As travelers return to hotel destinations around the world, the threats of COVID-19 pollution continue to expose the hospitality industry to various legal risks. With more than 2,000 COVID-related cases currently on file in the United States, the risk remains, particularly in the areas of exposure to neglect, work and employment. This article will examine some of the increased legal risks to the hotel industry and some suggestions for mitigating or reducing exposure to lawsuits related to COVID-19.
After more than a year of staying home in many jurisdictions, travelers are desperate to return to vacations, accommodations, and an escape from their daily routines.
Short-term rentals like Airbnb and VRBO saw astronomical increases in late 2020 and early 2021, but customers are now returning to the ease and convenience offered by their favorite hotel chains. Hotel stock prices are skyrocketing, real estate is partially reopening, and the hospitality sector is hiring again.
But while rooms are being booked, some must be on the rise due to demand, and hospitality management and executives must tire of new or increased responsibility in the wake of COVID-19. Understanding these legal exposures and managing these new risks is critical to the success of the recovering hotel industry. While property owners are not insured for their guests, hotels may have an increased duty to their patrons regarding the known risks of COVID-19.
Most states follow the standard of general negligence: a hotel owner or landowner must (i) keep property in a reasonably safe condition and protect guests from risks of which the hotel is or should have known; and (ii) warn the guest of hidden dangers which the hotel must or must know and not known to the guest.
What is reasonable?
What is reasonable regarding personal injury claims related to COVID-19 will be evaluated taking into account the criteria at the time. For example, what made sense in February 2020, before most of the world understood the danger of COVID-19 or the science of transportation, would be different from the summer of 2020, and the spring of 2021, when news of a Delta version hit. .
When is a warning required?
Surely everyone has heard about the virus and the ongoing pandemic. An argument can be made that guests should know the risks of COVID-19 or that they can detect the risk of COVID-19 by exercising reasonable care. But the investigation does not stop there. What if the hotel knew of exposure to COVID-19 and failed to make the exposure known to guests who had potential contact?
Best practices, mandated in some states, are clear, visible warnings at points of entry and community gathering places of the presence of the virus and reasonable precautions regarding sanitation, hygiene and social distancing. Signs must not display a false sense of comfort or security, and must adequately inform guests of the risks.
Will reasonable care and warnings protect the hotel industry from lawsuit? of course no. Waves of litigation related to COVID-19 negligence claims, employment cases and insurance policies are beginning to make headway. In fact, according to Penn Law’s COVID Coverage Litigation Tracker as of September 27, 2021, at least 2,053 COVID-19-related lawsuits have been filed in the United States.
As of the date of this post, the majority of these issues were related to business or income interruption, but hundreds related to pollution, civil authority, employment, employment, and bodily injury have been pursued and are still being filed. Keep in mind that 207 of these cases are class actions, which means they have multiple claimants, so the number of actual legal claims related to COVID-19 outweighs the actual number of cases filed.
Some of the legal risks hoteliers face aren’t new, but the pandemic has amplified them. COVID-19 has created a niche market for neglected exposure claims. To defend such a claim, as discussed above, the hotel would have to exercise reasonable care at the time the accident (exposure) occurred. While most health and safety standards remain fairly constant over time, we have introduced COVID-19 into a world where we have followed the daily briefings from Dr. Anthony Fauci.
Consider for example the CDC’s sanitation protocols, mask policies, recommendations regarding the size of gatherings, or food preparation standards: failure to comply with commercial health and safety reasonableness is a recipe for litigation. Prudent management will adopt the changing COVID-19 guidelines provided by government agencies, establish compliant policies and procedures, and inform staff and guests regularly.
This means having dedicated personnel monitoring changes in health and safety standards, establishing evolving policies regarding the hotel’s duty of care, and constant communication of the changing standards of staff and guests. Sanitation and disinfection performance should be well documented. Records must be compiled and reviewed by management regularly to ensure that health and safety standards are being performed at the hotel. Hoteliers with the means should consider partnering with healthcare providers and/or consultants to establish reasonable and reliable safety policies.
While compliance does not guarantee that claims or litigation will not arise, some states, such as hospitality-saturated Florida, have passed legislation limiting or providing immunity from liability for COVID-19-related claims if compliance with government standards has been demonstrated. Under the new Florida Code FS 768.38, if a court determines that the business entity made a good faith effort to comply substantially with official or controlling health standards or guidelines issued by the government at the time the action occurred, the business entity is immune from civil liability. North Carolina, Oklahoma, Utah, Wyoming, Alabama, Arkansas, Georgia, and others have passed similar legislation. Such restriction or immunity shall prompt hotel management to strictly monitor and implement CDC, state, and local guidelines.
Another source of litigation amplified by COVID-19 is employee claims. Employers must maintain safe work environments for their employees in accordance with applicable laws and regulations. Increased care and limited exposure to high-risk employees should be evaluated. Awareness and policy development to protect the privacy of people at higher risk and the confidentiality of employees’ vaccine status is critical, particularly because many personal injury-based lawsuits related to COVID-19 have been brought by employees.
Employers should carefully review local and state policies regarding mask authorizations, vaccinations, vaccine passports, and mandatory testing policies before changing hotel policies. Policies regarding the use, provision, or limitations of personal protective equipment (PPE) should be investigated. Individual rights to privacy and autonomy must be weighed against public health and well-being, likely through legal guidance. Eligible employers should refer to the Family Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), and Section VII of the Civil Rights Act as they relate to employees affected by COVID-19.
Protocols should be developed and implemented when a hotel becomes aware that a guest or employee has contracted or had direct contact with a person with COVID-19. These policies should include standards for reporting cases of COVID-19 and reporting potential exposure, while maintaining the confidentiality of PHI as required by the ADA and HIPAA. This also requires dedicated records related to the investigation of infection or potential contact, as well as documentation of prompt and reasonable remedial measures to ensure proper sterilization of property when needed. Government reporting guidelines should be followed carefully.
Hotel management and executives should consult their insurance policies. Many general liability policies and business interruption companies have refused coverage under a force majeure clause or any other purported exception. Risk Management should be aware of its current coverage and seek to clarify claims related to COVID-19, obtaining additional or excess coverage where applicable. Many insurance companies have or plan to adopt virus exclusion. Critical illness coverage is a supplemental habit for which bargaining must be made. Hotel stakeholders should also consider group health care plans, workers compensation policies, and long-term disability programs to see how they might be involved or excluded if a claim is related to COVID-19.
In short, the hospitality industry has suffered and continues to suffer the consequences of the pandemic. Legal trends indicate that litigation will continue and that the long trajectory of cases related to COVID-19 will continue to grow. In order to meet this ongoing challenge, hotel owners and executives must carefully screen their exposure and develop and implement reasonable policies to mitigate additional legal exposure.
This article was originally published by HotelExecutive in the December 2021 issue and is shared here with permission from the publication.