Houston-based Boxer Property Management Corp. is suing a group of insurers, including Illinois Union Insurance Co., alleging they failed to pay out unpaid business interruption claims arising from the pandemic.

Boxer has yet to finalize how much it will ask for in damages, but Vice President and general counsel John Rentz estimates the company will ask for about $20M, before interest and attorney fees.

The lawsuit, filed June 28 in the 215th Judicial District of Harris County, alleges that, despite Boxer possessing business interruption insurance that included coverage for infectious disease, it was denied pandemic-related relief.

Instead, Boxer said in an amended petition, its insurers, including Illinois Union Insurance Co. and parent company Chubb, "asserted hyper-technical, illogical interpretations of the policies to avoid their responsibilities."

After paying more than $1M in premiums, Boxer claims it has not received millions owed in insurance coverage.

"Obviously, we had a lot of business interruption [due to Covid-19], and provided hundreds of examples of employees and tenants who reported having tested positive for Covid from our properties," Rentz told Bisnow. "We provided that information to the insurance companies, and it has so far, in our opinion, failed to adjust the claim or pay for the business interruption losses."

Boxer purchased relatively rare infectious disease coverage pre-pandemic because it owns and operates hotels, Rentz said, in addition to the vast bulk of its holdings, which are office and retail properties. Rentz said the company's broker negotiated coverage from the insurance providers.

In the suit, Boxer alleges the insurance companies changed the policy after coverage was in effect and failed to pay out when Boxer was forced to temporarily shutter resorts and other properties when Covid-19 cases appeared there.

"Among other things, Boxer’s Primary Policy specifically provides coverage for viruses and entitles Boxer to reimbursement for 365 days of business interruption, up to the limits of the Policy," the lawsuit states. "This virus coverage provision does not require physical damage, or an executive order issued by local or state governments.

The suit points to an appearance by Chubb Chairman and CEO Evan G. Greenberg on CNBC's Mad Money with host Jim Cramer on April 16, 2020.

"There, Mr. Greenberg acknowledged that some insureds have special forms that cover this event and stated, '. . . and those claims will be paid. There is no doubt about it. Including Chubb. Where we specifically provided that coverage we will willingly pay.'"

Chubb did not immediately respond to a request for comment.

Boxer alleges in the suit that its insurers "simply do not want to pay any claims" because of Covid-19, and they are "grasping at straws" to deny coverage. Boxer is accusing its insurers of fraud, misrepresentation and a violation of the Texas Insurance Code.

Rentz said the company believes its insurers acted in bad faith, which, if affirmed by the court, would add to the company's possible settlement.