Education

The National Law Review

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NY Appeals Court Affirms Universities Owed Broad Defense Coverage Despite Certain Excluded Losses

Hunton’s insurance coverage team recently secured an important appellate victory for clients St. John’s University and Hofstra University in a coverage dispute arising from United Educators Insurance Company’s (“UE”) categorical refusal to defend or indemnify the universities in student class action lawsuits filed after the universities transitioned to remote instruction during the COVID-19 pandemic. The decision is significant both for colleges and universities facing pandemic-related tuition refund suits, and for policyholders more broadly. It reaffirms a core principle of insurance law: a liability insurer’s defense duties require a defense even where some of the claims or relief sought in the underlying lawsuit may not be covered. Rather, where the allegations create a reasonable possibility of covered loss, the insurer must defend the entire lawsuit. Background: Pandemic-Related Student Lawsuits and the Coverage Dispute During the COVID-19 pandemic, St. John’s University and Hofstra University, like many institutions across the country, closed their campuses and shifted to remote instruction to protect students, faculty, and staff. The Universities were later named as defendants in putative class action lawsuits brought by students who alleged that they had not received the full benefit of the in-person educational experience for which they had paid. The students sought