Lawsuit fears have small-business owners on edge

While most businesses that survived the COVID shutdown are glad to be back at it, many can't help but fear that another wave of frustration may be in the offing, this time in the form of lawsuits from those who blame their illness on their employers' negligence.

In a poll released in June and conducted by the U.S. Chamber of Commerce, a majority of small-business owners say they're concerned about the potential of being sued for how they handled COVID-19.

Respondents were asked to look ahead a few months and forecast what, if any, issues they could see occurring at that time. The top response among both small businesses employing 20 to 500 employees and mid-size small businesses (5 to 19 workers) was dealing with lawsuits filed by those sickened by the virus or their families. Approximately two-thirds of respondents and 51%, respectively, indicated as much.

To close or not to close?
Business owners throughout the country were faced with a conundrum in the early days of the coronavirus pandemic: stay open and hope for the best or close prematurely to avoid any potential for infection. While some state officials made this choice for them, others were forced to improvise. In several parts of the nation that proved to be "hot zones," employees were stricken ill and quarantined. The dip in worker volume resulted in supply chain disruptions across many industries, the effects of which are still in place in certain sectors, such as manufacturing.

But the fact that workers were even sickened in the first place is proving problematic for a number of  employers, some accused of not providing their staff with appropriate personal protective equipment or failing to implement appropriate social distancing measures.

Must meet strict legal standard
However, proving liability is an uphill battle. For starters, several states have newly passed laws in place that provide immunity from coronavirus-related lawsuits to certain businesses. As CNBC reported, these include health care facilities and certain dining and entertainment businesses. Massachusetts, New Jersey, New York and Arizona are among those states with protections in place.

Other businesses are taking a more proactive approach by requiring customers to sign waivers before receiving goods or services, preventing them from pursuing legal recourse should they be infected.

Harold Kim, president of the U.S. Chamber of Institute for Legal Reform, told The Wall Street Journal he anticipates the courts being very busy.

"The amount of litigation on the horizon is enormous," Kim explained.

Issues such as these are one of many reasons why you may want to consider forming an LLC if you're considering starting a business in Arizona. While the process is fairly straightforward, there are some potential pitfalls that can make it more difficult than it needs to be if you got it alone. Hudspeth Law Firm can guide you every step of the way so all of your bases are covered. Contact us today. 

Categorised in: Business Law

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