It is one of many disputes that have erupted in recent weeks over mask mandates from various state and local governments as well as individual businesses. The potential for customer conflicts is one of many risks businesses assume as they try to reopen and comply with public health guidelines and local and state law.
“Businesses have had many new requirements imposed on them and a number of their customers do not want to comply with them. It puts businesses between a rock and a hard place.” –Ralph Chapa, Kaufman, Payton & Chapa
In addition to mask requirements and temperature checks, some companies require customers to sign a waiver of liability for potential coronavirus exposure. A recent, highly-publicized liability waiver was required for registrants to accept COVID-19 risks inherent in attending President Donald Trump’s political rally held in Tulsa, Oklahoma on June 20.
“Businesses have had many new requirements imposed on them and a number of their customers do not want to comply with them. It puts businesses between a rock and a hard place,” said Ralph Chapa, Attorney, Kaufman, Payton & Chapa, Farmington Hills, Michigan. “Our recommendation is for businesses to comply with their governor’s orders. If you decide to have customers sign a release or a waiver that can go a long way toward preventing potential lawsuits.”
In-store fights over face covering requirements could leave employees vulnerable to injury while the attempt to enforce rules as well as endanger customers caught in the fray. While customers denied service may allege discriminatory practices, businesses that choose not to enforce governmental orders could also be accused of negligence. Such situations will likely be remedied in the court system, said Joseph Sweeney, Broker, Burns & Wilcox, New York, New York.
“I do not know how court battles over individuals’ claims that mandates infringe on their constitutional rights will play out,” Sweeney said. “Another unknown factor is the potential for complaints from individuals who may claim a business permitted their health to be compromised by not enforcing face covering mandates.”
While operating a business during a public health crisis holds a great deal of uncertainty, business owners can protect themselves and their assets with the proper Commercial General Liability (CGL) and Workers’ Compensation Insurance coverage.
Disputes can lead to lawsuits, other expenses
Mask mandates are increasingly creating conflicts between employees and customers. At Detroit, Michigan-area bars and restaurants some customers’ refusal to wear a mask has resulted in tense confrontations, arguments and even thrown drinks. In California, masks must be worn in most indoor and outdoor settings as of June 18—enforcing that rule has already necessitated calls to police.
In Los Angeles, where masks have been required for grocery store shoppers since April 10, a Target employee’s arm was broken on May 1 during a skirmish with a customer who refused to wear a mask. A Toronto convenience store owner was attacked in April by a customer who refused to wear a mask.
With employees at risk for injury, lawsuits and Workers’ Compensation Insurance claims could increase significantly. In 2017, approximately $62 billion in Workers’ Compensation benefits were paid to injured workers and the survivors of workers killed on the job. Currently, the third-leading cause of fatal occupational injuries in the U.S. is acts of violence and other injuries.
Legal costs stemming from customer allegations of perceived threats or injuries related to a mask requirement dispute could fall under a company’s Commercial General Liability (CGL) Insurance policy. “The first thing to look at is whether or not a business is acting reasonably, and in accordance with any duty that it would owe any of its patrons or invitees,” Chapa said, pointing to state-mandated mask requirements. “Obviously, you cannot control someone who refuses to comply.”
Physical restraint, he said, is not recommended. “That can cause all sorts of problems and create additional liabilities.”
Customers who claim they were exposed to COVID-19 because a business did not enforce proper protections, meanwhile, face a murkier path. CGL Insurance policies generally have pathogen or bacteria exclusions, Sweeney explained. “Those exclusions point to a fairly strong defense on behalf of a business owner who may be unfairly accused,” he said.
Given the risks inherent in operating a business, coupled coronavirus prevention-related requirements and the uncertainty that can accompany them, appropriate CGL Insurance coverage is essential.
Liability waivers could help in most states
Experts predict signing COVID-19 liability waivers could become the new normal before dining in a restaurant, working out at a gym, and getting a haircut or dental checkup.
When President Trump’s re-election campaign asked attendees to sign a waiver before its June 20 rally, the waiver explained that guests would assume all risk. “By clicking register below, you are acknowledging that an inherent risk of exposure to COVID-19 exists in any public place where people are present,” the registration form noted. “By attending the Rally, you and any guests voluntarily assume all risks related to exposure to COVID-19.”
“Businesses have to train their employees not to get involved. They are protecting their own employees as well as the general public.” –Frank Misuraca, Kaufman, Payton & Chapa
“In Michigan, which is pretty consistent with the majority of the states, waivers are valid,” Chapa said. “There is case law in Michigan to the effect that if you voluntarily sign a waiver it can be enforced even if you have not read the document.”
The language of the waiver cannot be convoluted, in fine print, ambiguous or fraudulent in any way. “If it is, the courts will strike it down,” he added.
Having large event attendees sign liability waivers could help prevent an overwhelming number of lawsuits, Sweeney said.
Individual allegations of liability can hinge on whether a company has been ordinarily negligent or grossly negligent in their actions, Chapa pointed out. “If you sign the waiver, are business owners always going to be absolved of liability? No,” he said. “If there is gross negligence involved, then the business owner could be held responsible.”
Companies that utilize waivers should continue to take the recommended precautions related to COVID-19, said Frank Misuraca, Attorney, Kaufman, Payton & Chapa, Farmington Hills, Michigan. “If a business owner makes patrons sign this waiver but then takes none of the governor’s recommended precautions, it is possible that would be considered grossly negligent,” he said. “On the other hand, a business owner of a gym who enforces masks and social distancing but still requires a waiver is doing something to protect you and also asking patrons to understand the risk that is involved.”
Businesses should also know that waivers signed on behalf of a child, for example, will likely afford no protection against liability. “Case law has come down that says parents cannot waive the rights of their children,” Chapa said. However, in Michigan, there is a statutory exception carved out for recreational non-profit organizations.
Whether or not they choose to have customers sign liability waivers, business owners should protect their interests by investing in CGL Insurance coverage that can help them mitigate costs related to incidents of all kinds.
Importance of public health guidance, de-escalation
All businesses should rely on state and public health guidelines when implementing new policies and procedures. “My suggestion would be to follow your local government’s recommendations and suggestions, and if none exist, follow what the Centers for Disease Control and Prevention is recommending you do as the country begins to open up,” Sweeney said.
“There are so many different angles and facets to these situations that no two circumstances will be identical. This is why it is imperative to consult someone with experience and expertise in writing insurance policies for your type of business.”–Joseph Sweeney, Burns & Wilcox
When conflicts arise, de-escalation should be the goal. After an incident at a Costco in May, in which a shopper refused to wear a mask and berated an employee, the staff member who handled the encounter was widely praised for his calm response. “The employee took the shopping cart, said you are no longer welcome at Costco, and then walked away,” Sweeney said, noting that this response is ideal. “I would suggest that customer-facing employees try to de-escalate the situation.”
If a customer refuses to comply, law enforcement should be called. “Calling the police is really the shop owner’s only option at that point,” Misuraca said. “Businesses have to train their employees not to get involved. They are protecting their own employees as well as the general public.”
Because confrontations with customers could happen at businesses of any size, no company should feel immune to potential lawsuits. Sweeney recommends business owners consult their insurance broker or agent about their current CGL Insurance coverage, to discuss how their needs may have changed since the start of the COVID-19 crisis.
“There are so many different angles and facets to these situations that no two circumstances will be identical,” said Sweeney. “This is why it is imperative to consult someone with experience and expertise in writing insurance policies for your type of business. If you own a restaurant, consult and insurance broker or agent who knows and understands restaurants—how they operate and what their liabilities are.”
This information was provided by Burns & Wilcox, North America’s leading insurance broker and underwriting manager. As with any coverage need, an insurance broker or agent must be consulted.