As I write this blog post, many states in the U.S. are in the process of partially reopening their economies while dealing with the coronavirus pandemic. Business owners who have taken a financial hit due to the shutdown need to also be thinking about liability when they reopen.
If you own a business, one of your worst fears right now is finding out that one of your customers, clients, or employees came down with COVID-19 at your workplace. This is true if your business is a brick-and-mortar or if you or your team has any kind of face to face contact with the public.
In addition to caring for the health of the people around you, you may also find yourself subject to a legal claim due to transmission of the virus at your workplace. This could come in one of several forms. For example, an employee could file a workers’ compensation claim. Depending on the legal standard in your state, proving that they contracted the virus through your business may be easier or harder.
You should always make sure you have plenty of insurance to cover these types of claims, but your future premiums are in part based on past claims, so if one or more COVID-19 related workers’ comp claims comes your way, you could find yourself paying higher premiums for years to come, even after the pandemic has come to an end.
Another possibility is a lawsuit by someone who claims to have contracted the virus at your workplace or in some way related to your business. The more people your business comes into contact with, the greater the likelihood of this type of legal claim. A solo business owner who works from home with no support staff probably doesn’t have much to worry about, but if you own a retail store or restaurant, or if you have a sales team that’s going out to visit customers, the potential liability could be substantial.
A class action is an even scarier possibility. In this situation, you might have multiple employees or others who believe they contracted the virus through your business, and they are attempting to consolidate their claims into one giant lawsuit. If this comes to pass, you will need all the legal help you can get.
So what can entrepreneurs do to reduce their liability? There’s no one size fits all answer, but here are some suggestions. First, recognize that the laws vary state by state, as do the COVID-19 health guidelines. The more you can show that you were following all of the federal, state, and local rules and guidelines to the letter, the lower your potential liability. It’s not enough to take all the steps necessary to protect your team and your customers from the virus. You also need to document those steps so if there ever is a legal claim, you will have the evidence on your side.
You also need to pay attention to how the law is evolving in this area. At the moment, there are discussions at the federal and state level regarding giving employers limited immunity from COVID-19 claims. The more you know about these efforts, if and when they are passed and signed into law, the better off you will be. Don’t rely on rumors or quickly scanned news headlines and assume you are protected from liability.
Finally, and most importantly, use some common sense. Model good behavior when it comes to wearing masks, maintaining hygiene standards, and staying physically distant from others whenever possible. Don’t assume that you can let things slide because your competitor across the street isn’t following all of the rules and best practices. You’ll be much happier if your competitor is the one who gets hit with a lawsuit while your business thrives and your team stays healthy and motivated.
If you have questions about navigating your business through uncertain times, don’t hesitate to contact me.