As state reopens, liability around new infections is an unknown

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Burlington Coat Factory on South Willow Street opened May 15 to a crowd of eager shoppers. It is one of the first large scale clothing retailers to open as part of the “NH Stay At Home 2.0” advisory. Photo/Jeffrey Hastings, frameofmindphoto.com

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As businesses slowly begin to reopen under the mandatory guidelines of the governor’s task force that are aimed at ensuring safety of employees and customers amid the COVID-19 pandemic, the question of liability on the part of an establishment where someone could claim to have contracted the virus seems certain to arise.

The governor’s task force, which is comprised of state officials, legislators and business leaders representing a variety of industries, lays out in detail the steps that have to be taken for reopening.

For example, under consumer protection for restaurants there are 15 procedures for consumers or employees, and nine business process adaptations that owners must implement. Many of these are familiar and include steps that have been emphasized the last few months, like wearing masks and gloves, keeping patrons at least six-feet apart, and sanitizing surfaces regularly. Others require more time and money, such as “building social distancing into foodservice operations” and training employees on the importance of hand-washing.  

The guidelines are tied to Gov. Chris Sununu’s emergency orders and include enforcement procedures that can be carried out by local law enforcement. The primary goal of enforcement is to inform the public of the importance of the order and seek voluntary compliance. Therefore, initial violations would carry a warning only, while repeated violations could result in a summons or arrest, according to a memorandum that the state Attorney General’s office issued on March 27. Failure to abide by warnings or to correct the alleged violation could lead to criminal charges, the memorandum states.

Neither Chris Nicolopoulos, commissioner of the New Hampshire Insurance Department,  nor Joan Pageau, vice president of the New Hampshire Association of Insurance Agents, would speculate on possible insurance protection that exists or may be created for small businesses faced with potential legal action related to the pandemic.

“I can’t really say a lot. It will depend on the carrier, on the policy, the type of business,” said Pageau.

In Claremont restaurant owner Mike Charest recently reopened Taverne on the Square for takeout service. He said that employees were carefully following guidelines for sanitation and frequent cleanings in his restaurant.

“We have hand sanitizer here, we wiped down the counters every time a customer leaves and everyone is wearing masks and gloves,” said Charest, confident they are adhering to the state’s guidelines.

But on the question of liability should someone contract the virus and claim it was at the restaurant, Charest is less certain. His insurance broker told him that coronavirus-related claims would not be covered, adding that there are exclusion clauses for viruses and other bacterial infections.

“Virtually every policy has that on it,” said Charest.

Richard Logan, President of The Goss Logan Insurance Agency in Lebanon, wrote in an email that “standard commercial property form language excludes coverage for communicable disease.”

Logan said  he has not received any “questions regarding general liability issues to the general public.”

“Thus far the majority of questions we have fielded relate to business interruption and worker compensation,” Logan said, adding that of the 13 business interruption claims he has filed on behalf of clients, all have thus far been denied by the insurer.

“Congress is currently debating and challenging insurers to reconsider their position to pay loss of income claims,” Logan wrote.

The office of the governor did not respond to an email asking about whether state officials have discussed the possibility of a lawsuit against a retail store or restaurant and what might be considered to protect the small business.

While it may be too soon to determine the likelihood of a lawsuit and it may be hard to prove someone contracted the virus at a particular location, the association representing trial attorneys in New Hampshire sent a letter to the governor and Senate and House leaders stating that businesses must be held responsible if their practices or lack thereof, result in someone getting sick.

“Companies must be obligated to treat the health and wellbeing of employees and customers alike with the utmost concern, or reopening may not be responsible,” wrote Marissa Chase, executive director of the New Hampshire Association for Justice (NHAJ), in an April 30 letter to Gov. Chris Sununu, Senate President Donna Soucy and House Speaker Stephen Shurtleff. 

“Businesses should not be relieved of their duty to take reasonable and responsible steps to prevent the spread of this virus,” Chase wrote. “The freedom to reopen their doors must come with the obligation to do so responsibly.”

Chase, who said the association members “prefer lawsuits not happen,” cited a South Dakota company that “triggered an outbreak” among employees by failing to limit exposure to the coronavirus. She said other examples exist in nursing homes and grocery stores, where employees are not protected or are asked to return to work prematurely after testing positive for COVID-19.

“No one would expect businesses to act perfectly, and it is important to note they are only responsible for the harm that they cause if it can be proved they fail to act reasonably under the circumstances,” Chase wrote.

While the NHAJ does not mention insurance coverage for businesses to guard against action by an employee or customer, it does recommend that New Hampshire insurers consider following the steps taken by The Kentucky Employers’ Mutual Insurance company which, according to Chase’s letter, has agreed to “pay wage-replacement benefits to any first-responder or medical employee who is quarantined because of direct exposure to anyone diagnosed with COVID-19.”

What lies ahead for retail stores and restaurants in terms of liability is unknown, but at the state and federal level work is being done to protect businesses, said Nancy Kyle, president of the New Hampshire Retail Association, and a member of the reopening task force.

“I think in general businesses are worried about liability because of COVID,” Kyle said. “Nothing has been brought forth yet. It is brand new territory.”


GSNC 2 ColorThese articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org. 

 

 

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