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Protecting Your Business in a Post-Covid World

June 17, 2021

 

The Coronavirus disease (Covid-19) exposed serious and previously unconsidered risks in the business world. Businesses that relied upon getting consumers into their doors suffered devastating financial losses. Establishments such as restaurants, car dealerships and the hospitality industry suddenly found themselves unable to service their clients in their traditional manner. In seeking to recover their unprecedented losses, businesses sought coverage under the business interruption provisions of their insurance policies, only to be denied coverage. These denials have thus far been generally upheld by the courts as proper. Other businesses sought to cancel contracts under the doctrines of impossibility, illegality, and contractual force majeure clauses. The burden to do so is high, and those seeking cancelation were often denied. These lingering issues have rightfully raised the question; how can businesses protect themselves from the unimaginable? While litigation continues to determine insurer responsibility on virus-related closure claims, there are steps businesses can take to minimize risk moving forward.

It is vital to understand what the business’s insurance policy covers. Speaking to the insurance carrier and receiving clarification on the parameters of the policy can prevent future losses or costly litigation to determine the scope of coverage. Any clarifications provided by te carrier should be requested in writing.

Further, creating contracts that adequately explain how unexpected events are handled and each parties’ responsibilities are can prevent future disputes. Many commercial properties found themselves in positions whereby lease payments, guaranteed orders, service contracts, and event services became contentious issues. It is important for a contract to have provisions which assign who will bear the risks in these circumstances and the impact that unexpected occurrences will have on each parties’ obligations.

The pandemic also brought attention to new issues, such as how businesses should deal with government assistance. The paycheck protection program, which issues “PPP Loans,” forced businesses to determine borrowing strategies, consider resource management, assess risk tolerances, and evaluate employment decisions. With the most trying times associated with Covid-19 in the rearview mirror, it is important that businesses assess these issues before the possibility that they become an issue again in the future.

Having the ability to quickly pivot to a remote working environment may prove beneficial both in the event of a subsequent health emergency or during other unexpected circumstances such as poor weather, employee health emergencies, or unexpected office closures. Businesses should examine policies for leave, telework, and emergency communication to ensure they can operate as close to full capacity as possible. Having a contingency or crisis management plan can aid in limiting the detriment of unexpected emergencies.

Businesses must also take immediate steps to limit their liability as the country continues to reopen and the public begins to visit the business premises. There is a risk of negligence-based claims relating to exposure, both externally from patrons as well as internally with employees and contractors. Businesses should examine their responsibilities and duties to their own employees, contractors, and customers to ensure the premise is safe and avoid premises liability issues. These considerations may include continued disinfecting precautions, requiring employees to use personal protective equipment, and allowing for reasonable accommodations to employees.

To create plans to address the unexpected now and in the future, please contact Brett A. Berman, Esq. at Carluccio, Leone, Dimon Doyle and Sacks, LLC.

The information provided above is not, and is not intended to, constitute legal advice; instead, all information, content, and materials available are for general informational purposes only. The above information constitutes general information and may not reflect current legal developments, caselaw, or settlements. The information does not, and is not intended to, constitute legal advice or other professional advice, or as a source of advertising or solicitation. You may not rely on the information as such. Accessing or using the above information does not create an attorney-client relationship between you and the Carluccio, Leone, Dimon, Doyle and Sacks, L.L.C, and it is not intended to do so.

 

 

 

 

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