada
COVID-19 insurance coverage lawsuit pending in Nevada Supreme Court could be a game-changer
LAS VEGAS (KTNV) — Some Nevada business owners eagerly await a Nevada Supreme Court ruling about COVID-19 insurance coverage. The decision could set precedent on whether insurance companies need to reimburse businesses for pandemic-related losses.
The owner of Las Vegas Strip open air mall Grand Bazaar Shops, JGB Retail, sued its insurance company, Starr Surplus Lines Insurance Company, in 2020. The case is now in the hands of Nevada’s high court justices.
JGB claimed the virus caused property loss, but the insurer argued airborne viruses didn’t physically alter the shops.
UNLV law professor Jeffrey Stempel said the case could come down to policy language. According to Stempel, insurers started using “virus exclusion” clauses more often in policies after SARS outbreaks in 2003. But this specific clause wasn’t in JGB’s policy with Starr.
“In this case, I think the argument of no physical loss or damage is very weak on the part of the insurers, particularly since they didn’t define the term in the policy,” said Stempel. “Since the drafting history of the virus exclusion suggests that without a draft virus exclusion, there would be coverage for this type of event.”
JGB’s policy did, however, have a pollution and contamination exclusion clause — which Starr’s attorney, Dan Polsenberg, said includes viruses.
“It excludes smoke, fumes, viruses and hazardous materials,” said Polsenberg. “So actually, the insured lose two ways. Number one, it’s not covered in the first place, because it’s not property damage. Number two, it’s excluded because it’s a virus.”
Stempel believes the pollution and contamination exclusion also excluding infectious diseases like COVID could be a stretch.
“If you look at the drafting history of the pollution exclusion, it’s pretty clear that what the insurers didn’t want to cover was smokestack pollution, groundwater pollution, stuff being dumped into the river, escaping fumes that spread throughout the neighborhood,” said Stempel. “And so when they add virus to pollution, they must have been concerned about virus in, say, contaminated water or smog or discharged from a plant.”
John Ellison is an attorney and the president of United Policyholders, a nonprofit in support of policyholders.
United Policyholders filed an amicus brief in support of JGB Retail. Ellison said JGB should be compensated based on the fact that the virus caused business interruption.
“The presence of COVID caused them to lose their ability to conduct their business the way they had before the pandemic started,” said Ellison. “Now, the insurance companies say that’s not physical loss or damage because the CVOID doesn’t change the structure of the building or it doesn’t cause the roof to fall down. Our view is that that’s not required. That might be physical damage, but physical loss is something else.”
According to the University of Pennsylvania’s COVID coverage litigation tracker, there have been thousands of similar lawsuits nationwide. Many are currently pending decisions. But most ruled so far have sided with insurance companies.
“The insurers that won on the no physical loss or damage argument also had virus exclusions,” said Stempel.
Stempel believes even if a judge rules in favor of JGB in this particular case, because the policy didn’t explicitly have “virus exclusion,” some cases will continue to favor insurance companies.
“For the insurers that did put a virus exclusion in their policy, they’re still likely to keep winning even if JGB wins this case,” Stempel said.
The Nevada Supreme Court heard oral arguments from both sides on Monday. It’s unclear when the high court will hand down a ruling.
The American Property Casualty Insurance Association filed an amicus brief in support of Starr Surplus Lines.
In a statement to Channel 13, assistant Vice President Ken Stoller said the following:
“Judicial decisions or legislative enactments to mandate retroactive business interruption coverage to include COVID-19 losses not in contracts would undermine the stability of the insurance industry and its ability to pay claims on all existing insurance policies. Business interruption insurance is part of property insurance policies that cover actual physical loss of or damage to covered property. Actual physical loss is the total destruction of covered property by fire or tornado or the loss of covered property due to theft, for example. Damage to covered property is the partial alteration of the structural integrity of covered property by fire or tornado, for example. These policies are not intended to cover diseases or pandemic related losses. In the vast majority of cases, insurers did not price policies to include such coverage, and policyholders did not pay for it.
Pandemic-related claims have now been rejected by every federal circuit court except the D.C. Circuit, whose only pending case has now settled; by state high courts in Connecticut, the District of Columbia, Iowa, Louisiana, Maryland, Massachusetts, New Hampshire, Ohio, Oklahoma, South Carolina, Washington, and Wisconsin; by intermediate appellate courts in several other states (some of whose supreme courts have declined to review those decisions); and by the overwhelming majority of state and federal trial courts. The few outlier decisions have been on non-dispositive procedural grounds and driven by very lenient pleading standards, or have adopted coverage theories that have been repeatedly and soundly rejected elsewhere.”
The semi-celebrities and quacks (not that they’re mutually exclusive) get a lot of attention, but one recent appointment announced by Donald Trump is cause for even more concern, and especially for historically anti-government states like Nevada.
Trump on Friday named Russ Vought his director of the Office of Management and Budget.
Of all the Project 2025 authors, none is more eager to create chaos within and dismantle much of the federal bureaucracy than Vought
“We want the bureaucrats to be traumatically affected,” Vought has declared. “When they wake up in the morning, we want them to not want to go to work because they are increasingly viewed as the villains.”
Minimizing the the federal workforce and traumatizing what’s left of it is Vought’s raison d’etre.
That might sound all “ooh, cool, that’ll teach ’em” — until the federal government can’t competently distribute grandma’s monthly Social Security benefit or process your federal income tax refund.
In Nevada, there are many dedicated state and local government employees who work hard to deliver a vast array of programs and services – from nutrition programs for low-income families to processing tax abatements for multi-billion-dollar corporations.
As in every state, those myriad programs and services and initiatives are contingent on federal money, or federal cooperation, or clarity and timeliness of federal rules and regulations.
And while there are many dedicated Nevadans working to provide and/or administer government programs and services the best they can, there are very rarely enough of them. Nevada can be very generous to big business. But when it comes to financing government, Nevada has always been a notoriously cheap state – bottom of the good lists, top of the bad lists, etc.
Vought’s – and Trump’s – crusade against federal civil servants promises to wreak havoc on the delivery of programs and services in every state, red and blue alike.
All states will struggle to compensate for the carnage Vought vows to inflict on the United States civil service.
The states that will have the best fighting chance of safeguarding continued and competent delivery of vital services will be those with something approaching adequately funded and staffed state and local government. Nevada has never been one of those.
***
A pleasant (if short-lived) surprise. But back to the aforementioned quacks and semi-celebrities… it’s as if Trump has been deliberately debasing his own supporters, nominating obviously outlandish and offensive people to jobs they have no business being anywhere near, for the depraved satisfaction of watching his followers – both those who are elected and those within the electorate – obsequiously go along with whatever he says or does.
Initially it looked as if Republican senators were prepared to surrender unconditionally, and grovel in submission while Trump insults their intelligence and rubs their noses in it.
So their willingness to tell Trump to shove his nomination of Matt Gaetz you know where, is a fine thing.
So that’s on the bright side.
On the not so bright side… Yes, though it’s a low bar – subterranean, even – Pam Bondi, the person Trump has named to be AG instead of Gaetz, is far more competent than Gaetz. But she’s also no less loyal to Dear Leader, meaning she could be even worse for the nation and the rule of law than Gaetz. And not surprisingly – her being an extreme Trump loyalist and all – she has documented dalliances with corruption (shielding the Trump University grift) and rejecting reality (election denier).
Stay strong, Republican senators,
Portions of this column were originally published in recent editions of the Daily Current newsletter, which is free and which you can subscribe to here.
A majority of Nevada voters rejected Question 3 on the Nov. 5 ballot. This complex amendment would have eliminated party primaries, advanced five candidates to general elections and introduced a new voting method in general elections
I moved to Nevada in 2021 to care for my aging mother. Before that time, I lived in Maine, where I led efforts that opened Maine’s primaries to all voters and protected the nation’s first statewide ranked-choice voting law.
My values and experience inform me that initiatives to change how we elect our leaders should make their way to voters as the result of home-grown and grassroots movements that are thoughtful, collaborative, strategic and patient.
I am dumbfounded that out-of-state donors and advocates would come into Nevada, steamroll stakeholders and potential allies, rush a constitutional amendment to ballot and spend millions to score a quick win for their preferred policy prescription to our political ills.
As a recent Review-Journal editorial noted, the national coalition behind Question 3 pushed similar initiatives in other states in 2024. Voters rejected each of these proposals.
Here are a few of my takeaways from these failed efforts:
■ Mission and strategy must align. Election reform is inherently hopeful and optimistic. Ramming through policy changes and seeking to buy elections are anti-democratic and deeply cynical approaches to politics. Coalitions with antithetical missions and strategies will almost always fail to achieve the real and lasting change that they seek.
■ Patience is practical. Process matters. How change is made can be as important as what change is made, especially when it comes to process reforms. Elections and voting reform initiatives must be organized by local leaders who will build coalitions and recruit volunteers to secure majority support for their cause, one voter and one conversation at a time. The proper role of national groups is not to lead or dictate, but to support.
■ There is no single solution to fix our broken politics. There are 50 states and more than 50 ways of conducting elections and voting in the United States. While policymakers and advocates should learn from one another, we should be skeptical of anyone or any group that promises a silver bullet or pushes a one-size-fits-all solution.
Voters aren’t stupid. We have a sense when politicians and special interests are trying to put one over on us. Question 3 didn’t pass the straight-face test.
That’s too bad because my experience with ranked-choice voting in Maine has taught me that it works to eliminate vote-splitting and ensure majority winners. You have the freedom to vote for the candidate you like best without worrying that your vote will be “wasted” or that you will help to elect the candidate you like least. In both Maine and Alaska, ranked-choice voting has stopped extreme candidates from winning congressional races.
Ranked-choice voting also increases voter turnout, reduces negative campaigning and encourages more women and minorities to run for office.
Surveys from the states and cities in which millions of Americans rank their vote indicate that voters find it to be simple and easy to use and preferable.
One of the most disappointing false attacks on ranked-choice voting is that communities of color might find it difficult to rank candidates. To suggest that white voters are intellectually superior to voters of color is a racist argument.
Nevadans are frustrated with politics as usual. We know that our system isn’t working like it should. We know that billionaires and corporations have too much power and influence over decisions that affect us all. We want to strengthen our democracy for future generations.
Had the national advocates behind Question 3 approached this effort differently, I believe that there might have been a different outcome.
Kyle Bailey moved to Nevada in 2021 and previously served in the Maine House of Representatives.
The Nevada state high school football championships are here. Here’s how you can watch any of the championship games online on NFHS network.
Watch: Nevada High School football championships
The NIAA state football championships will air from Nov. 23 to Nov. 26 in Las Vegas, Nevada.
How can I watch Nevada high school football? Fans can subscribe to NFHS Sports Network, a nationwide streaming platform for more than 9,000 high school sports. You can find the list of available schools here.
How much does an NFHS subscription cost? Is there a free trial to NFHS Network? An annual subscription costs $79.99, or you can pay monthly for $11.99 per month.
Can you watch NFHS on your phone or TV? NFHS Network is available on smart TVs like Apple TV, Roku, Amazon Fire and Google Chromecast, as well as on iOS and Android smartphones.
Nov. 23:
10 a.m. PT: 2024 NIAA 2A Football Championship Incline Vs. Pershing County
1:30 p.m. PT: 2024 NIAA 5A Div. II Football Championship Faith Lutheran Vs. Bishop Manogue
Nov. 25:
Noon PT: 2024 NIAA 5A Div. III Football Championship Galena Vs. Centennial
Nov. 26:
9 a.m. PT: 2024 NIAA 1A Football Championship Pahranagat Valley Vs. Tonopah
12:20 p.m. PT: 2024 NIAA 3A Football Championship Truckee Vs. SLAM Nevada
3:40 p.m. PT: 2024 NIAA 4A Football Championship Canyon Springs Vs. Mojave
7 p.m. PT: 2024 NIAA 5A Div. I Football Championship Arbor View Vs. Bishop Gorman
Thank you for relying on us to provide the journalism you can trust.
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