Protection for Reopening Businesses

The North Carolina General Assembly passed two bills that will help our state’s economy recover from the devastating impact of COVID-19 and Governor Cooper’s shutdown. These bills would not only limit lawsuits that could be filed against organizations and businesses who reopen legally during the coronavirus pandemic but also adds protections for doing so in North Carolina. Both HB 118 (COVID-19 Liability Safe Harbor) and HB 806 (HOA/Condo Pool Opening Limited Immunity) passed both the House and Senate and await action by the governor.

COVID-19 presented policymakers with an unprecedented need to protect the public, as well as empower business to operate again. Frivolous lawsuits threatened business owners with real world consequences, making it difficult for many of them to reopen.

HB 118 addresses concerns by providing a logical extension to the limited COVID-19 immunity protections previously passed by the General Assembly as part of SB 704. A mere claim of someone saying they contracted COVID-19 at a business that had been closed during the first few months of the pandemic could put the company out of business. Under HB 118, businesses are required to provide reasonable notice of the action taken to reduce the transmission of COVID-19 in their places of business. This gives business owners the confidence and protections needed to relaunch economic activity with new protections and precautions for their employees and customers. It does not apply to worker compensation cases.

The bill simply allows liability for “gross negligence, wanton conduct, or intentional wrongdoing,” which creates a higher standard of liability to be shown against the business, protecting potential tortfeasors. Gross negligence is a heightened standard that requires a claim to be based on actions where there is an intentional violation or a business knowingly exposes customers or individuals to COVID-19 with disregard for safety. While expanding protections to cover all claims, aside from those that amount to the gross negligence or intentional wrongdoing standards, the window for such claims are lengthened to last until six months after the expiration of the Executive Order issued on March 10. 

While HB 118 focuses on providing a safe harbor against litigation for business, HB 806 provides limited liability and partial immunity from COVID-19-related claims that arise where privately owned community swimming pools reopen. Pools have already reopened under Phase 2 but may face challenges ahead. A return to normalcy, whether provided by directly offering businesses a safe harbor or by providing non-profit organizations immunity from litigation, will promote economic stability and routine lifestyles.

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