Hospitality businesses enter uncharted waters with liability issues during pandemic

Hospitality businesses enter uncharted waters with liability issues during pandemic

Businesses within the hospitality industry are currently navigating uncharted territory.

Many are trying to manage the delicate balancing act of reopening, with relatively minimal requirements and guidelines from the DHS and CDC, while being foremost committed to keeping patrons and staff healthy.

There are published mandatory minimum standards that must be met; however, there seems to be little guidance or consistency on what is expected from a business should the inevitable happen and they have a staff member or guest receive a positive COVID-19 test. Some affinity organizations are providing sound advice, but the ultimate responsibility and decision still lies with the individual business owner. Many of these restaurants and hotels are trying to salvage the lives of their businesses while also providing a much-needed respite and resource for those of us that rely so heavily on their services.

The good news is that there is hopefully some protection headed their way.

State lawmakers recently passed SB 359, the “Georgia COVID-19 Pandemic Business Safety Act,” a law that will take effect Aug. 7 or as soon as the governor signs it … unless otherwise vetoed. Contained within SB 359 is broad-based liability protection for businesses by increasing the liability standard to gross negligence. The bill also specifically prescribes to businesses language that, when posted or published per the bill’s instruction, will provide a “rebuttable presumption of the assumption of risk.” In other words, unless a business can be found to be grossly negligent in its operation, that business will have increased legislative protection against lawsuits alleging the contraction or transmission of the virus at a place of business.

This is a great first step to allowing businesses and patrons alike the ability to feel safe while carefully and cautiously attempting to restore some sense of normalcy.

However, it still doesn’t answer many of the aforementioned questions. The disparity between what “should” a business do and what “must” a business do has never been greater. Furthermore, even with some legally inherent protections, it still doesn’t mean that a business will not face a lawsuit.

Many insurance carriers are still maintaining their positions that for both loss of business income and liability or allegations of liability arising out of COVID-19, insurance coverage may be excluded. There are numerous active cases challenging these carrier interpretations; however, until such time as a decision has been rendered in these cases, business owners will have to continue to navigate these uncharted territories.

For example, a restaurant owner learns of a staff member who tests positive. It is currently not a requirement from the CDC or DPH for this owner to close his place of business. For the safety of his team and his patrons, he chooses to close for several days and sanitize his premises at a tremendous cost and a tremendous loss of revenue and at a time when revenues are still trying to catch up with accumulated expenses. As cases continue to increase, both symptomatic and asymptomatic, is that a viable option every time there is a positive case? How many shutdowns like this can a business sustain while revenues are already depressed?

Our state legislatures took a great step toward protecting our business owners and allowing our economy to “re-open” where it can safely do so, and kudos to them. That being said, our business owners, especially those in the hospitality sector, continue to experience many roadblocks. It is important that where we can safely and responsibly do so, that we continue to support these businesses and their livelihood.

Click below to hear Ryan Sewell talk with Georgia CEO about the impact COVID-19 has had on the hospitality industry.

Seen in…

Savannah Morning News

Savannah CEO

Athens-Banner Herald