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COVID-19 Liability Risk: Potential Claims Your Business May Face

  • September 21, 2020

If you're reading this, I'm earning money. Thanks for helping to feed my family. Please see our disclosure for more information. Also, any advice provided is for informational purposes only. I'm not a CPA, lawyer, or doctor, although my parents wanted me to be all three. So, talk to a professional before acting on anything you read below.

covid-19 liability risk

After months of lockdowns, reopening has come as a relief for businesses, at least from the financial perspective. It is a chance to be back on your feet but there are more challenges than you can imagine when it comes to being back to work in the new normal. Things aren’t that great on the operational fronts because you will need to implement stringent guidelines to ensure the safety and well-being of the employees, customers, and visitors.

Moreover, businesses face potential liability related to exposure to the virus as employees, customers, vendors, and other parties enter their premises. Unfortunately, this risk of liability is unavoidable until the pandemic goes away. So it becomes important for business owners to be aware of the potential claims and have a strategy to deal with them. Here are the ones you need to steer clear of.

Premise liability statutes

Under the premises liability statutes, owners, and people in possession of the real property are responsible for ensuring that their property is reasonably safe for customers, vendors, and visitors who are allowed to enter the place. Further, they also have to warn the visitors about the hazardous conditions on-premises and inspect for hidden dangers as well. You may expect premises liability claims in the current situation if you fail to implement proper measures to protect the employees and visitors from COVID-19 exposure. Failing to issue warnings about risks if an employee is infected or even taking steps like a temporary shutdown can also bring a lawsuit.

Related: Coronavirus Money and Business Resources

Negligence-based claims 

When a business owner breaches the standard of care they need to follow, they can come across negligence claims. Such a claim can arise if you put a visitor at risk or fail to act reasonably to counter a reasonably foreseeable risk. You will have to learn more about personal injuries related to negligence before you apply the same in the context of COVID-19. For example, if you run a food delivery business, you are responsible to maintain reasonable standards of care to ensure hygiene for delivery. In the pandemic world, there is a need to go the extra mile with steps like contactless delivery and risk-free packaging to steer clear of negligence-based claims.

Claims for misleading advertising

Another prevailing risk for the COVID era relates to misleading advertising by businesses. Many companies are talking about the measures they are implementing for consumer safety and reducing risk in operations and on-premises. These advertisements are exposing business owners to potential lawsuits for false and misleading claims. Customers and third-parties may sue you for making factually inaccurate statements and even if the advertising leads to untrue implications. So you need to be extra careful about what you promote and ensure that you have tangible measures in place to validate your statements.

The situation is very uncertain and no one knows how things will pan out in the future. Keeping yourself safe from lawsuits becomes a necessity for every business owner because a legal challenge is the last thing you would want to face in a crisis like this.

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