The National Federation of Independent Business (NFIB), one of the country’s largest small business advocacy groups, has announced a list of “Liability Protection Principles” meant to protect small businesses from the threat of lawsuits as the economy begins to reopen.
A recent survey from the NFIB found that 70 percent of small business owners are concerned about liability claims, with only six percent unconcerned. To that end, the NFIB is lobbying Congress to address their liability concerns as the nation returns to a more open economy.
“As small business owners across America begin the process of reopening, it’s imperative that we establish protections from the threat of lawsuits that exploit the already damaging effects of COVID-19,” said Karen Harned, executive director of the NFIB Small Business Legal Center in Washington, D.C. “We urge Congress to address these Liability Protection Principles so that our nation’s small businesses who have fought to survive over the course of this pandemic can get back to work without fear of costly legal battles.”
The issue may be of particular interest to small businesses in Georgia as groups have identified the state as a perilous one for liability issues. The Georgia Supreme Court and trial courts across the state have expanded premises and medical liability, and “nuclear verdicts” with huge payouts are becoming more common.
“Last year, Georgia made the American Tort Reform Foundation’s list of judicial hellholes for the first time ever,” said NFIB State Director Nathan Humphrey. “Small businesses were devastated by the shutdown. Georgia businesses are beginning to reopen, but even one frivolous lawsuit could force a small business to close its doors for good and leave its employees without jobs.”
The list of recommendations is relatively short, just four items:
1. The Workers Compensation system should be the exclusive vehicle employees who suffer serious physical injury from COVID-19 at work use to adjudicate their claims.
2. Businesses should be protected from liability to customers and other third parties unless those customers or parties prove the business knowingly failed to develop and implement a reasonable plan for reducing the risk of exposure to COVID-19 and that failure caused the injury.
3. Permitted lawsuits should be limited to persons who experience a serious physical injury due to COVID-19 resulting in hospitalization. Many who are diagnosed with COVID-19 never show any symptoms and the NFIB is concerned about possible frivolous lawsuits from these individuals.
4. Fines should be imposed on unscrupulous trial attorneys bringing frivolous COVID-19-related lawsuits. Small business owners do not have in-house counsel and the vast majority cannot afford to hire lawyers to defend their business and reputations in court. Trial lawyers know this and, as a result, small business owners are easy targets for the plaintiff’s attorney looking for a quick payout. Trial attorneys should be penalized – not incentivized – for bringing a frivolous COVID-19-related lawsuit.
As Washington focuses on ensuring all businesses can reopen and kickstart the economy, this issue may end up on the agenda.
