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What Businesses Need to Know About Immunity from COVID-19 Exposure Liability

August 4, 2020

By
Matthew R. Parsons
Member, Stoll Keenon Ogden PLLC
(859) 231-3961
matt.parsons@skofirm.com

By now, public-facing businesses know only one thing for certain about the COVID-19 pandemic: nothing is certain. Uncertainty has prevailed in recent weeks as a resurgence of positive cases has stalled or rolled back economic reopening plans throughout the country. And uncertainty prevails on a question that may be on the minds of many business owners – can my business be held liable if a member of the public is exposed to COVID-19 on the premises, and they can prove it?

A claimant’s challenge in proving exposure to COVID-19 at your place of business to the exclusion of the world at large may seem insurmountable. But with sophisticated contact tracing and the emergence of “hot spots” – where numerous cases are linked to a common location or event – proving exposure at a specific place and point in time becomes more plausible.

In recent months, federal and state lawmakers have debated the wisdom of providing special liability protections to businesses against lawsuits alleging injury or death from COVID-19 exposure. The discourse travels a well-worn path in a broader policy debate about tort reform. Proponents of immunity argue that frivolous lawsuits saddle businesses large and small with unnecessary costs and hinder reopening of the economy, while opponents assert that immunity protection disincentivizes businesses from taking needed safety precautions and promotes unsafe practices that jeopardize employee and public health.

In Congress, Senator John Cornyn (R-Texas) recently introduced Senate Bill 4317, known as the “Safe to Work Act,” which would significantly restrict traditional state law tort remedies available to plaintiffs seeking to recover from a business for COVID-19 exposure and subsequent injury. Specifically, the bill as drafted would require a plaintiff to prove by clear and convincing evidence that an individual or business: (1) failed to make reasonable efforts to comply with applicable government standards and guidance at the time of the alleged exposure; and (2) engaged in gross negligence or willful misconduct that caused an actual exposure to COVID-19 which resulted in injury to the plaintiff. The bill would also create concurrent federal district court jurisdiction for claims within its purview, and limit recovery to economic losses incurred except in cases of willful misconduct.

A number of state legislatures, including those in Iowa, North Carolina, Oklahoma, Utah, Wyoming, and Louisiana, have already enacted widespread immunity protections for businesses against COVID-19 liability. Alabama and Arkansas have provided for similar protections by executive order.

Kentucky, thus far, has not taken such broad measures to protect businesses from COVID-19 liability. Governor Andy Beshear signed Senate Bill 150 into law on March 30, 2020. SB 150 offers limited protections to Kentucky businesses that make or provide personal protective equipment or personal hygiene supplies in response to the state of emergency, but don’t normally make such products in the ordinary course of their business. While this provision might provide a defense to a bourbon distillery for claims arising from its manufacture of hand sanitizer, for example, it would not immunize that same distillery from a claim by a visitor alleging COVID-19 exposure on a tour of the premises.

Likewise, Indiana has not enacted widespread business immunity protections against COVID-19 liability. However, Indiana Governor Eric Holcomb recently led a group of 21 governors urging Congress to enact federal civil liability protection for businesses and schools, writing that “[w]hen Americans take sensible steps to implement public health best practices, they should have confidence that they will be secure from unreasonable claims. Liability protections must be predictable, timely, targeted, and shield employers from legal risk when following the appropriate standard of care to protect employees, customers, and students.”

When it comes to managing business exposure to COVID-19 liability claims, immunity legislation may help but is not a panacea. Even the most restrictive immunity laws do not preclude a lawsuit from being filed or excuse a business from appearing to defend it. Furthermore, defendants in immunity states could quickly become entangled in arguments about whether a particular practice or failure to act constitutes ordinary or gross negligence, potentially prolonging litigation. Whether or not immunity is available, businesses can best manage their liability risk through strict compliance with governmental mandates and public health guidance and rigid execution of internal safety and health procedures designed to prevent or limit the spread of the virus.

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Stoll Keenon Ogden’s Tort, Trial and Insurance Services practice attorneys are ready – as the firm has been for more than 120 years – to answer your questions about business immunity related to the COVID-19 pandemic.

On our Stoll Keenon Ogden website, you’ll find a variety of resources, including the latest information on new laws and directives enacted by federal, state, and local governments; access to firm attorneys; and details about other business considerations related to the global pandemic.