As phased reopening plans are initiated across the country, many business owners are fearful that reopening may bring with it the possibility of significant liability exposure for COVID-19 related lawsuits. Businesses already feeling the impact of a national economic crisis could face an even more devastating financial impact absent some type of protection. It is inevitable that members of the public will continue to contract COVID-19, despite the precautionary measures in place and those contemplated by businesses that have yet to open. Many argue that in order to seriously consider reopening, businesses must be afforded some legal certainty that they will not face a flood of lawsuits from individuals that contract the virus. While it may be difficult for a plaintiff to ultimately prove that they contracted COVID-19 from a particular business, rather than from some other source, the costs associated with defending such lawsuits could place some businesses in financial jeopardy. In an effort to address these concerns and provide businesses with the confidence to reopen, a growing number of states have considered legislation aimed to immunize companies in various sectors from liability for potential lawsuits by individuals that contract COVID-19.

In the early stages of the pandemic, many states granted immunity to health care providers through legislation or executive order. More recently, states have both considered and enacted legislation that extends immunity to a much broader scope of businesses and other entities. For instance, North Carolina has enacted legislation offering limited immunity from civil liability for essential businesses in the state with respect to claims by customers and employees for injuries or death alleged to have been caused as a result of contracting COVID-19.[1] Emergency response entities are also afforded this immunity in North Carolina. There are, however, limitations to the immunity provided. There is no immunity if the injuries or death were caused by an act or omission of the essential business or emergency response entity that constituted gross negligence, reckless misconduct, or intentional infliction of harm.

Oklahoma offers even broader protection, as its recent legislation affords anyone who conducts business in the state immunity from liability in any civil action involving allegations of exposure or potential exposure to COVID-19 if the act or omission alleged to violate a duty of care was in compliance or consistent with federal or state regulations, executive orders, or guidance applicable at the time of the alleged exposure.[2] If two or more sources of guidance are applicable to the conduct or risk at the time of the alleged exposure, the person or business will not be liable if the conduct was consistent with any applicable guidance.

Similarly, Wyoming has passed legislation that provides immunity from liability for any health care provider or other person, including a business entity, who in good faith follows the instructions of a state, city, town, or county health officer or who acts in good faith in responding to the public health emergency.[3] Immunity does not, however, apply to acts or omissions that constitute gross negligence or willful or wanton misconduct. Following the enactment of this legislation, the Wyoming Business Alliance urged the Joint Judiciary Committee to consider amending the statute to eliminate perceived ambiguity in its terms. Specifically, it proposed revisions to the statutory language to expand and define the specific entities that are shielded from liability, as the current version does not address its applicability to non-profit organizations, unincorporated organizations, or political subdivisions, which are equally susceptible to COVID-19 liability exposure.[4] The Joint Judiciary Committee ultimately voted to draft a bill to incorporate these suggestions, though it rejected others, such as a proposal to require “clear and convincing evidence” to prove gross negligence under the statute.

Utah has also passed legislation that provides immunity from civil liability to all persons and premises for damages or injury resulting from the exposure of an individual to COVID-19, but it does not apply to willful misconduct, reckless infliction of harm, or intentional infliction of harm.[5] In addition, the Governor of Louisiana recently signed a bill into law that provides immunity to restaurants from civil liability for COVID-19 related lawsuits, provided that they are in substantial compliance with applicable COVID-19 procedures.[6] The Louisiana legislation similarly provides an exclusion for injury or death caused by gross negligence or willful and wanton misconduct. Iowa was the most recent state to enact similar business immunity legislation on June 18, 2020.[7]

The Governor of Arkansas bypassed the legislature and signed an executive order that expands COVID-19 related civil liability immunity for businesses. The executive order provides all businesses and their employees with immunity from civil liability for damages or injuries caused by or resulting from exposure to COVID-19, though immunity does not apply to willful, reckless, or intentional misconduct.[8]

In addition to the states profiled above that have passed legislation to protect businesses, several other states have also introduced legislation to immunize businesses from COVID-19 lawsuits. For instance, the Georgia legislature has introduced a bill that would provide broad protections from civil liability to Georgia businesses under certain circumstances[9] and the Tennessee legislature is considering similar legislation.[10] North Carolina, which previously passed legislation to immunize essential businesses from liability, has now introduced a bill which would extend those protections to essentially every business in the state, as well as government agencies.[11]

On the other hand, a number of states, including those in New England, have failed to take significant steps towards extending the immunity that protects their health care industries to other businesses. All of this may be moot, however, as it is expected that the federal government will pass legislation to protect a broad spectrum of businesses, as Senate majority leader Mitch McConnell has identified business immunity as his top priority, with the White House echoing that sentiment.[12]

Efforts to immunize businesses from liability for COVID-19 related lawsuits have been met with a great deal of opposition across the country. Those opposed to immunity legislation have stressed that negligence and other laws have been established to ensure that businesses take the proper precautions to ensure the safety of those to whom they open their doors. They argue that if businesses are allowed to take the possibility of liability off the table, they may not adhere to the applicable health and safety standards, thereby putting more people at risk and endangering lives. They also argue that the threat of being held accountable in court provides businesses with a strong incentive to ensure that they are acting both safely and responsibly. Proponents of immunity legislation contend that the exclusions for more egregious conduct, such as gross negligence, offer a compromise, as the legislation serves to protect businesses, while incentivizing their compliance with applicable safety regulations and furnishing an avenue for recovery against those who fail to comply with those safety regulations.

Lawmakers across the country continue to attempt to strike a balance between the need to financially protect businesses amid a financial crisis and the need to ensure the safety of the public during a global pandemic. The protections afforded to certain businesses from civil liability in some states are not without limitations and do not provide blanket immunity. This conditioned immunity legislation should serve to limit COVID-19 claims by providing businesses with a defense. Such legislation does not, however, prevent plaintiffs from filing such lawsuits in the first place. Accordingly, all businesses must be careful to monitor and strictly comply with the evolving state and federal mandates and safety guidelines pertaining to their specific businesses and/or industries as the country continues to navigate these unprecedented times.

[1] The Governor of North Carolina signed Senate Bill 704 into law on May 4, 2020.

[2] Senate Bill 1946 was approved by the Governor of Oklahoma on May 21, 2020.

[3] Wyoming’s Senate File No. 1002 was signed into law on May 20, 2020.

[4] A representative of the Wyoming Business Alliance presented these proposed revisions, among others, to the Joint Judiciary Committee at a meeting held on June 4, 2020.

[5] Utah S.B. 3007 was signed into law by its Governor on May 4, 2020.

[6] The Governor of Louisiana signed Senate Bill No. 508 into law on June 12, 2020.

[7] The Governor of Iowa signed SF2338 into law on June 18, 2020.

[8] The Governor or Arkansas issued Executive Order 20-33 on June 15, 2020.

[9] Georgia’s Senate Public Safety Committee passed House Bill 216 on June 15, 2020.

[10] The Tennessee Safe Harbor and Recovery Act (SB2381/HB2623) continues to advance and is close to being approved by Tennessee lawmakers.

[11] House Bill 118 is in the process of being reviewed by the North Carolina Senate.

[12] In an interview on May 21, 2020, McConnell told Fox News that one of his “red lines” in the next bill is liability protection, though it would not protect against gross negligence or intentional misbehavior.