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How Liability Waivers Can Protect Businesses in the Era of COVID-19

April 29, 2020

As governments try to balance health risks and economic concerns, many businesses will reopen long before a coronavirus vaccine is ready. Even if employers take all precautions to reduce the risk of exposing employees and customers to infection, there is no guaranteed way to prevent the spread of the virus. Businesses that attract groups or require person-to-person contact – such as restaurants and hair salons – and participatory businesses – like climbing gyms, trampoline centers and yoga studios – are especially at risk. 

These participatory businesses, which typically require attendees to sign liability waivers, now face another risk that may not seem naturally inherent in the actual activity.  White House officials are debating the legal and political ramifications of a potential “liability shield” that would protect businesses from being sued by customers and employees who contract the virus.  The proposal has been met with resistance from groups that warn it could allow employers to escape consequences for unsafe practices.

Because of this uncertainly, business, especially those that invite a large number of people or require close contact, should consider updating their existing “assumption of risk” liability waivers. These updates should include language specific to the coronavirus and the possibility of exposure, even if the business takes additional affirmative precautions to reduce such a risk. Companies that do not typically have a liability waiver but expect to face further scrutiny and heightened risk in this new environment – such as surgical centers, and dental and medical offices – may want to consider including a virus-specific waiver or language in their intake forms.

With respect to the coronavirus, this is an evolving and untested area of the law. Many states already limit or prohibit liability waivers, and states that do allow businesses to avoid certain liability require waivers to meet specific standards to be enforceable. Courts are already hesitant to allow a liability waiver to bar an injured party’s opportunity to pursue damages, so businesses seeking to protect themselves from this new risk as they reopen should consult a legal professional before making such policies.

Please contact Derek Larsen-Chaney or Phelps’ Business team if you have any questions or need compliance advice and guidance. For more information related to COVID-19, please also see Phelps’ COVID-19: Client Resource Portal.