This article was posted on Thursday, Apr 01, 2021

“Pandemic”…  When we hear that word, our minds reference historic outbreaks such as smallpox, the bubonic plague, and various strains of influenza.  Epidemics have shaped history and impacted companies, even in modern times.  The current Coronavirus – also known as SARS Coronavirus 2 or COVID-19, has society shutting down businesses, shelter-in-place orders and it has us talking about washing hands, social distancing, and flattening the curve. 

This terminology focuses on the pandemic instead of supporting businesses, from landlords to non-profits across the state and country, which means that companies have been forced to file bankruptcies, closing their doors to operate and/or are forced to significantly reduce operations, disrupting supply chains, and significantly limiting business travel. Record numbers of trade shows and conferences are cancelled, and employee terminations are in question under current and upcoming conditions.

States like California all prevent landlords, including commercial landlords, from evicting tenants during this pandemic which has resulted in loss of rents. Schools have closed and many are not going to open until the Fall, restaurants are resorting to pick-up orders, hotel chains have record numbers of vacancies, and gatherings over a certain number have halted for the unforeseeable future.  

Apartment owners are now losing rents and face increased chances of lawsuits due to this pandemic.  This situation has and will more than likely lead to an additional loss of rental income and landlords, apartment owners and property managers wondering about their insurance coverage and if there is coverage during this pandemic.  It is imperative to understand all of your exposures, what you are and are not covered for and what the best next steps are to come out of this pandemic stronger than ever with your most valuable assets protected and intact.

Bottom line… Standard commercial insurance policies offer coverage and protection against a wide range of risks and threats and are vetted and approved by state regulators.  Landlords are not covered for all that they think they are on their current insurance policies.  For instance, business interruption (Loss of Rents Coverage) does not and was not designed to provide coverage against communicable diseases such as COVID-19.  Of course, every policy differs in its nuances, but generally infectious diseases and pandemics are excluded from most, if not all, standard insurance policies for apartment owners.  This being said, there is a lot of litigation and active talk right now between congress, insurance regulators and the insurance companies about what can be done to help during these unprecedented times.  This is one of the main reasons it has never been more important to have an insurance adviser who understands all your coverages, is staying informed with the hour-to-hour changes from the government, and, most importantly, is willing and committed to fight for you and your family’s prized possessions.  

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So, let’s get into this a little deeper. What landlord (Apartment Owners and Property Managers) policies are most likely to be affected by Covid-19 and how will they respond?

Business Interruption (Loss of Rents)

Is there a policy available for landlords’ loss of rents coverage?  The short answer is yes!  If your current insurance provider is not a specialist, it’s likely he or she is telling you this coverage does not exist.  That is incorrect. This coverage does exist and is available but not where you may think.   

Business Interruption (Loss of Rental Income) on standard insurance policies covers loss of income due to a loss such as a fire on the premises or for contingent business income, a supplier or a hurricane.  Business Interruption is a common coverage on an apartment owner’s policy or t commercial property policy but may exclude pandemics, namely, infectious diseases.  

Why are standard insurance policies not covering loss of rent coverage for landlords during this pandemic?  Most standard policies have been designed and priced to require some type of direct physical loss or damage to either your premises or building for this coverage to be triggered.  Without this trigger, most if not all insurers’ stance at the time of the claim will likely be that a virus/infectious disease in your facility did not create a physical loss or damage.   On top of this, viruses and diseases are typically specifically excluded on all standard business owners’ policies.

Rent Protect Policies for Apartment Owners and Landlords

With most states now preventing landlords from evicting tenants, this is already resulting in loss of rents from tenants not being able or deciding not to pay their normal monthly rents.  As discussed, it is unlikely this is covered under your standard business owner’s policy or apartment policy.  The good news is there are policies out there that do afford coverage for loss of rents, and the way the policy form reads is silent as it relates to pandemics and can be included.  Call us to learn more about this coverage and to have our team provide you with further details about this valuable coverage.  GSI specializes in landlords and apartment owners and will advise all policies that will be best suited for your exposures and insurance needs.

Commercial General Liability Insurance

We are getting calls from our landlords informing us that their tenants have died due to the coronavirus and asking if they should be concerned about being sued from other tenants if other tenants contracted the disease.  This is possible and we always advise our clients to speak with their attorneys about this but yes, this risk is there.  There is likely to be an increase in liability lawsuits due to COVID-19.  The most important thing is that you, the apartment owners/landlord, have coverage if you are sued.    

Apartment owners, property managers and landlords face the risk of failing to protect others from exposure from infection on their premises.  Many standard general liability policies for businesses contain bodily injury clauses that include diseases, but those are in place to protect your business in case of the accidental spreading of pathogens or if someone gets injured on your premises.  These policies typically include limitations about pollution, but – again – the definition “pollutant” is vague and would need to be determined by a court.  The good news here is that insurance companies have a duty to defend and should meet that obligation even if there is just a possibility of coverage on the underlying policy.  There may be an uptick in these types of claims in months to come with so many tenants getting sick so do not wait to make sure you are properly covered.  Having the right advisor has never been more important to stay ahead of this and make sure you have the best outcome in case a claim like this does occur.  Errors and Omissions coverage may also be triggered for real estate owners and/or property managers as their tenants face financial losses resulting from mismanagement of their response to this pandemic.  So be proactive and consult with an expert if you are not sure what to do.

The definition of “pollutant” can be unclear, so it’s best to consider outbreaks excluded from insurance policies in this situation.  Some would argue that an environment is unsafe for work due to a contagion, in essence, “damaging” the property by deeming it dangerous.  Policy language differs from carrier to carrier on how it will respond to infectious diseases.  This is one of the reasons why a pollution policy should be recommended for some business owners because they are much broader in language and can extend coverage where a typical commercial general liability policy will not, since it’s not designed to offer pollution coverage.  Do you have information overload yet?  Another reason why having a consultant who is specialized in your industry is essential.

Tenant Discrimination and/or Employment Practices Liability

With unemployment now more than 22 million, we expect that there will likely be a rise in employment-related claims due to workers’ compensation coverage not being sufficient and/or terminations from this pandemic.  With governors in some states encouraging employers to check the temperatures of their employees and telling them to ask their employees if they have the coronavirus, this may lead to some potential questions around employment laws.  Though this may be encouraged by some state regulators, it is very possible we see additional claims, including this, in terminated employees’ complaints.  Here is a helpful resource for employers to protect their workers from COVID-19.  We also anticipate tenant discrimination claims are likely to increase due to the increase in evictions.  This coverage is usually a separate coverage and is not typically included with your standard apartment policy.  Making sure you are covered here is extremely important and very commonly overlooked.  

Workers’ Compensation

The outbreak has already resulted in workers’ compensation claims being reported.  We are expecting this number to rise in the coming days and months.  Each claim is different and will depend on the individual circumstances and where the infection occurred.  In the case of employees, if a worker can directly prove that he was put into harm’s way by an employer and therefore contracted a disease, he may be covered under workers’ compensation policies but it will vary from state to state.  Some state laws limit how a policy can apply coverage to employees outside of the US and for employees that have excessive travel.  Time will tell how other states will respond but ultimately workers’ compensation insurance covers your employees who suffer injury or illness that has been contracted in the workplace or on the job.  This also extends to injuries arising out of or in the course of employment.

Here are some additional links that are helpful for business owners regarding the coronavirus (COVID-19):

EDD – California – Coronavirus

IRS – Coronavirus Tax Relief

US Small Business Administration – Disaster Assistance

California – Business Coronavirus Relief

CDC – Coronavirus Disease – Protect Yourself

US Government Response to Coronavirus

What Should Businesses Do in Times of a Disease Outbreak?

  • Take action!  Apartment owners and landlords should start considering next steps to protect their employees.  Comply with OSHA’s rules and regulations.
  • Develop New Policies around sick leave and paid time off which should include:
  1. Sick pay and sick days
  2. Employees health plans
  3. Build confidence when communicating your policies so employees are not afraid
  • Create a Business Continuity Plan
      1. Include supply chain
      2. Disrupted operations
      3. Identify functions that can be replaced or transferred
      4. Appoint key staff
  • Keep the Workplace Safe
      1. Follow the CDC guidelines
      2. Reduce risk of transmission
      3. Communicate to your staff, your tenants and/or clients the proactive steps you are taking that are within your control
        1. Link for recommendations on cleaning and disinfection
  • Use Technology and Over-Communicate
      1. Companies like Zoom, RingCentral and Whereby offer alternative technology solutions to make continuing business easy
      2. Create and develop a remote policy where you can
  • Talk to an Insurance Agent who specializes in the real estate space, is well informed and is being proactive during this unprecedented time of COVID-19 to avoid any surprises while passively renewing your insurance policies.

Lastly, insurance rates are likely to continue to increase.  Speak with our team today about some of the exclusive programs we have available for apartment owners, landlords and property managers.  


If you have additional questions about commercial insurance coverage and COVID-19, contact GS Insurance Solutions, Inc. 800-827-4262 or visit

GSI is a full-service insurance and risk management brokerage that specializes in the Apartment and Property Management Industry.  GS Insurance Solutions, Inc. is the Apartment Owners Association of California’s (AOA’s) exclusive endorsed insurance broker.