August 26, 2020
Wednesday AM

Alaska is beginning to re-open our economy post-COVID and the economic impact has been particularly felt by our small businesses. Employers have especially valid concerns, since they must concern themselves with their own health and the health of their employees and patrons, but also the future of their businesses.

Small businesses are particularly vulnerable to lawsuits from customers and employees contracting COVID. For that reason, Alaska needs to implement its own business liability protections, as many states have already, without waiting for the federal government to act – businesses need confidence in order to reopen and bring our economy back online.

Small business owners are concerned about liability for their businesses, and for good reason. A NFIB survey found that about 70 percent of small business owners surveyed are concerned about increased liability during the reopening of their states. In states without COVID business liability protections, a single lawsuit could devastate a small business through damage payments and legal fees, even without proving negligence or malice. The mere threat of burdensome legal fees, negative publicity, and dozens of spurious lawsuits will chill the economy. After weeks of mandated closures, it’s a financial risk that many small businesses may be unwilling to undertake.

As of August 7, nine states have protected their businesses, and others are moving in that direction. New safeguards in Utah, Oklahoma, Wyoming, Iowa, Louisiana, Tennessee, Georgia, and Mississippi apply to all businesses, while North Carolina extended protections only to “essential businesses.” Kansas included provisions in its COVID omnibus bill.

Opponents to providing reasonable liability protection claim that it isn’t warranted and is unfair to workers. Yet employees and consumers can still find recourse – all of the new policies exclude liability protection in cases where the business owner didn’t take proper precautions (negligence) or was malicious.

The best approach is to provide protection from COVID-related litigation for businesses that demonstrate judicious compliance with health guidelines issued by federal, state, or local health officials. In Oklahoma and Louisiana law, where more than one conflicting guideline applies, the business only needs to fully comply with one to be shielded from liability – that is, a business cannot be sued for following one guideline instead of another. This is reasonable, since businesses are already scrambling to keep up with recommendations that change on a daily basis.

Iowa also limits lawsuits to those involving hospitalizations or deaths and requires proof of “actual malice” in order to win a case. This deters spurious lawsuits from patients who were never hospitalized and recovered without incident, as well as sets a high standard of proof. Iowa and Oklahoma also explicitly bar suits based on “potential exposure,” which is meant to further discourage illegitimate claims from people who never got sick.

Both Wyoming and Mississippi mention the business’ “good faith” compliance with public health guidelines. A provision like this could be seen as overly generous, but it has the distinct advantage of protecting business owners who are doing their best – as well as those doing more than required – from liability. We should encourage our businesses to go above and beyond what is mandated, but few are able to if it leaves them open to risk.

Ideal protections for businesses would likely include a “good faith” compliance clause, like Wyoming and Mississippi, and businesses would only have to comply with one set of standards, if several exist and are inconsistent. And finally, any permanent solution would not protect businesses acting recklessly or demonstrating willful misconduct, leaving ample avenues for consumers to find recourse.

Even though Congress keeps promising business liability protection, waiting for the federal government to pass reforms would be a mistake: not only because that protection may not come, but because Alaska needs protections at the state level that are immune from the whims of Congress. Further, it’s unlikely that a federal “solution” would take into account the nuance of Alaska’s economy; state-level protections focused on Alaska would be more effective.

As Alaska maneuvers through this pandemic, it’s critical to protect our small businesses who are complying with public health guidelines from COVID liability. Otherwise, we could lose them forever.

Win Gruening
Juneau, AK 99801

About: Win Gruening is a retired Senior Vice President in charge of Business Banking for Key Bank in Alaska. He has been involved extensively in various local and statewide organizations such as United Way, Junior Achievement, Alaska Bankers Association, and the Alaska Committee, and currently serves as an Alaska Policy Forum board member.

Editor's Note:

The text of this letter was NOT edited by the SitNews Editor.

Received August 18, 2020 - Published August 26, 2020

Related Viewpoint:

An Inquiry into Business Liability Protection in Regards to COVID 19 By David C. Spokely

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