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Reopening During COVID-19 Restrictions: Preparing Properly to Minimize Business and Premises Liability

May 20, 2020

By: Robert W. Petti and Daniel Alexander

As the process of reopening our economy unfolds across the country, business and property owners are entering uncharted waters in managing the risks associated with liability during the COVID-19 pandemic. Among the many considerations business and property owners must navigate is the potential liability they may face if workers, customers, or other visitors make a claim that they contracted or were exposed to COVID-19 while on the premises.

This potential liability exists on several fronts. As litigation trends continue to develop, several jurisdictions are already beginning to see employees’ workplace-acquired COVID-19 infection claims. Similarly, patrons or other business invitees, such as vendors or contractors, could pursue a variety of tort and statutory claims against the business operator and property owner should they contract COVID-19 from a specific business or location. These claims by patrons and other invitees are commonly known as “premises liability” claims.

Most states have premises liability statutes that create liability for the owners or those in possession of real property.  The duties business and property owners owe to the public under those states’ premises liability statutes differ based on the reason someone is on the property. The most significant duties are owed to “invitees” who often include customers, vendors, and contractors.  Premises liability statutes generally create a duty to make the property reasonably safe for invitees and others who enter it for “business purposes.”  These statutes may also create duties to warn about known hazardous conditions and duties to inspect for hidden dangers. 

Recognizing the litigation risks faced by premises owners for certain acts - including those committed by third parties - several states have taken steps to immunize owners or provide detailed, damage-limiting schemes to ensure that the litigation floodgates remain closed.  For example, the Mississippi Landowners Protection Act (Miss. Code Ann. §11-1-66.1) modified traditional standards to specifically define the level and type of proof necessary to establish a premises liability claim based on the intentional conduct of a third party.  Nearly every state affords its political subdivisions some degree of immunity for policy-based acts involving state-owned property.  Immunity statutes often involve competing constitutional balancing interests, and for that reason, are frequently subject to review or modification. 

With the continuing presence of COVID-19, premises liability claims appear to be likely where business and property owners fail to adequately protect their visitors from COVID-19 exposure, fail to adequately warn about the risks of potential exposure, or fail to take steps to identify those who might have contracted COVID-19 and may pose a risk to other visitors. And, in some cases, these claims will likely be filed even where the business has done everything possible to safely reopen operations, yet the conduct of a third party causes the claimed injury of its patrons.  Possible issues include:

  • Can a business owner refuse to serve patrons without an appropriate face covering? 
  • Will the business owner be responsible for the patron who refuses to observe social distancing requirements?
  • What liability does a business owner have for someone who intentionally attempts to spread the virus at the business? 

The Legislative and Judicial branches are struggling to resolve these unique issues.  But in the meantime, the business community must be prepared to respond, often at its own potential peril.

Although any successful action against a business will require some proof that the alleged injury or illness was caused by a violation of the business’ duties to its invitees, even weak legal claims can be expected and can be expensive to defend. To address these claims, business and property owners should be aware of their duties and immunities under premises liability statutes, and carefully consider the steps they can take to not only protect themselves, their employees, and their customers, but prepare for defending a claim should one arise.

The clear first step for any business reopening is to be sure that they are up to date and following the most current federal, state, county, and city guidance for conducting business.  The government rules will likely be evidence of the standard of care required for the business and will act as the minimum that business owners should be doing to avoid or defend against liability.  Further, violation of government regulations can result in citations which, in turn, can be used as evidence of failing to meet that proper standard of care in subsequent lawsuits. Like government orders, business owners should be aware of regulatory guidance from entities such as the CDC or OSHA that may also be used to establish the minimum standard of care for business owners. 

Once business owners understand the government guidelines impacting their business, they should pay attention to what other businesses or property owners in similar businesses are doing to ensure safety on their premises.  While not everything other businesses are doing may work for every business, adopting additional commonly accepted and/or industry-specific safety measures is not only good practice, but can also be used to combat claims and show the business went above the minimum requirements to protect employees and the public.

Next, after generating reopening safety protocols, it will also be important to update and train employees who interact with customers or the public in general, in the business’ COVID-19 policies and procedures.  The training provided to employees, and the employee manual, can become an important issue if a claim is filed.   On balance, it must be understood that any breach of those training and reopening safety protocols could be used against the business should a claim arise.

Once guidelines are in place, and employees are trained, business owners should follow through with the protocols, and enforce them consistently. For example, if guidelines require or the business requires its employees to wear masks, business owners should monitor that employees are actually wearing masks.  Following through on the guidelines and the business’ own action plans for mitigation and safety will be vitally important in defending against a COVID-19 exposure claim.

Finally, any businesses should document their policies and procedures for reopening to ensure a consistent message to employees, as well as to create a record of the actions taken. For instance, a written action plan outlining the precautions implemented, the date those precautions were instituted, and the guidance or order suggesting or requiring the precautions will useful evidence when facing a claim.  Business owners may also wish to consider including specific protocols for dealing with third-party non-compliance with your established COVID-19 protocols.  Further, revising existing employee manuals to include the safeguards and requirements for employees will further memorialize efforts to proactively create a safe business environment for guests and any outside visitors.

These are just some of the steps that will help prepare businesses for reopening, and demonstrate an active effort to keep the business safe for employees and visitors.  However, even if every effort to ensure a safe environment at the business or property is made, it may be impossible to prevent all claims. In anticipation of this potential, it will also be prudent to review the coverage and reporting requirements of the business’ or property insurance policies in the event a claim is filed.

While it is impossible to anticipate every safety measure or risk associated with reopening a business during the COVID-19 pandemic, staying informed, being proactive with safety guidelines and training, and documenting the steps taken to protect invitees to the premises will go a long way to not only protecting the business, employees and customers, and help defend against future premises liability claims.

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