Thor Equities Hammers Insurer Over COVID-19 Rent Coverage

By Mike Curley
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Law360 (May 1, 2020, 4:53 PM EDT) -- Thor Equities LLC, which owns commercial properties in Manhattan, Chicago, San Francisco and other major cities, is suing Factory Mutual Insurance Co., asking a New York federal court to declare the insurer owes Thor coverage for rent payments its renters have skipped because of the COVID-19 pandemic.

In a complaint filed Thursday, Thor told the court that many of its tenants have been forced to shut down as a result of orders from state governors to close nonessential businesses in an effort to slow down the spread of the novel coronavirus, which causes the disease COVID-19.

Among the properties Thor Equities owns are the Albee Square Mall in Brooklyn, the Palmer House Hilton Hotel in Chicago and retail properties in Tribeca, Chelsea and the Upper East Side of Manhattan.

Thor said that numerous companies renting space at its properties have said they will not be able to make rent payments and have asked for abatements and other accommodations. As a result, Thor said it expects to lose at least $20 million in rent payments alone as a result of the pandemic.

After the closure orders went into effect, Thor said it sent a claim to Factory Mutual requesting coverage under the communicable disease, civic authority and other types of loss, which provide up to $750 million in coverage.

Factory Mutual, however, characterized Thor's losses in a formal acknowledgment letter as being only for "communicable disease response" and "interruption by communicable disease," and did not acknowledge the claims for loss under other endorsements in the policy, according to the complaint.

Thor alleged that its sublimit for coverage under communicable disease response and interruption by communicable disease is only $1 million, far short of the losses it will suffer as a result of the COVID-19 shutdowns.

In the complaint, Thor claims that the coverage falls under all the other applicable endorsements, including civic authority and loss of access to the properties, and is not included under an exclusion for contamination.

The property owner is asking the court for a declaration that Factory Mutual must cover all its losses for rent and other business interruption at its properties, saying based on Factory Mutual's acknowledgment letter, Thor expects the insurer to breach its contract.

Representatives for Thor and Factory Mutual could not immediately be reached for comment Friday.

The lawsuit joins a slew of other suits by businesses against their insurers seeking coverage for business interruption under the shutdown, with dozens of such cases plus class actions being filed as the pandemic goes on.

Thor Equities is represented by Robin L. Cohen, Kenneth H. Frenchman and Alexander M. Sugzda of McKool Smith PC.

Counsel information for Factory Mutual was not available.

The case is Thor Equities LLC v. Factory Mutual Insurance Co., case number 1:20-cv-03380, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Jeff Sistrunk. Editing by Jay Jackson Jr.

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Case Information

Case Title

Thor Equities, LLC v. Factory Mutual Insurance Company

Case Number



New York Southern

Nature of Suit



Analisa Torres

Date Filed

April 30, 2020

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