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10 ¦ MARCH 23, 2020 NEWS

¦ From CORONAVIRUS on PAGE 9 larger corporations self-insure
quarantines, closures and other and do not carry business inter-
efforts to mitigate the effects of ruption insurance on certain
the coronavirus (COVID-19), it is What are landlords to do if types of properties. For example,
also recommended that attorneys they discover an outbreak offices are often not covered, but
consider adding language to their manufacturing facilities are.
real estate contracts that will ad- of the coronavirus in their When does the coverage kick
dress a situation where any party building? Do they have an
is under quarantine, prevented obligation to shut down the in? When the government orders
from travelling or meeting or oth- building and decontaminate no assemblies over 250 people
erwise cannot perform.” and the playhouses close? When
the space? Will they the restaurants close? Is it enough
Some have advocated for re- be liable for business that the government “suggests”
mote and online notarization certain limitations?
interruption?

and closings, and others disagree, Landlords may have loss of
fearing fraud. One suggestion is rental income insurance. Where
that the parties to any transaction the tenant bears the responsibil-
grant powers of attorney to others to step in if they ity of insuring, the landlord may require the tenant
are sick or quarantined. to carry loss of business income coverage. However,
If city and town halls are closed or are short- with Hurricane Katrina many insureds could not re-
staffed because people are working at home or sick, cover because the loss of rental or loss of business
how does one record a deed or other document on income was not covered under the cause-of-loss
the land records in a timely manner? Is this a prob- provisions. The pandemic leaves landlords, tenants
lem, as Connecticut is a “notice” state? and the insurance companies in a state of uncertain-
What is a landlord to do if they discover an out- ty. It is even harder for the landlord or tenant with
break of coronavirus in their building? Do they have such coverage when part of the facility is shutdown,
an obligation to shut down the building and decon- not the tenant’s space, causing the remaining area
taminate the space? Will they be liable for business to be closed, terminating the tenant’s lease. Policies
interruption? Will the tenant be required to pay the generally do not provide coverage for that.
cost of the decontamination? What if they don’t close In the face of this health crisis, do landlords have
the building, decontaminate, and prevent infected an obligation to increase the cleaning of common
persons from reentering? Is notice to the other ten- areas? Tenant spaces? Should landlords be providing
ants sufficient, letting them make their own decisions? information to tenants on best practices? If so, is it
As the coronavirus drives businesses into slow- best to stick to guidance from the Centers for Dis-
down and shutdown, can they make claims on their ease Control and Prevention, the state, and public
business interruption insurance policies to cover health districts?
mortgage payments and rent? Such policies typically So many questions, so few answers. Real estate
cover natural disasters causing direct physical loss lawyers here in Connecticut and across the country
or damage, not pandemics. are in constant contact sharing ideas on how to get
The pandemic points out the wisdom of per- through this pandemic as best we can. It is that sense
haps requiring some or all tenants to carry business of shared purpose and the continuing dialogue that
interruption insurance for this type of risk. Such can help us find a path forward.
coverage is apparently available, contrary to com- ¦

mon belief. An example of the policy endorsement Attorney Dwight Merriam, who practices in
for the coverage is set out in Catholic Medical Center Simsbury, is a fellow of the American College of
v. Fireman’s Fund Insurance, Civil No. 14-cv-180-JL Real Estate Lawyers and member of the Connecti-
(D.N.H. June 1, 2015). Commercial practice is that cut Law Tribune’s editorial board.

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