Re-Open for Business: How to Protect Yourself from Liability

As shelter-in-place restrictions loosen, your business may be preparing to reopen to a new normal. But before you hang out the “Open” sign, you need to protect your business (and yourself) from COVID-related liability.

Jerimy Kirschner is a licensed attorney from Tacoma, Washington who primarily practices civil litigation. He’s sharing some valuable insights and common-sense steps you can take to avoid being hit with a coronavirus claim.

As most business owners know, when you bring customers or employees onto your property, you have a duty to keep them safe while they’re there.  If you don’t take preventative measures and someone gets hurt, you could be held responsible for it.

Moving forward, I think we’ll see legal action taken on behalf of people who claim they were exposed to COVID-19 while at a particular business. In fact, we’ve already started seeing some of those lawsuits around the country.

Where are you liable?

Your primary sources of liability are from your customers, your employees and possibly third parties like vendors who claim that they got sick because you didn’t maintain a safe environment. In the unfortunate event that you are the subject of a claim, it could be made against:

Your business

A claimant may decide to sue your business and come after whatever assets the business has through your insurance policies. We may also see harassment suits where somebody makes a claim against your business for an amount that’s just under your deductible in an attempt to make some quick cash.

You as an individual

If you’re the one who’s dictating what safety procedures are in place, the injured party might also come after you as an individual.

What you can do

While these types of claims are cause for concern, there are lots of ways you can reduce your risk of liability.

First, make sure that you have written policies and procedures in place for what you and your business are doing to keep your customers, employees and vendors safe. That could include anything from how you maintain social distance at your business, what sanitation measures you’re taking, how often you conduct wellness checks and whether you allow employees to work remotely.

My local chamber of commerce has a work playbook with some great information about COVID-19 related safety policies and procedures you might want to consider. You can check it out here. Paychex has also put together an eBook filled with tips on how to get up and running in the post-coronavirus era.

Build Your Defense Now

As you’re creating all of these policies and procedures, it’s important to maintain paper trails. Until legislation comes in to provide some kind of limited liability waiver to businesses, you’re going to need to build a strong defense now. Here’s how:

• Share any policies and procedures that you create with every one of your employees, and be sure they read the paperwork and sign off on it.
• Make sure management has training on those policies and procedures, and that they’re being strictly enforced.
• If there are any non-compliance issues, particularly if you have customers who refuse to abide by your restrictions, create an incident report. That way you’ll have a record of what your response was—for instance, did you ask the customer to leave the building? This will show that you were carrying out your duty to try to protect the people who were coming on to your premises.

Do Your Insurance Homework

This is probably my most important piece of advice: if you haven’t yet, get copies of your insurance policies and do a deep-dive review before reopening.

See whether your insurance policies cover a claim like this that could arise. Sometimes they’ll have an exclusion for it at the very end of the document, so don’t fall asleep in the first ten pages of your insurance policy—read through the entire thing!

Also, find out if you have an umbrella policy that covers you as an individual and whether it would cover any potential coronavirus claims that could be asserted against you or bleed over from your business.

Finally, as you renew your policies, be sure to check if there are any new exclusions that have been added that would keep your insurer from having to pay out on any of these claims.

Obviously, you can’t bubble-wrap yourself, your employees or your customers as soon as they walk through the door. But know that your business is going to be measured against a sliding scale of duty—and the more that you do to protect people, the more likely it is that you’ll be insulated from liability in the days to come.