Vt. Supreme Court Reinstates Huntington Ingalls’ COVID-19 Coverage Action Against Reinsurers

MONTPELIER, Vt. — The Vermont Supreme Court has reinstated a COVID-19 coverage action filed by Huntington Ingalls Industries Inc. and its captive insurer against a group of reinsurers, ruling that shipbuilder adequately alleged that the presence of the virus on its property caused “direct physical loss or damage to property,” as required by the underlying policy.

In a Sept. 23 opinion, a court majority, led by Justice Harold Eaton Jr., explained that Huntington has sufficiently described how the virus alters property, and if the insured can prove such alteration occurred, it may constitute “direct physical damage” even if it is …