Safe bet that maybe only a handful – if that many – of candidates for the Colorado General Assembly even brought the issue up on the campaign trail.

It’s almost a certainty that candidates for the legislature in neighboring Utah, Wyoming and Nevada didn’t bring the issue up. They didn’t have to, because their legislatures did something about liability protection for small-business owners from COVID-19 lawsuits when they had the chance. Not Colorado. Not a single bill cropped up during the last session.

It not only should have, it now must when a new session of the Colorado General Assembly starts in January.

Tony Gagliardi, state director for the National Federation of Independent Business

Attorneys Michael Shalhoub and Steven S. Vahidi, in an article in Claims Journal, explain why.

“Just the mere threat of litigation may cause many businesses to remain closed or delay reopening because few businesses can afford the costs of defending a lawsuit following weeks of business disruption amid the sudden economic recession. Plaintiffs’ lawyers across the country are already recruiting individuals to sue businesses by pouring millions of dollars into advertising.”

Right now, only 13 states have some form of liability protection holding harmless small-business owners, civic and health institutions from being slapped with a coronavirus lawsuit by plaintiffs who could have contracted it anywhere.

Many state legislators across the country, including some of Colorado’s own, probably banked on Congress coming up with a federal law that would handle the matter. That certainly was the wish of 22 states’ attorneys general who co-signed a letter to Congress in support of S. 4317, the Safe to Work Act.

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“Unfortunately, the COVID-19 pandemic has the potential to create a surge in frivolous civil litigation targeting well-intentioned businesses, educational institutions and non-profit organizations that have implemented and utilized applicable pandemic mitigation measures,” the letter said.

“In fact, lawsuits are already being filed. We know that in order for our economy to fully recover, customers and employees have to have the confidence to return to the marketplace, students need to be able to safely return to school, and at the same time, entities of all types that follow applicable guidelines need to be protected from devastating civil liability litigation concerning baseless COVID-related claims. Therefore, we are encouraged by this common-sense framework to provide federal liability protections for much-needed goods and services while still ensuring victims are able to seek legal redress and compensation where appropriate.

“As you are probably aware, states across the country have taken steps to address the need for timely, targeted and temporary civil liability protections in light of the pandemic, but the need for a uniform national baseline of liability protection still exists.”

Five months ago, NFIB, the nation’s largest small-business association, provided Congress such a “uniform national baseline” with liability protection principles to work with. The four principles were:

  • 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.
  • 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.
  • Permitted lawsuits should be limited to persons who experience a serious physical injury due to COVID-19 resulting in hospitalization.
  • Fines should be imposed on unscrupulous trial attorneys bringing frivolous COVID-19-related lawsuits. 

As of this writing, S. 4317 remains mired in the Senate. Similar legislation contained in another bill as a section received 52 votes, including Sen. Cory Gardner’s, but came up short of the 60 votes necessary to proceed.

Unless liability protection is thrown into some last-minute bigger deal, the issue runs the risk of getting swept under the rug, which means it will be up to the next Colorado General Assembly to do something about it.

Together with NFIB’s principles and examples from three nearby states, our legislators have something to work with while they consider the manifest consequences of doing nothing.

Tony Gagliardi is Colorado state director for the National Federation of Independent Business.

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