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As Congress Negotiates, States Create Immunity for Wider Range of Businesses Facing COVID-related Claims

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After immunizing the health care sector and manufacturers of personal protective equipment from certain types of claims arising out of the COVID-19 pandemic, the federal government and several states are contemplating expanding similar protections to a broader swath of businesses. Those in favor argue immunity is needed to avoid further economic harm to businesses and to help jump start an economic recovery. Opponents worry creating immunity will incentivize businesses to be too lax about health, safety, and environmental protocols as stay-at-home orders evolve to allow more personnel to return to the workplace.

But state governments are not waiting for federal action. Some have already enacted legislation to bar or limit liability for COVID-related claims, and still more are considering it:

  • Utah enacted S.B. 3007 creating immunity from civil liability for damages or an injury resulting from exposure of an individual to COVID-19 on premises owned or operated by the business or during activity managed by it, except in cases involving recklessness, willful or intentional conduct.
  • North Carolina’s S.B. 704 is similar, but protects only essential businesses in claims by customers or employees for injuries or death alleged to have been caused as a result of the customer or employee contracting COVID-19 while doing business with or while employed by the essential business. Like Utah, North Carolina’s immunity shield does not apply in cases involving gross negligence, reckless misconduct, or intentional infliction of harm.
  • Several other states are considering similar measures. In Texas, the Texans Back to Work Task Force has recommended a safe harbor from liability for businesses acting in good faith and following COVID-19 safety protocols. Alabama and Ohio legislatures have proposed immunity, and others appear to be considering it or, alternatively, damages caps on COVID-related claims. 

We expect this trend to take hold and produce a patchwork of new defenses to claims arising out of COVID-19 exposure. We anticipate wide variations among the new laws—some will apply only to certain sectors, some may be retroactive, some may limit rather than eliminate liability, and some will explicitly address the effect these measures have on existing workers’ compensation and other regulatory regimes.

The legal landscape will continue to shift, albeit at an unpredictable pace, for businesses facing COVID-related claims by customers, employees and contractors. Be aware that many jurisdictions may implement an applicable immunity defense or other protective measure even after a claim arises or is filed. The uncertainty of governmental action on defenses to COVID-19 claims, however, requires businesses to remain vigilant in complying with COVID-19 safety protocols and documenting the good faith reasons the business departs from the protocols.

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