As we’ve covered in many of our previous blogs, the devastating economic effects of the COVID-19 crisis and the congressional delays in approving more pandemic relief have left many landlords and tenants scrambling.1 With federal support having been limited, some have turned to the coverage provided by insurance policies to ease their burden. After all, there are plenty of policies designed around uncontrollable and unprecedented events, and the coronavirus certainly qualifies as such.

Unfortunately, while turning to insurance could provide some much-needed coverage and financial security, this path places several hurdles in front of landlords and tenants, making it difficult to take advantage of. In this next series of blogs, we’ll cover the many insurance policies that are relevant to those seeking pandemic relief, along with the challenges that people have encountered as they try to use them. 

The Impact of COVID-19

Due to the massive business disruptions that followed in the wake of the pandemic, along with congressional delays in approving pandemic relief, we’ve seen a surge of U.S. bankruptcies,2 with landlords and other real estate professionals having been hit especially hard. For those managing apartment complexes, massive unemployment meant that tenants were often unable to pay rent, which coupled with federal order banning evictions meant that landlords had few options.

The owners of retail shopping complexes also faced challenges, as many of their clients were forced to close, either because they were considered “non-essential” businesses3 or because they couldn’t handle the economic pressures of the pandemic. Regardless of the specifics of the situation though, the result remained the same: a major loss of rental income to landlords.4

Insurance to the Rescue?

Since mid-March 2020, businesses across the country have submitted insurance claims for lost revenue, typically under “business income” provisions of their property insurance policies.5 Given that some businesses were unable to qualify for the government-issued Paycheck Protection Program (PPP) loans, there was a greater financial drive for them to find some form of financial assistance. Yet the pandemic has impacted both insurance companies and insureds alike, and landlords have found that provisions like business interruption coverage is not guaranteed, leading to a number of lawsuits.6

Since the initial government shutdowns in March, judges have dismissed more than four times as many business interruption lawsuits as they have allowed to proceed.7 In the case of most SMEs (small and medium-sized enterprises), their insurance policies only have basic coverage for business interruption as a consequence of property damage, meaning that they cannot cite the impacts of the pandemic as a reason for compensation.8 However, even in cases where landlords have policies that cover business interruption losses from other causes (such as notifiable diseases and denial of access as a result of non-damage), insurers are still rejecting the “vast majority” of claims connected to the pandemic.9

Playing Hardball

For the most part, insurers are only covering losses that can be directly attributed to the damage of COVID-19, as opposed to (for example) the indirect impact that the pandemic has had on the rental market.10 Worse yet, insurers have failed to provide clarity regarding coverage, which has resulted in even more lawsuits.11 As for the courts, most rulings regarding the denial of pandemic-era claims under business interruption coverage have favored insurers, though there have been a few cases where landlords have come away with a win.12 This is most common in policies that contain clauses that are specific to viruses.

Even with courts largely being on the side of insurers, the insurance industry is still facing heavy losses, nonetheless. Recent data shows that the industry could see at least $100 billion in total underwriting losses from the pandemic, while executives say Industry executives say that pandemic-related losses may be their biggest ever.13 Considering that insurers have faced heavy scrutiny over the last few years, it is little surprise that some have been hesitant to budge on their stances regarding business interruption insurance.

No Guarantees

Given that the impacts of the pandemic are still being felt throughout the real estate industry (especially after the recent extension on the eviction moratorium), landlords will likely remain desperate for additional financial support. Yet with insurers playing hardball, there will likely be scores of lawsuits on the horizon as the courts work out just what is covered by business interruption insurance.14 In our next blog, we’ll take a closer look at some of the forms of insurance that are being brought up, along with the current legal arguments surrounding them.


1.  Egan, J. (2020, November 30). Is business interruption from covid-19 likely to lead to a spike in court cases? National Real Estate Investor.

2.  Feeley, J., & Chiglinsky, K. (2020, December 9). Insurers Winning Most, But Not All, COVID-19 Business Interruption Lawsuits. Insurance Journal.

3.  Lushis, J. F. (2020, May 12). Rent Guarantee Insurance – A Solution for Landlords? Norris McLaughlin – Attorneys at Law.

4.  Lushis, J. F.

5.  Gorenberg, K. M., &; Godes, S. N. (2020, October 29). Update on Business Interruption Insurance Claims for COVID-19 Losses. The National Law Review.

6.  Lushis, J. F.

7.  Feeley, J., & Chiglinsky, K.

8.  Mines, L., &; Shah, C. (2020, November 18). COVID 19 – Business Interruption Insurance Test Case – Coronavirus (COVID-19) – United States. Mondaq.

9.  Egan, J.

10.  How does business interruption insurance work?: Real estate accounting firms. Smith & Howard. (2018, July 20).

11. Mines, L., &; Shah, C.

12.  Egan, J.

13.  Feeley, J., & Chiglinsky, K.

14.  Gorenberg, K. M., &; Godes, S. N.

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