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Best Business Practices During the COVID-19 Pandemic

posted on May 22, 2020 by Willingham & Cote

by Scott Breen, Real Estate, Corporate & Business Law

As a result of the COVID-19 pandemic, our lives have significantly changed and the Governor has issued almost 100 executive orders since March 16, 2020. You may be wondering what you should be doing to protect yourself from claims by your employees and/or the public alleging they have been exposed to the Coronavirus while at your business.

Regardless of whether you are currently operating during this pandemic or are a closed nonessential business, you should review what type of business you are and reform your business to protect yourself individually. If you are a sole proprietorship (d/b/a) or something less than an incorporated business or limited liability company, now may be the time to modify your business structure. Any business less than an incorporated business and/or limited liability company subjects its owners to personal liability for any claims of negligence or other misconduct.

Even if you have commercial insurance to cover your business, it is unclear whether commercial policies will cover claims arising from COVID-19. Commercial policies are “contract based” and, therefore, the contract will dictate the coverage available. Your policy may specifically exclude coverage for claims arising from diseases like COVID-19. If the commercial policy does not provide coverage or if the claims for damages exceed your coverage limits, your business may be responsible for the attorney fees and damages. Worse yet, if you are not properly incorporated or organized as a limited liability company, you may be personally responsible.

You may have noticed that there are lawsuits now being filed against businesses by employees and visitors claiming they were not adequately protected from exposure to COVID-19. What can you do to protect your business from similar claims? These types of claims are often evaluated based on what a reasonable prudent person would have done in your situation. At minimum, your policies and procedures for your businesses should mirror the mandates ordered by the Governor to open your business safely. After all, you have been ordered to do so by the Governor so your failure to comply will help to support any contention that you were negligent in the operation of your business.
The best policies and procedures may even go beyond the Governor’s mandates. Each rule should be made in an effort to ensure minimal exposure to COVID-19 and specifically tailored to your business. Consulting with an expert may be a good idea to help minimize the spread of COVID-19. After all, if you establish reasonable rules to protect your staff and visitors, this will only help in a claim against you.

All policies and procedures should be written in a memo to all employees and you should make sure your employees sign a written acknowledgement that they have received it. It is also imperative that you discuss the policies and procedures with your employees to ensure they fully understand your expectations. Those written policies and procedures should be kept where your employees can have easy access to review throughout their day.
Once you provide the policies and procedures to your employees, now you must enforce them. A jury or trier of fact will not appreciate your failure to enforce a rule you thought was necessary to protect your staff and the public at large and will likely hold you responsible. You need to continue to monitor and adjust your businesses practices based on the latest medical data and other information available to you. Just be sure to amend the written policies and procedures and then distributed them to your employees.

No one is perfect and the jury or trier of fact will not hold you to a standard of perfection. The jury or trier of fact will want to know that you made efforts to comply with the law as well as to establish and enforce your own policies and procedures. Your goal is to minimize the spread of the virus and protect the business you have worked so hard to maintain. If you have any questions about the best practices for your business, you should consult with an attorney or another expert to minimize the risk of the spread of COVID-19.

Scott Breen is an attorney and shareholder at Willingham & Cote’, P.C. in East Lansing, Michigan. Mr. Breen also has a Master of Laws degree (LL.M.) in taxation. He specializes in the areas of business and real estate transactions as wells as hospitality and alcohol beverage law. Mr. Breen may be reached at 517-324-1021 or sbreen@willinghamcote.com.

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