Legal Liability Concerns with Reopening Businesses Post-COVID-19

Business owner Asian woman wear protective face mask ppe hanging open sign at her restaurant / café, open again after lock down due to outbreak of coronavirus covid-19

By: Adriana Tonelli, VP Claims & Contracts Specialist

As businesses around the country begin reopening their doors, the implications of opening those doors are being considered. As it currently stands, a business can follow all guidance from the CDC, OSHA, WHO, state and county authorities, and still face potential liability. That has created fear and uncertainty among not only ABD insureds, but businesses all over the country. For most, just the prospect of such litigation, regardless of the likelihood of success, may be a deterrent to reopening sooner than later.

The U.S. Chamber of Commerce identified some of those regulatory and legal liability issues companies may be faced with in a memo sent to members in April. The memo listed a number of issues they felt ripe for litigation once businesses reopen. Identified were employment issues around failure to protect the health privacy of employees, discrimination (specifically if employers conduct a medically-based or risk-based reopening which may lead to discrimination against older employees or those with illnesses or disabilities), and failure to maintain a safe workplace. They also discussed third-party liability issues such as premises and product liability, as well as securities litigation. The expectation is that customer and third-party claims will be negligence-based. For example, premises liability may include claims for failure to have adequate protective measures for customers, employees, or vendors including failing to adequately reconfigure and restructure the premises consistent with guidelines or for failure to disinfect and filter air adequately.   

Since April, some concerns have come to fruition with over 2,600 coronavirus related complaints being filed nationwide according to Hunton Andrews Kurth COVID-19 Complaint Tracker. Eight complaints have been filed in California alleging exposure to COVID-19 in a public place and an additional three alleging wrongful death. California also boasts the most complaints (24) brought by employees against their employers for employment related issues (most involve unlawful termination or failure to provide safe employment conditions). While these numbers don’t appear to be staggering, we are still in the early days of reopening nationwide, so it seems likely these claims will multiply. Many predict COVID-19 related litigation will undermine the safe and orderly return to work for millions of Americans.

To date, five states (NC, OK, UT, WY, and LA) have now passed laws that grant businesses immunity from civil liability for claims related to COVID-19 and more than half have passed some form of immunity for health care providers.

On May 27th, a coalition of 200 trade groups and the U.S. Chamber of Commerce sent a letter to Congress addressing the legal liability issues facing businesses and pushing for “temporary and targeted liability relief legislation related to the COVID-19 pandemic.”  The goal, as stated, is to “safeguard businesses, non-profit organizations, and educational institutions, as well as healthcare providers and facilities from unfair lawsuits so that they can continue to contribute to a safe and effective recovery from this pandemic.” 

Although the coalition hoped to have a decision on their proposal by early July, most government insiders think this is unlikely.

In the meantime, we suggest best practice is to understand the exposures and mitigate the potential risk to the greatest possible extent. Mitigation should begin with a plan for people (i.e. employees, customers, vendors, etc.), facilities and processes. The standard to which a business will be held in a third-party negligence claim will be that of the “reasonably prudent business.”  Being able to document and enforce a plan will go a long way towards demonstrating a business was acting reasonably. We invite you to view ABD’s COVID-19 portal for Return to Workplace Considerations for Employee Reentry.    

In the event your business is presented with a COVID-19-related complaint, we suggest contacting ABD immediately so we can notify your liability carrier(s).

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