After the lower court granted summary judgment to Omni Hotels and Resorts’ claim for coverage due to COVID-19 losses, the Texas Court of Appeals reversed, in part, based upon language in some of the insurers’ policies. TRT Holdngs, Inc. v. Ace Am. Ins. Co., 2025 Tex. App. LEXIS 7407 (Texas Ct. App. Sept. 18, 2025).

Omni’s properties were insured through a $250 million commercial property insurance program. The program had a $25 million primary layer and a $225 million xcess layer. Both layers were co-insured. Chubb issued the lead policy and other insurers issued follow-form policies.

Omni submitted a claim for alleged business-interruption and extra-expenses losses arising from the COVID-19 pandemic, such as cancelled bookings and lost sales. The insurers denied the claim.

Omni sued. Relying on the Chubb lead policy, Omni alleged that it was entitled to coverage under all of the policies at issue because the follow form policies incorporated Chubb’s coverage, and none of the policies contained a virus exclusion. The trial court granted summary judgment to the insurers and dismissed Omni’s complaint.

Omni appealed. Chubb’s Pollution and Contamination Exclusions Endorsement provided,

This insurance does not apply to:

. . .

Loss or damage caused by, resulting from, contributed to, or made worse by actual, alleged or threatened release, discharge, escape or dispersal of Contaminants or Pollutants . . .

Omni raised three argument as to why the trial court erred in granting summary judgment. First, Omni argued that COVID-19 did not arrive at its properties by one of the exclusion’s enumerated mechanisms, namely by COVID-19’s release, discharge, escape or dispersal. Second, Omni argued that the COVID-19 pandemilc was not a “pollution event” and therefore did not trigfer the “pollution exclusion.” Third, Omni argued that regardless of the contamination exclusion, a separate “cancellation of bookings” provision explicitly covered loss or damage due to “viruses.” The court rejected each of these arguments. Therefore, the trial court’s summary judgment as to Chubb was affirmed.

The court then turned to two of the following form policies. Westport’s policy included a “Communicable Disease Additional Coverage Endorsement.” Westport argued that the communicable-disease extension’s requirements were not satisfied and, therefore, it provided no coverage for Omni. But this argument was not relevant to the appeal. Westport moved for summary judgment solely on the ground that Chubb’s contamination exclusion applied. It did ot move on the additional ground that its stand-alone communicable disease coverage was inapplicable. Accordingly, the trial court’s summary judgment as to Omni’s claims against Westport was reversed and remanded.

Unlike the other policies, Omni never stipulated that the London Market Underwriters’ policies adopted Chubb’s contamination exclusion. Omni argued that the London Market Underwriters’ policies had their own contamination exclusion that lacked any reference to viruses and showed no intent to exclude coverage for viruses. The London Market Underwriters argued that their policies adopted Chubb’s contamination exclusion. London Market Underwriters did not move for summary judgment on the contamination exclusion contained within their own policies, but instead moved solely on the Chubb contamination exclusion, which they represented was incorporated into their policies.

By moving for summary judgment solely on the extrinsic endorsement from Chubb’s separate policy, the London Market Underwriters were required to show that their policies clearly incorporated that endorsement. They failed to do so. London Market Underwriters therefore failed to establish entitlement to judgment as a matter of law. Accordingly, the trial court’s summary judgment as to Omni’s clams against the London Market Underwriters was reversed and remanded.