Liability Immunity from COVID-19

As restrictions are lifted and businesses begin to slowly reopen amid the coronavirus pandemic, they are working to keep their employees and customers safe – following CDC and FDA guidelines that include implementing social distancing requirements, providing workers with personal protective equipment (face masks, gloves, etc., depending on the industry), upgrading cleaning and sanitizing practices, and making workspace floor plan changes, among many other recommendations. But for many businesses, including restaurants, retailers and others, there is fear that if a customer or employee is infected by the virus he or she will turn to the courts alleging the business is responsible for their illness. As a result, businesses are turning to the government for liability protection. 

Many Fear Losing Business If They Reopen without Liability Protection

Business owners across the country have voiced concern that the pandemic has already put their operations on shaky ground. A COVID-19-related lawsuit from a worker or customer could force their business to shut down permanently. Lawsuits, in fact, are already in the works. For example, Wal-Mart was hit with a wrongful death lawsuit after an employee in Illinois died from COVID-19 complications, alleging the proper employee protection measures were not in place. Passengers are suing cruise lines.

For a business to be held liable for a COVID-19 illness, an infected customer (or employee) would first have to prove that the establishment is where transmission of the virus occurred. According to law experts, this is a difficult obstacle to overcome unless the individual can prove he or she didn’t have contact with anyone else during the coronavirus’ incubation period of up to two weeks. Even so, the legal fees for such a lawsuit could be very costly and shutter a business during these challenging times.

“A wave of personal-injury cases could bankrupt businesses, according to the U.S. Chamber of Commerce, which is recommending government protections. The Chamber Institute for Legal Reform also released a poll recently showing that Americans across the political spectrum believe that employers must have protections from COVID-19-related lawsuits as they make decisions about how to safely and sustainably reopen their businesses.

Talks of Liability Shield on the Table

In April President Trump’s economic advisor, Larry Kudlow, told CNBC that the administration will look at limiting liability for businesses over the spread of the coronavirus. President Trump has also indicated the administration is looking to limit liability in cases where workers, or possibly customers, fall ill from the virus. “We have tried to take liability away from these companies,” the president had said at a White House news conference. He added that he would seek a legal opinion on the matter but said details of an approach hadn’t yet been discussed.1

Even more recently, Republican senators have weighed in on the need for a liability shield against COVID-19 claims for businesses. Senate Majority Leader Mitch McConnell has called liability protections a must-have “red line” for Republicans in creating the next stimulus package.2

Furthermore, along with McConnell, House of Representatives Republican leader Kevin McCarthy issued a joint statement redoubling their demands that “Americans on the front lines of this fight must receive strong protections from frivolous lawsuits.”3

Distinguished will continue to monitor this issue as it unfolds and will keep you informed on developments.

Sources: 1Bloomberg, 2Wall Street Journal, 3Reuters, NPR